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Original poster

Six figure deposit, first time buyers, market about to crash - WWYD

86 replies

Dol4321 · 18/05/2022 20:20

We are a married couple with a 7month old baby. We rented in London for over 10 years, moving up north during the pandemic as our employers switched to working from home. We now rent a house up north near Manchester and love the area we are in.

Our only hope of ever getting on the property ladder was through saving up for the deposit whilst also paying the eye watering London rent. Neither of us have wealthy families so parents lending / inheritance was not an option and obviously the cost of living in London is crazy, hence why it has taken us a decade to get the deposit together.

Due to progression in our jobs and bonuses, we have managed to save just over £100k and between us our joint annual income is £140k.

I really appreciate just how fortunate we are to have that amount saved, and to earn what we do particularly coming from low income families and childhoods. I am also really proud of having saved what we have.

It means that we are now looking at buying a big family home with a garden, with a budget of 650k-700k. We want this to be a house we are in for 10/15 years.

We are looking at a 10% deposit of £65k-75k, with £25k for stamp duty.

The dilemma comes with the following situation.

There is a new build estate near us (Redrow built) that is really nice and extremely family friendly. Primary school being built, lots of shops and commodities. Annoyingly it is very close to to the footballer postcode (Cheshire) it is also extremely expensive especially at the minute.

OP posts:
Somanyquestions1984 · 18/05/2022 22:31

I was interested in Redrow but was shocked at the final release prices, which then went up by 40-50k in the space of 4 weeks after release and reservation of the first 4 plots. Since then they still have only sold 4 plots. I would tread carefully as very expensive, market has peaked and you risk overpaying unless bury desirable area.

BanjoKnickers · 18/05/2022 22:34

Dol4321 · 18/05/2022 20:20

We are a married couple with a 7month old baby. We rented in London for over 10 years, moving up north during the pandemic as our employers switched to working from home. We now rent a house up north near Manchester and love the area we are in.

Our only hope of ever getting on the property ladder was through saving up for the deposit whilst also paying the eye watering London rent. Neither of us have wealthy families so parents lending / inheritance was not an option and obviously the cost of living in London is crazy, hence why it has taken us a decade to get the deposit together.

Due to progression in our jobs and bonuses, we have managed to save just over £100k and between us our joint annual income is £140k.

I really appreciate just how fortunate we are to have that amount saved, and to earn what we do particularly coming from low income families and childhoods. I am also really proud of having saved what we have.

It means that we are now looking at buying a big family home with a garden, with a budget of 650k-700k. We want this to be a house we are in for 10/15 years.

We are looking at a 10% deposit of £65k-75k, with £25k for stamp duty.

The dilemma comes with the following situation.

There is a new build estate near us (Redrow built) that is really nice and extremely family friendly. Primary school being built, lots of shops and commodities. Annoyingly it is very close to to the footballer postcode (Cheshire) it is also extremely expensive especially at the minute.

If you think the market is about to crash then isn't the obvious thing to rent until it has done?

Aquamarine1029 · 18/05/2022 22:36

I think I would wait if I were you. For the next year, save one of your salaries entirely, and save any amount that you can from the other. While your baby is still so little, you don't need extra room. I'd play the long game and save, save, save.

Duvetdweller · 18/05/2022 22:41

I don’t understand the dilemma? Do you mean you don’t want to buy in case the prices reduce? Or because of the location?

Fcuk38 · 18/05/2022 22:48

And the dilemma is???? Surely is prices drop and your planning to be there 10-15 years it doesn’t necessarily matter?

CorsicaDreaming · 18/05/2022 23:01

Well it does matter because potentially they end up with a mortgage £100k bigger than it needed to be if they'd waited for 6 months.

I can see your dilemma OP.....

All I know is we had a similar dilemma 20 years ago. We did end up buying and it was the right decision as our house rose from £189k back then to £650k... but I agree it's always a really nerve wracking decision. And house prices do seem crazy at the moment.

We bought 18 months ago and they've gone up by so much yet again since then, and they felt bonkers before. You feel it's got to crash at some point, but it just doesn't seem to - it keeps on upwards with some blips now and again.

If you're buying for the long term and can afford the mortgage reasonably comfortably so won't be forced to move, I'd still buy now myself - but I can't say that it doesn't feel like Russian roulette...

