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Is this a ridiculous time to buy a house?

(28 Posts)
LittleMyDancing Thu 18-Sep-08 10:06:22

So DP and I are renting after selling our house in London last summer. I have just got (I hope, waiting for contracts etc) a new, reasonably secure (govt agency) job, but we're expecting DC2 in April 09 so I will have 9 months minimum on Maternity Allowance coming up.

DP runs his own IT consultancy business, which obviously is risky in the current climate.

There's a house round the corner from where we live that has just come on the market. It's really cheap for the area, much bigger than we could normally afford, but needs a lot of doing up (mostly cosmetic, some rewiring, new boiler etc).

We could get a mortgage for the amount required plus some extra for doing up costs, I've checked. But is this a ridiculous time to consider it? Is the property market going to fall massively even more? Would we be daft to get ourselves into this, given the current climate? The repayments would be less than our current rent, but I'm nervous about the fact that we would have almost no savings left if we did this.

Going to see it on Friday, not sure if it's a totally stupid idea or not. Help, MN Jury!

expatinscotland Thu 18-Sep-08 10:08:03

as long as you've got an interest rate you can live with, and you're in it for the long haul, i'd go for it.

RubyRioja Thu 18-Sep-08 10:08:14

I don't think mad. Obv you have to work out wht it would really, not optimistically cost you, and what would happen if dhs income dried up. I would want a war chest.

Why not proceed with caution?

LittleMyDancing Thu 18-Sep-08 10:17:06

Yes - I've been thinking about what happens if DP's business goes down the swanee. Assuming I'm still working, we could just (and I'm talking just) squeak by until he got a job, if he became a stay at home dad and we took DC2 out of nursery.

We could keep some of the savings back as well and ring fence them for emergencies, if we can get the house for a bit below the asking price.

I think we need to bump up our life insurance and loss of income insurance though.

It's a scary prospect, but where we live houses like this just don't come up very often, they've almost all been done up already.

LittleMyDancing Thu 18-Sep-08 10:17:47

Also the mortgages I've been looking at are fixed rate for three years and capped after that, so should help us weather the storm of the economy for a while.

RubyRioja Thu 18-Sep-08 10:25:54

looks promising

LittleMyDancing Thu 18-Sep-08 11:49:05

Hmmm, done some more sums. We should be able to do it and still have some savings ringfenced. Obviously I've made some huge assumptions about costs which I'll need to investigate, but it ain't out of the question.

Scary.

Going to see it tomorrow, fingers crossed!

KatieDD Thu 18-Sep-08 22:34:11

Take the asking price and deduct at least 25% that'll give you a cushion so you aren't in negative equity as you wak through the door.
Ask yourself have you got three months mortgage payments in savings ?
Nevermind all this in it for the long term, you make money when you buy something not sell it.
You are in a fantastic position don't blow it by falling into what they call the bull run.

noddyholder Thu 18-Sep-08 22:35:26

katie you talk sense What would you offer for a house on for 289 was 310 in march.Empty since march I have cash Thanks xx

LyraSilvertongue Thu 18-Sep-08 22:37:23

We've just bought a doer-upper. Exchanged last week. I'd say go for it if it's the house you want.

LyraSilvertongue Thu 18-Sep-08 22:42:11

Ours sounds much like the one you want - needs refurbishing, mainly cosmetic, in a great street that we wouldn't have been able to afford this time last year, and pretty much the only one in the street not yet done up.

KatieDD Thu 18-Sep-08 22:43:13

£216 absolute tops.
If they don't accept that offer move on, find somebody who will.
You cannot get emotionally attached to a house, honestly it is the reason all this crap is happening we've had location location location ramned down our throats with dickheads parading around gushing "we simply had to have it, we fell in love" well I wonder if they are still "in love" with their mortgages now, it's just bricks and mortor and a mill stone around your neck until it's paid off.
Back in the sensible days houses were bought because they were 3 x peoples salarly not because of the Farrow and Ball paint job which cost £30 but adds £10 grand apparently hmm

AnybodyHomeMcFly Thu 18-Sep-08 22:53:49

I would go for it but hold out on the price. We are buying and selling at the mo and believe me they will be soooo pleased to have a buyer that you will get the price you want.

It's not at all mad if it's the house you want in the place you want and you have income protection / can afford the payments if your husband's job goes.

