Anyone have experience buying property 07/08? Throwing a wobbly!

[jellywobble22]

Hi all

Made an offer on a property back in July, won against 3 other really strong offers so was estatic when I found out, property ticks a lot of boxes, and must have viewed over a dozen before finding 'the one', could see myself living there happily for 5+ years.

Process is still ongoing thanks to the lawyers being slower than athsmatic ants... as time goes on it seems the news each day gets worse and worse and I am having a few sleepless nights about buying at the peak and being in negative equity for 12+ months from completion :( .. not to mention that the mortage offer was agreed on the basis of 30% LTV so I'd be seeing best part of £150k life savings go is frankly frightening.

Has anyone had experiences buying in a downturn? Just wondering what to do - am I better staying put (my first home bought 6 years ago with negligble debt remaining thanks to overpaying) and waiting for a better priced house next year (admittedly not at the 3.4% interest I have agreed in the mortgage offer) or biting the bullet and moving....

Aside from the moral issue of pulling out of the purchase.
In my memory of 07/08 really good properties held their value. It was the less desirable properties that lost value, for example ex local authority, houses on busy roads, bad layouts. Good properties with kerb appeal in decent areas tended to always br desirable and held their value.

Yep. I bought my first flat in London in 2007. We exchanged contracts as Northern Rock was going under. Bit of a WTF moment.

For me, it all came good - but a five year plan became a ten year plan. I bought a good solid property in an up and coming area. Within six months of buying it we were in negative equity. It took years - at least seven - before it regained its value. And then prices went through the roof and we sold it for almost double what we paid for it in 2017.

So I would say - if it’s a “good” property with no obvious flaws which couldn’t be rectified and which would affect kerb appeal/ease of resale (eg hard on the A1/next to a water treatment plant) or which would be expensive/out of your control (eg cladding if a flat, or a leasehold flat with a lease that will need extending), in a good area, and it wouldn’t be a disaster if you stayed longer than planned - go for it. You may as well pay your own mortgage as rent.

I would not wait until next year, personally. I know people who’ve done that, expecting a drop in prices, and the market hasn’t crashed to the extent they expected and they’ve found themselves priced out.

Or unable to buy for other reasons. I bought with someone else and for slightly complicated reasons, we wouldn’t have been able to raise a mortgage six months later (even though we were more than capable of paying it - lending criteria tightened).

Markets sometimes do crash but more often than not, they blip - or freeze, with only those who really have to sell/buy going ahead.

Yes we bought in 2008 in the March and in the November my ex-husband got made redundant from a role that he’d been in for 10 years so I think we got 40 grand redundancy which is of course taxed.

The bottom line is if he’d not owned the property and been renting at that time we would’ve been entitled to a two bedroom property instead of the four that we owned. We’d have been very lucky to find a rental for under a grand a month versus the £650 mortgage. And of course we have had all the upheaval of trying to move with our multiples of children, only having one car whilst both of us tried to work and keep the children’s lives as normal as possible.

it’s all these little things that people forget when they spout on about house price crashes, stability, painting your girls bedroom purple and pink because it’s their favourite colour and not having to pack up 3 years worth of Polly pockets and littlest pet shop every 12 months to move house. Imagine the trauma of having to get rid of the cats.

As it happens this our house sold for £100 grand more 10 years later. But it was never about the money for me.

Bought first flat in 2007. Sold at a loss in 2009. Then made a lot when we sold that property another 2 years later. Enough to make up for what we’d lost on the first flat plus stamp duty x2 and agent fees. So it all worked out ok in the end.

If you’ve got 30% ltv and are planning to stay for 5+ yrs you’re unlikely to end up in negative equity. And you’re better off buying now with better interest rate than waiting I think. Anything you’d potentially save on property price would be made up for by worse interest rates.

We bought in 2007 at the peak. It's worked out fine for us - we're still living here and still love it.

I moved into my house the week before the market crashed and instantly went into negative equity as I was a first time buyer and had only put down a 5%deposit. It really didn't bother me as I had intended to stay in that house for a while. 12 years later we sold and bought the house I'm currently in, in 2020.
I have now put this house on the market as I'm going through a divorce and again if I go into negative equity it won't bother me to much as I'm planning on staying in the new house for a very long time. As long as you stay somewhere for a while negative equity doesn't really matter, it's only if you have to sell up when your in negative equity then it can become a problem.

We bought in the second quarter of 2008. We had a wobble and said we were going to pull out and the sellers dropped the price by quite a bit! We didn't say we were going to drop out with this aim but it did give us a bit of comfort so we went ahead at the lower price. We lived there for about six years and by the time we left the price had increased by a lot. We had a decent fixed rate on the mortgage which also helped.

Recollections may vary!

Very desirable property's values went down significantly too.