But be careful with new builds and builders contracts on them, they can be tricky and mess you about as a friend recently found out. Finally sorted and he is in but took 6 months more than expected

Foxglovers · 18/05/2022 23:37

I think new build estates with firms such as redrow tend to be for people who don’t have much cash behind them as they offer schemes where they gift cash deposits as deals in the house sales. I think as you actually have some cash you should buy and older property which has more potential to increase in value and many people are not able to do this as they don’t have that cash behind them. Kind of why new builds are popular. Also new build estates tend to look very tired (putting it nicely) after a few years…I saw invest your cash in an older property!

doorfram · 18/05/2022 23:59

Could you buy a cheaper house so your deposit is higher or wait a bit. I think in the current climate you want more than 10% deposit. Or save up some more?

user375242 · 19/05/2022 00:12

I wouldn't go for a new build like that. They are way overpriced and always depreciate. You could get a much nicer period house for that budget with an established garden, and established schools. I'm not sure about the market crashing, new buyers have been worried about this for years and years, and until the housing deficit goes away, I don't see how there can be a crash.

Viviennemary · 19/05/2022 00:16

You are in quite a strong buying position. Don't go for a new build. Overpriced and will be the first to crash. Wait a bit as prices are being predicted to fall.

Overthewine · 19/05/2022 00:29

This reply has been withdrawn

This has been withdrawn by MNHQ at the poster's request.

DietCoke99 · 19/05/2022 00:43

There isn't going to be a crash. Occasionally there are blips but not much. We have a free market and no restrictions to overseas investors. And they want to put their money in the UK in bricks and mortar.
I would steer clear of new builds. Also if you are wanting to stay in your place for 10 years + , then you should look to be on the catchment of good secondary schools first, rather than primary schools.
Also, we'll done on saving so much- a lot of people would not have done

Keepitonthedownlow · 19/05/2022 00:46

Mortgage rates are predicted to rise... so it might be harder to borrow as much next year.

CharSiu · 19/05/2022 01:23

I would never buy a house in a neighbourhood that isn’t established, regardless of the cost of the housing.

OneCup · 19/05/2022 02:31

No idea about crashes but if you are concerned about losing money, don't buy a new build.

Beetlewings · 19/05/2022 06:19

Why do you need to spend so much on a house?

Morechocmorechoc · 19/05/2022 06:25

If you wait interest rates will probably go up and.your mortgage will be worse though. Maybe buy in a little cheaper area if they are over priced. Or if they aren't selling simply offer them less and take a punt.

I wouldn't overpay somewhere esp a new build. Have a look around there are deals to be had. If you were sensible you would buy somewhere underpriced that needed renovating.

StageRage · 19/05/2022 06:25

I suspect property prices will plateau rather than crash.

So the risk is carry on paying someone else’s mortgage while you rent.

Even if prices drop, will the net effect be worse than the money spent on rent?

I wouldn’t buy a new build anyway.

Twiglets1 · 19/05/2022 06:36

New builds don’t tend to appreciate in value very fast at all because as soon as you move in the property loses its unique selling point- it is no longer a pristine new build. So it’s not the best choice for making money on property

gracedentssketty · 19/05/2022 06:57

It’s a tricky one. Interest rates appear to be going only 1 way in the short term so if you delay, you might end up stung by higher rates. If you don’t buy now and the market continues to rise you are then stung twice. However if you buy and it drops you’ve paid more than you need to. But whilst you rent it is dead money

theres not really an easy answer with property. Some are winners and some are losers but if it’s going to be your home rather than an investment it may be better to be settled sooner rather than later. If it’s a 10-15 year gig it should generally all come out in the wash

ProclivityForPyrotechnics · 19/05/2022 06:58

I wouldn't go for a new build personally

gunnersgold · 19/05/2022 07:00

Not true about new builds , we paid 425k 7 years ago . Now worth £725k .
It's about getting the right plot and area/ developer!

gunnersgold · 19/05/2022 07:01

I would buy a doer upper though on a big plot , then you can extend and make it your own in tho long game .

Hollyhead · 19/05/2022 07:02

Can you afford to still save whilst renting? If so I would get cash behind you, there is no way I’d take on a 500k mortgage on ‘only’ a 140k income right now unless I was able to fix the rate for 10 years, but even then it’s huge and could become a real burden if interest rates rose.

Changechangychange · 19/05/2022 07:04

I wouldn’t move somewhere where the primary “is being built” - what if it is shit?

I also wouldn’t move to a new build because I don’t like them (rooms are usually tiny compared to older similar priced houses), but I would honestly have serious qualms about moving in somewhere with literally no amenities in the hopes that Redrow would build them.

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