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Original poster

FTB - anxious about market crash

42 replies

ChimpsEatChomps · 30/07/2018 12:31

This may be my anxiety talking but I’d really appreciate your thoughts on things please.

I’m a FTB and have a decent deposit to put into a house I’ve found in a village in Cheshire. My dad found the house, he’s a retired builder and found one that needs some work doing to it but not too much. Just putting in a garden instead of a yard, damp proofing the cellar and turning it into an office and redecorating throughout.

Once the work has been done, it should make around £30000 (based on houses that have sold recently with those changes already made). This would obviously then greatly improve my budget for the next buy.

Ok so here is where my questions come in. I was very excited about this but then my ex DH who works in finance in the City has told me that now is the worst time to buy and I’m likely going to lose my deposit and not be able to sell when I need to. For context, I’ll probably need to move again in 2-3 years which is why my dad and I focused on buying a project.

He said we’re due a crash and this teamed with Brexit means it’s the ideal time for it to happen. He recommends renting instead. The trouble with that is, rent in that village is double the cost of mortgage repayments and with much smaller properties available. It’s also the fact that the money i’d Spend on rent could be coming off my mortgage and I’ll never get it back.

Dad says ex DH is an idiot. Ex DH says dad doesn’t understand the market. I’m as anxious as they come and don’t know what to do for the best.

What do you think? Is dad right or is ex DH?

OP posts:
niketrainersarecomfy · 30/07/2018 12:37

Im also nervous. But may i ask why you are focused on making money and moving on? You are buying in the same market so if house prices crash it doesnt really matter

LlamaPyjamas · 30/07/2018 12:39

A significant fall in house prices would be disastrous for the economy as a whole. Negative equity and repossessions would affect millions of people. Banks would stop lending. People would stop spending, which would have a knock on effect on the entire economy. The government will do everything within their power to prop up prices as they have done for the last 10-15 years.

Want2bSupermum · 30/07/2018 12:41

Will you need to move if you buy this home? If not don't worry and buy the home.

Original poster
ChimpsEatChomps · 30/07/2018 12:43

Oh no, are you looking to buy too?

My job comes with 3 x 2-3 year placements, each in different parts of the UK. I’ll have to move in 2-3 years regardless and it’s likely going to be in a city so I need to have as much of a budget as possible for the next purchase. That will be my last one though.

I’m really tired of renting and have done it for far too long now so would ideally like to buy. I also love this house and would really enjoy improving it. Dad and I have always enjoyed doing things like painting and decorating together so I like the thought of us spending our weekends together doing it up.

The fear of us doing all of that and then not being able to sell it putting me off though.

OP posts:
cloudtree · 30/07/2018 12:45

Theres another thread in active threads about predicted interest rate rises this week which would potentially affect the market. Have you thought about this?

HeddaGarbled · 30/07/2018 12:47

The truth is that no one knows. Even the experts don’t agree. Your dad and your ex are both guessing (as are the experts, though their guesses are slightly more informed).

kenandbarbie · 30/07/2018 12:47

I would agree with your dh. Now is not the time to flip a house. It's fine to buy now if you can live there long term and not be bothered about short term fluctuations. Can you get something you could live in for longer? (Ps I work for a big property advisor)

HerRoyalNotness · 30/07/2018 12:47

I’d go ahead. We can’t predict the future and from your last post it sounds ike it would be worth it anyway tonhave that time with your dad.

If you can’t sell when the time comes, rent it out, and rent at your next location if you have to. As long as you’re not in negative equity in a crash, you still have an asset -
The house!

tentative3 · 30/07/2018 12:50

How much is your deposit? Does it equate to 2-3 years of rent?

The timescale does make it a bit trickier but if you're planning to add value that gives you an equity cushion.

niketrainersarecomfy · 30/07/2018 12:53

Yes im in the final stages, ftb so terrified! Although i will be staying put for 5years and my mortgage has a 5 yr fixed term. I think buy. Renting is so insecure, you can rent out your property if you move, or you may lose your chance?

Original poster
ChimpsEatChomps · 30/07/2018 13:06

cloud I really haven’t thought about interest rates but will have a look at the thread, thank you.

ken unfortunately I will definitely have to move in 2-3 years but the next move will be the last time I’ll have to so can stay if I like it. As it’s likely going to be city-based and nowhere near the north west, I’ll need to improve my deposit.

