Cover me in debt, debt to the eyeballs (or advice on buying a shoebox in England)

[Dauphin]

Dear homeowners, please give me your anecdotal advice on buying a property. Things that you wish someone could have forewarned you about before you made the purchase. Housebuying guides are good for stock things, but it's the quirks of housebuying that often tell a story.

So anyway, I've seen a place I like and am currently looking at the selling price of similar housing in the immediate neighbourhood. Doing that I see that the asking price for the place I'm interested in is 5-6% more than the highest selling price in the last 6 months. Fair enough house price inflation, but I think the vendor is chancing his luck...hoping that by asking for a high price it will at least raise the prospective offers a percent or two.

It still hasn't hit me fully I don't think, but a debt mountain of 4 times my salary will be moving to a headache near me....

[Cort Haus]

5-6% more than the highest selling price in the last 6 months.

Sounds about right.

[Cort Haus]

I'm trying to buy at the moment with my GF. We've sacrificed just about every financial pleasure for years to save for the deposit and are planning to borrow £250k. Life is hard. Very hard.

[Bugs ****ing Bunny]

Look at the corners of doors and windows. If you see any cracks that are visible on both the inside and outside, walk away.

If it's in an area of clay soil, and the neighbours have a sizeable tree close to the one you're looking at, walk away.

Make a cheeky offer. They might take it.

[Bugs ****ing Bunny]

Incidentally, I bought mine in 1994. I got a brand new 3-bed semi with detached garage and gardens front and back for £69,000. You may hate me now.

[pchang]

3.29 X salary is average now

http://money.uk.msn.com/Mortgages/firsttimebuyer/article.aspx?cp-documentid=2635693

4X may be a bit of a stretch unless you have no other debt and are willing to live like a monk.

[pchang]

Of course

In the US, mortgages = 4.5X salary are considered affordable. Mortgage interest is tax deductable here and makes a big difference. I don't know what it is like in the UK.

[Bugs ****ing Bunny]

Nope. Mortgage interest very much isn't tax-deductable here. There's also a specific tax on house purchase- Stamp Duty.

[Dauphin]

Re: 3.29 X salary is average now

Originally posted by pchang

http://money.uk.msn.com/Mortgages/firsttimebuyer/article.aspx?cp-documentid=2635693

4X may be a bit of a stretch unless you have no other debt and are willing to live like a monk.

My third option - I plan on getting a nice big salary increase in April.

[Kuciwalker]

Originally posted by Lazarus and the Gimp
Nope. Mortgage interest very much isn't tax-deductable here. There's also a specific tax on house purchase- Stamp Duty.

/me winces

[Dauphin]

1% stamp duty (more if over £250k) is nothing compared to the average cost of a basic home around where I am looking. Well in excess of $300,000.

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/af.stm

Bromley
Average Cost: £286,384
Detached: £528,968
Semi-detached: £308,973
Terraced: £241,140
Flat: £187,662

[Zkribbler]

Originally posted by Lazarus and the Gimp
Nope. Mortgage interest very much isn't tax-deductable here. There's also a specific tax on house purchase- Stamp Duty.

Oh crap. Quick, throw some tea into the harbor.

[Drogue]

Re: Of course

Originally posted by pchang
In the US, mortgages = 4.5X salary are considered affordable.

In affordability measures, I've seen 7x mortgages being done. Usually for new graduates - starting salary of £30k doesn't buy much London property, but many of these jobs will rise to £50k in 3-5 years and more in the long term, so a £210k or so mortgage is feasible.

[Cort Haus]

Originally posted by Kuciwalker
* Kuciwalker winces

I made a rant thread about UK stamp duty a few months back. In fact, it was when we put the offer down on the place we're tryinging to buy. £9k tax on buying a modest home is a nasty sting, and our eeeevil chancellor is happy to rape our wallets.

A humane government would adjust the thresholds and rates in accordance with the insane and out-of-control property inflation in recent years, but unfortunately this govt is not humane.

[Cort Haus]

Re: Re: Of course

Originally posted by Drogue
starting salary of £30k doesn't buy much London property, but many of these jobs will rise to £50k in 3-5 years

I dunno if there are that many 25yo on 50k. Maybe in your circles, but not for most folks. I hope not, or my life has been even more of a disastrous failure than I ever imagined.