Good luck with it

giddykipper Thu 18-Sep-08 22:55:30

Perfect time - buy mine, it's lovely grin

1dilemma Thu 18-Sep-08 23:00:04

katie I like your style grin
noddy have been wondering how you are getting on?
OP if it is your 'dream house' or at least a long term option sounds like a possibility, for me it would also depend on where it was/how much I had made and what the actual cost was (not expecting you to answer those BTW!!)
plus how little I could get it for and whether it had something people want that other houses in the area dont eg bigger

I would go in at 25-30% less

The only other thing for me would be how secure do you really think your job is? will have to be big public sector cutbacks if things pan out the way they are looking

LittleMyDancing Fri 19-Sep-08 18:20:42

So I went to see the house today - it's a big project! Lots of cosmetic work needed (huge orange flowery wallpaper everywhere, yum), all carpets rubbish, a damp spot in one room, probably from a leak in the roof. Probably needs rewiring.

Also need to knock through from the kitchen to the back reception room (not sure if it's partition wall or load bearing) and completely rip out the bathroom and start again.

But it's a really good size, it's double glazed already (on very busy road) and has off street parking which is rare where we live.

DP going to see it tomorrow.

Sad though, the guy who lived there has gone into a home so there's a Stannah stairlift in there, rails everywhere, and some walking frames and other medical equipment in the back reception room. Poor man, I hope he's not too sad about leaving his home. sad

MrsMattie Fri 19-Sep-08 18:27:40

You won't want to hear this, but I think you should proceed with caution.

Like you, we spotted a great house ina great area - much bigger than we had anticipated being able to afford. it needed a lot of work (almost exactly the same as what you've described). this was in summer 2007. Wr bought it and we've just finished doing it up (has taken a year). It has cost us infinitely more than we budgeted for, and that is with the best will in the world to stick to our budget.

No way would I embark on such a big project at such an economically unstable time. It would leave you in a very vulnerable position should things go tits up any time soon.

LittleMyDancing Fri 19-Sep-08 18:44:26

Thanks MrsMattie, it's good to hear all views, even if they're not positive! I have to admit after seeing it I did have a feeling of 'hmmmm, maybe not the time to do this' and if the property market dips much more, we could buy one like it that didn't need all that work, and that would be kind of annoying!

I'm feeling nervous about spending all our savings when I've got a feelings things are still going to get worse with the economy sad

We'll see what DP says.

noddyholder Fri 19-Sep-08 18:53:52

I am in the middle of buying something like that and am going ahead as I got a mega bargain and love a project but I agree it always costs more and takes longer than you plan

KatieDD Fri 19-Sep-08 18:55:04

I actually think you will do quite well out of this in terms of trades people scrambling around for work, so their rates will be less, there's been permanent sales on in homebase, moben etc this year.
If you can afford the repayments, take redundancy protection - although check when it pays out because as of April 09 the government will pay your mortgage up to £175k after 3 months and most importantly the price is right.
If the old fellow is going into a nursing home then really what do the family care what it sells for, they won't be seeing any of it.

LittleMyDancing Fri 19-Sep-08 19:06:24

Dp just got home and we had a chat. thinking about it, it's bonkers. Not so much the financials, but

- I'm about to start a new job, which will be at least four days a week if not full time
- DP works really hard running his business, so neither of us will have any time to deal with builders/tradesmen
- I'm 13 wks pg so will also be tired and hormonal all the way through, as well as moving house either just before or just after the baby comes
- it's bound to cost more than we think it will, and then bang goes our safety net of cash

We've decided to leave it.

Also, I liked the house, but I didn't LOVE it. The bathroom is too small.

<gavel>

MrsMattie Fri 19-Sep-08 19:07:31

We planned to spend £35k (based on getting detailed quotes and working everything out to the last detail in a huge spreadsheet planner), and for it to take 6 mths.

It took a year and has cost more than £50k for the work alone - and that's not including 3 months worth of paying the mortgage and rent on a flat when the dust and noise and utter chaos got too much for us to live there shock

I don't regret it at all. I can totally see why you are excited and want to do this. I just don't think we would have had the bottle in this climate (DH is also self employed and our mortgage isn't small!).

MrsMattie Fri 19-Sep-08 19:09:39

Cross posts!

PussinJimmyChoos Fri 19-Sep-08 19:12:26

Little - was just about to ask if you wanted the name of our builder - you can safely leave him in the house to get on with things while you work and he's brilliant to boot and then I see you have decided against it!

LittleMyDancing Fri 19-Sep-08 19:12:28

yes, even leaving out the financials it's not the time for me to be contemplating big stressful projects. can just see me weeping hormonally at builders!

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