I suppose I could always do as Notness suggests and rent it out then rent in the city I move to though. It would be amazing to get that time with my dad, he is very excited about it and has viewed the house so many times he practically lives there now Grin

tentative my mortgage will be £110k, deposit is £30k and then I’ll have £15k for renovations.

OP posts:
kenandbarbie · 30/07/2018 13:08

There are no guarantees that you would be able to rent out a property if the whole economy goes tits up. Deposits were easily wiped out in previous recessions. It depends what % prices decrease by. If I was a ftb at the moment I'd be looking at ten years to be safe.

Original poster
ChimpsEatChomps · 30/07/2018 13:10

Good luck, nike, I hope everything goes smoothly for you. It is such a scary process but like you say, renting has its downsides too. I’ve been kicked out of rental homes twice because they wanted to sell and I’ve also had my rent raised regularly.

My guinea pig had to go live with my dad on my last move because the landlord wouldn’t allow him to stay so I’d be very happy to get Mr Popcorn back Smile (that’s the guinea pig, not my dad).

OP posts:
rainforesttreeswinging · 30/07/2018 13:17

If you have to move in two years max three I wouldn’t go ahead due to uncertainty. If you can stay for five years plus then it is likely to be fine. No need to take the risk. Selling might be tricky and what put yourself through the stress if you are not staying put.
Interest rates may increase in August, my guess is they won’t and they will decide against it for now.

niketrainersarecomfy · 30/07/2018 13:17

Ken do you mean 10 yrs fixed interest rates or 10 yrs before buying anywhere? That seems an awfully long time

Want2bSupermum · 30/07/2018 13:17

Which village in Cheshire. Some villages keep their value and others don't. The smaller homes in the nicer villages really don't go down in value. It's the big flashy homes and homes in less desirable villages which get crushed.

The other big question is what you expect the value to be once you come to sell and why take 2-3 years to renovate? If you don't plan to sell why not look to renovate in 3-6 months and sell in the spring?

kenandbarbie · 30/07/2018 13:22

Sorry no I would buy if I could keep house for ten years.

Howhot · 30/07/2018 13:27

Can you buy and then rent it out and rent in your next city if it's a bad time to sell? I'd be nervous about buying if you must sell in 2-3 years

Original poster
ChimpsEatChomps · 30/07/2018 13:38

The village is Lymm. I’ll have to be in the area for 2-3 years and wouldn’t want to buy and then sell before the 3 years are up because it would be a pain to have to move 3 times in the space of 3 years. Obviously if it was clear that things were heading downhill very quickly then I would definitely sell up to save risking my deposit money but would I be able to tell that it was time to get out just before it crashed? Is that possible?

In theory I could keep it and rent it out then rent in the next location but my ex DH made it sound like I’d need to rent it out for at least 5 years before things improved enough for me to sell and get my deposit back.

OP posts:
niketrainersarecomfy · 30/07/2018 13:39

Thanks ken. Thats my idea, less if possible as need somewhere bigger in the long run

Grandmaswagsbag · 30/07/2018 13:44

I wouldn’t look to buy now with the view of making money short term, no way. We are soon to be FTB and even we are nervous buying a home we hope to be in up to 10 years.

DrWhy · 30/07/2018 13:47

Buying with the plan that you’ll rent it out and rent somewhere else could get expensive depending on how much you earn as you’ll be taxed on the rental income and they’ve started reducing the amount of mortgage interest you can offset against the income from the properly - I haven’t looked at it for ages but if I remember rightly by 2020 it will be gone completely. So it’s not as simple as income from one property will equate to what you are paying to rent another one.

hooliodancer · 30/07/2018 13:58

I have just bought, and I am worried too.

I don't intend selling it, and I am still concerned! I think there is a lot of panic around. Nothing else has sold in the area I bought in for the last 5 months!!!

I hate the thought that I should have offered lower.

Realistically, I don't think there will be huge rate rises. This would totally fuck the economy up. There would be so many repossessions it wouldn't balance out.

I know you have to move, but if the worst happens you could always rent it out. There are certain areas of the country that recover much quicker than others. Lymm may be one of those as it's posh Cheshire!

alc3254 · 30/07/2018 14:09

If you are adding value and going to enjoy time with your dad...would it matter that you made less of a profit in the process? It sounds like buying would be cheaper than renting even with the reed involved. Worst case...you have to rent it out...but maybe not. Prices may fall but you may buy low somewhere else and start a new project. It sounds like a sensible investment...so in 3 years make another sensible choice. I'd say buy.

alc3254 · 30/07/2018 14:09

*fees not reed