The housing market...

octatonic

LuttiS said:

Lots of great comments thanks. 

I think waiting is the best course of action for now. I'm not in a particularly bad situation now, i'm still able to save and not in any dire need to move.

The house i mentioned was just an example of one of the two available.. all the features and such are as an amateur sees them.

Out of curiosity (and lack of knowledge) @octatonic ; how did you get to the £20k figure. Obviously, it's what you do, so i'm not disputing it, just curious about the breakdown?
From what i can see, needs a bit of paint, bit of floors, bits of a kitchen, a window and the lawn needs mowing, which i can't see getting to £10k let alone £20k?

Everyone underestimates how much it will cost.
If you think you will spend £10k then you will probably spend £15-20k.
It is just how it is.

Out of the ones we've done more than half have needed either a full rewire, or a partial rewire, or a new consumer unit.
Same with requiring a new boiler.
Or you will find some woodworm that needs to be sorted.
Or you will need to re-roof (partially or completely).
Or you'll find a tree growing into a sewer that will need chopping down and the drain lined.
Or you'll find some damp that will require a DPC and replastering/redecorating etc.
Or you'll find that window frames have rotted away and need fixing or replacing.

If you are lucky you will just find one of these things, but you could be unlucky and end up finding half a dozen.

There will almost always be *something* that you haven't accounted for and it is better to budget for this, rather than cross your fingers and hope it comes in on budget.
I reckon out of the dozens we have done maybe 3 have come in close to budget.

Also, doing works often uncovers a different thing.
You might end up damp proofing and find that you have a serious electrical bodge that is unsafe.

I'm not trying to scare you off- it is fun, in its own way (and kinda addictive), but you just have to be a bit elastic with your spending.

hywelg

Estate agents are renowned for being full of bullshit. 

And @octatonic is possibly right but possibly underestimating . Work out a budget and timescale, then double both. But also check out the history of the area to see.what the market will stand to see if you will get a return on your improvements. The think hard about whether you want to stay in that area or move on. Then think about living with builders mess for that long. You need space to do a place up. There's nothing worse than having to live in the mess, if you can close a door on it so much the better. 

octatonic

hywelg said:

Estate agents are renowned for being full of bullshit. 

And @octatonic is possibly right but possibly underestimating . Work out a budget and timescale, then double both. But also check out the history of the area to see.what the market will stand to see if you will get a return on your improvements. The think hard about whether you want to stay in that area or move on. Then think about living with builders mess for that long. You need space to do a place up. There's nothing worse than having to live in the mess, if you can close a door on it so much the better. 

The £20k budget was very much on the low side.

If you have to put in a new boiler, replaster the whole house, do new flooring, DPC, new electrics, roof, windows + an extension then you could be looking at over £100k, depending on the size of the house and the condition, plus the goal.
We have a friend in Ealing who just bought a place that needs everything doing and she is budgeting £120k.

I agree that living through it can be a hassle- we said we would never do but again but I currently have a plumber, electrician, two teams of painters and a carpet fitter in our house getting it ready for rental.

Fretwired

House prices have stagnated in London and it's spreading out to the shires. There are also some bargains around as the BTL crowd sell up in the face of government policies and higher taxes.

I think Brexit gets blamed for a lack of homes in some areas as builders are not interested in building anything new just in case the economy takes a hit and they can't sell it, and people are staying put for the same reason rather than moving to a bigger house or downsizing. That said it depends on the area. Where I live there are very few houses for sale. My sister-in-law is mover to Herefordshire and the town she has chosen has a wide choice of 200+ homes at reasonable prices. She sold here large detached family home for £650K and is buying a large detached bungalow for £190K. You can get a detached three bed house for £250K ...

TheMarlin

Garthy said:

3 bed houses have ALWAYS been a rare commodity around here. 

A friend of mine refused to pay over £100k for a 3 bed semi with only one bathroom in 1998 and said he’d wait for this madness to correct itself. Those houses are now £400k and he is still in his flat.

I refused to buy a house that hit £160k. Thought it was stupidly expensive.  Now worth £350. 

Wish I had bought it. Wouldn’t have the milestone of a mortgage I have now....

JezWynd

octatonic said:

The housing market is very slow right now and will continue to be for a while yet.
People are not selling or moving because things are uncertain.
House process are either dropping or flat in most areas and housing stock is less than half what it usually is.
Most people who are selling now have to (for financial reasons or probate).

Personally I would wait a year before buying.
I expect things to drop a bit more and or possibly a lot more- we don't really know.

This describes the situation perfectly imo. The press are banging on about falling prices (though that’s probably only noticeable in London and parts of South East). Waiting to see how this fall pans out isn’t a bad idea. That said, if something turns up that suits you, go for it, Wales is unlikely to see the kind of fluctuations that could be a problem.