Bought in 2006 just before the peak. Held on until 2016 but it was still in negative equity and sold at a loss in 2016 lost my deposit and more. It wasn't a desirable area in hindsight. Lots of areas picked up but this one never did, even during the last few boom years. I cut my losses. I'm ready to buy again with a new deposit but waiting this time, probably for another year. I was very unlucky but I'm much more cautious now

It definitely depends on area. We offered on a house in October 2007 and completed Jan 2008. We were lucky that houses in our area never really dropped from our purchase price so although we’d technically been sitting at a loss in the first few years due to the big stamp duty land tax on purchase and market staying flat we stayed 8 years and sold at a 40% increase in the end.

I bought a property for 100k in 08 and sold for 350k in 2014. I think that property is currently worth 550. So you just need to choose well and ride out the storm.

We bought a flat in London in 2007. The crash happened as it was all going through. We sold it 8 years later for £100k more than we paid for it. No idea if we were ever in negative equity, we weren't planning to move on quickly, so never really looked into it. It seems on paper as though we made a huge profit. However the next property was in an area that had also gone up in price so it all evened out.

If it's a property you want and you can afford the mortgage I'd go for it.

Bought in 2008 a months or so before the bust and spent the best part of 8 years in negative equity then sold it for the same as we’d paid for it! It worked out ok as we had considered it a home rather than an investment and it was big enough. Wouldn’t have been as much fun if we’d have been desperate to move at any point.

If you can afford the payments and will stay 5+ years don’t worry too much.

It doesn’t matter if you are in negative equity for the year after, just make sure you buy somewhere you can stay for a longer period of time. We’re selling our flat now, and hope to get a bargain over the next year when we buy a house!

Bought a flat in 2008 in London (offered late 2007 under asking price). Stayed 4 years and it went up by 65k. Bought a house which has more than doubled in value in 10 years. If we had sold flat quicker we may have broken even on it (we did some work on it) but overall things worked out fine. Location and length of time are key I think.

Bought 2nd house in Jan 2007. Took a 3 year fix term (around 5%).

Never got into negative equity in 08/09 as we had a reasonable deposit when we bought and could afford mortgage and had no plans to move.

Still in same property now and it has more than doubled in value. We don't ever plan on moving.

Our house is a 4 double bedroom semi in a great school catchment and is therefore highly desirable.

It can definitely work out but I wouldn't be being a house right now if you don't intend on living in it long term.

Good luck

😂 I go back further than that OP!

First purchase in 1989, £42k, inside 18mths, valued at £28k! It was a very small flat and we rented it out till October 2000, when we sold for £45k.

We bought our first house in 2003 and then bought again in 2006. We'd doubled the value of our first house and so brought £50k equity into our next house. The value did drop during the crash and we lost maybe £30/40k off the value of the house but we'd bought a good house that lasted us years so it didn't really matter. We sold it last year for £70k more than we'd bought it.

My advice is to buy a house where you can afford the monthly payments no matter what and you can live in it for years and the value will eventually rise.

Bought our first house in 2007 for 125k sold it 5 years on for £120k so for us it was a costly mistake. However same house is now worth 189k so if you’re playing the long game and it’s a forever house, you’ll probably be okay.

We couldn’t have stayed - nit enough room, it was defo a ftb house

Just to echo everyone else our second “forever house” we put down 10% deposit and knew we were there come what may.
In the 12 years we’ve been here property has doubled in value and if the shit really hit the fan we could sell up and buy and something smaller cash so it was well worth holding our nerve for.

We bought in July 07 with a 100% mortgage and we went in negative equity (I think by about £25-30k) almost immediately. It was a house we were able to stay in long term though and when we moved after 10 years we had £100k equity.

I would say try not to buy something you are likely to have to sell within a set timescale (e.g 1 bed flat if you're planning on having kids in the next 5 years). If you're buying something that you can stay in long term and ride out any market fluctuations then the market should hopefully correct any dips over time. I don't know what would happen if there was a proper crash, but then if that did happen all of us with a mortgage would be similarly screwed!

I was just reminded of this as news came in for house prices

We bought in 2007 then the crash

It still doubled over the next ten years so the initial reduction didn’t mean much in the end

We moved into our current home in August 2007 . We paid £435k for it and had a mortgage of £200k which used to keep me awake at night.

It needed quite a bit of money spending on it ti get it up to scratch and we were ok with that as we had some share options due to mature the following year which would cover a lot of the work that needed doing.

Then the banking collapse started and we were really worried. Over the next year the shares we had invested in dropped from £10 a share to a few quid ( can't remember how low they went but it wiped out our plans for being able to renovate the house)

We didn't worry so much about the drop in house value as we had so much equity and prices didn't seem to crash as much as was expected at the time.

The house is now worth £900k and we have gradually been able to do the renovation work that was needed over the 15 years we have been here but we had to scale down our plans.

Our last house was ex-LA. Our vendor bought it in 2007 for £147k and we bought it in 2012, five years later, for £125k. I think if he had done ANY maintenance he could have made his money back. We sold earlier this year for £255k.