There seems to be very little on the market at present; Brexit is having an effect insomuch as people are uncertain and talk of a falling market only adds to this. The general mood seems to be ‘Let’s wait and see’ but if you find a property you like then buying now isn’t a problem.

LuttiS

Thanks @octatonic and all, lots to think about.

I'll just bumble along business as usual I reckon. If I see a place I'll have a look. If I like it I'll go from there. 

octatonic

LuttiS said:

Thanks @octatonic and all, lots to think about.

I'll just bumble along business as usual I reckon. If I see a place I'll have a look. If I like it I'll go from there. 

Happy to help.
The first few times you are bound to make the odd mistake.
If I could have my time again I'd concentrate on the book keeping element a bit more.

I run a tight ship now, but in the past I'd overspend on certain things- taps and window/door furniture mostly.
Shiny shiny...

spark240

First £20k budget for a renovation is not unreasonable at all, I revamped a 2 bed semi recently, and it wasnt far off that, rewired myself, new Kitchen, Heating and boiler, bathroom, complete redec, front door and window, some minor repairs....result...£20k.

House prices....well we have had a few rentals for the last 12 years, all bought for around 70k-85k, they are now circa 100k -120k...so thats the reality in price rise, the good news is we made good income from he low interest rates...however  that wont really apply if you are living there. 

I suspect  the question for you is...do you want a new build  or older property to do yourself, we did buy one new build as BTL and to be fair its been ok, but clearly there are some horror stories out there.

Buy now they are bound to go up....err No...I dont think so, Landlords are dumping houses like mad at the moment, and that will continue in the short term, BTL is not what it was, 

I believe now that the reason to own your own home is purely for security and peace of mind, if you do it on the premise it will make money your on dodgy ground for the next 10 years I reckon,   

WezV

I feel like I live in a different country to you guys.

There seems to be new homes going up on every spare plot here. On going new developments, some rather sizeable.

i just got a great 5 year deal on a remortgage because the house had increased in value more than expected.

its a 3 bed semi.

DiscoStu

I bought a doer-upper in 2002. I'm still in it and it's now worth 4x what I paid for it and my mortgage is very cheap. Happy days!

Haven't finished doing it up yet though... Garden is getting ££££ spent on it this month to finally make it look good.

hywelg

DiscoStu said:

I bought a doer-upper in 2002. I'm still in it as it's now worth 4x what I paid for it and my mortgage is very cheap. Happy days!

Haven't finished doing it up yet though... Garden is getting ££££ spent on it this month to finally make it look good.

Pah....we moved here in 1987 and I'm still not finished. It's a big Edwardian house so we can close the door on a room as we do it. It's slow because I won't employ a builder or tradesmen if I can do it myself simply because they don't usually do as good a job as I will do.

Witness the builders that use sand and cement with old porous bricks, silicone to install glass, period  looking tiles laid with 3mm gaps, decorators who let their sandpaper scratch glass. Seen it all and trust very few of them.  

I'm currently restoring the hall stairs and landing and it's very slow and time consuming. But it will be splendid when finished. Currently applying scumble glaze to the woodwork on the landing to make it look like original. That sticky mess you get when you strip very old wood back, that's the scumble glaze. It was a cheap way of making painted wood look like expensive polished woodwork. 

LuttiS

The problem with the much of the area i'm looking at is that there are ceiling prices that are rarely much above what the property is on for. So a doer-upper up here is not so great. 
Of course, dumps are now being marketed by the EA's as "chance to put your own stamp on it" and charging accordingly

Guitar_Slinger

@LuttiS - are you paying rent? Me and the missus bought a house in our early twenties because I didn't want to pay rent to shady London landlords.  I preferred living in a shitty house while chipping away at my own mortgage (rather than their BTL one).

The missus didn't like it at the time, but she changed her mind as we fixed the place up when we could afford to.

boogieman

hywelg said:

DiscoStu said:

I bought a doer-upper in 2002. I'm still in it as it's now worth 4x what I paid for it and my mortgage is very cheap. Happy days!

Haven't finished doing it up yet though... Garden is getting ££££ spent on it this month to finally make it look good.

Pah....we moved here in 1987 and I'm still not finished. It's a big Edwardian house so we can close the door on a room as we do it. It's slow because I won't employ a builder or tradesmen if I can do it myself simply because they don't usually do as good a job as I will do.

Witness the builders that use sand and cement with old porous bricks, silicone to install glass, period  looking tiles laid with 3mm gaps, decorators who let their sandpaper scratch glass. Seen it all and trust very few of them.  

I'm currently restoring the hall stairs and landing and it's very slow and time consuming. But it will be splendid when finished. Currently applying scumble glaze to the woodwork on the landing to make it look like original. That sticky mess you get when you strip very old wood back, that's the scumble glaze. It was a cheap way of making painted wood look like expensive polished woodwork. 

I had to strip scumble glaze off every bit of woodwork in my last house and, agreed, it’s evil stuff. I got it down to a fine art eventually, using just enough heat from a heat gun to soften it but without it burning, but it still goes like toffee and sticks to everything. Then of course, all the wood filling was done with putty, which falls out because it’s dried rock hard and shrunk over the years. Hope I never have to do a job like that again.

@hywelg ;I’m actually amazed you can still get scumble. What about the combs? Are they still available or are you using old gear? 

LuttiS

Guitar_Slinger said:

@LuttiS - are you paying rent? Me and the missus bought a house in our early twenties because I didn't want to pay rent to shady London landlords.  I preferred living in a shitty house while chipping away at my own mortgage (rather than theirs).

The missus didn't like it at the time, but we fixed the place up when we could afford it.

Yeah we are, its not a bad deal that we're on (we know the landlord - mates rates ) so we're not haemorrhaging money there, but i get what you mean, i'd rather be paying off house than paying landlord..


We've decided to look for a smaller place that we can aggressively pay off mortgage for 5 years or so (while kid(s) is small and doesn't need so much space) and then look to move again. 

menamestom

WezV said:

I feel like I live in a different country to you guys.

Me too.  South Manchester is very bouyant, probably due to things like the airport expansion, Media City and general migration from the south. Also lack of housing stock and the constant battle to get schemes though planning in greenbelt sites.  Also, good schools seem to have micro booms near them as people want to move into catchment areas.

Our house has gone up from around £200k to £320k in about 5 years, which is great but useless if you want to move up within the area.  Ours is a classic 30’s bay fronted 3 bed semi, reasonable size but our growing family of 4 needs a bit more space and we’d need a massive jump in price to move to a 4 bed, but equity and LTV with the price rises mean extending is more attractive and doable.

To the OP, don’t wait too long, as long as you build in some leeway with your figures to cover interest rate rises you’ll fine that you always will over time with property, and the earlier you get them the more you win.

Octafish

hywelg said:

DiscoStu said:

I bought a doer-upper in 2002. I'm still in it as it's now worth 4x what I paid for it and my mortgage is very cheap. Happy days!

Haven't finished doing it up yet though... Garden is getting ££££ spent on it this month to finally make it look good.

Pah....we moved here in 1987 and I'm still not finished. It's a big Edwardian house so we can close the door on a room as we do it. It's slow because I won't employ a builder or tradesmen if I can do it myself simply because they don't usually do as good a job as I will do.

Witness the builders that use sand and cement with old porous bricks, silicone to install glass, period  looking tiles laid with 3mm gaps, decorators who let their sandpaper scratch glass. Seen it all and trust very few of them.  

I'm currently restoring the hall stairs and landing and it's very slow and time consuming. But it will be splendid when finished. Currently applying scumble glaze to the woodwork on the landing to make it look like original. That sticky mess you get when you strip very old wood back, that's the scumble glaze. It was a cheap way of making painted wood look like expensive polished woodwork. 

That in particular does my head in. Regularly see cowboys repointing old Victrorian era soft-red brick buidlings with modern cement mortar and most don't think there's anything wrong with it or know that it causes brick spalling. To top that I recently saw some bodger using an angle grinder to fuck up the brickwork rake out brick joints. At least whoever tried to mess up the brickwork on my house couldn't be bothered to rake out and just put thin smears of cement mortar over the lime meaning most of it can just be picked off .

Phil_aka_Pip

menamestom said:

don’t wait too long, as long as you build in some leeway with your figures to cover interest rate rises you’ll fine that you always will over time with property, and the earlier you get them the more you win.

I always calculate mortgage prices assuming an interest rate of 5%. If I've budgeted for that, then my rear end is covered if the rate rises that far. And if I've overpaid (as if the rate were 5%) then I'm less in debt with the mortgage company if things were to go pear shaped later.

LuttiS

Phil_aka_Pip said:

menamestom said:

don’t wait too long, as long as you build in some leeway with your figures to cover interest rate rises you’ll fine that you always will over time with property, and the earlier you get them the more you win.

I always calculate mortgage prices assuming an interest rate of 5%. If I've budgeted for that, then my rear end is covered if the rate rises that far. And if I've overpaid (as if the rate were 5%) then I'm less in debt with the mortgage company if things were to go pear shaped later.

Cunning.

Looking at it, i'm just a few grand off getting a 20% deposit for some of the "acceptable" properties up here, once there there are some pretty good 5yr fixed rates (1.8%ish). Hopefully aggressively paying there will put us in good stead.

Should note that Mrs.L is currently writing up thesis at the moment which is set to be done by the end of the year so all this is on one income. In 5 years i'm confident she will have an income to overpay with.