Apart from the non-working spouse point, it would be a bit odd to have no income but tens (or hundreds) of thousands in cash savings?Originally Posted by noTAGlove
If you and the missus are a high rate and basic rate tax payer respectively you can save £30k between you @ 5% before paying tax.
A lot more savings interest is tax free if your missus earns less than £17570.
If you have a Barclays current account, you can earn 5.12% on saving up to £5k.
Max that out over time and then move the £5k into a bond. Rinse and repeat.
https://www.moneysavingexpert.com/sa...best-interest/
Last edited by noTAGlove; 9th November 2022 at 20:00.
I do have a Barclays current account…. Came with the mortgage I have with them!
Save up to £30k and then lump off the mortgage
Here you go.
https://www.barclays.co.uk/savings/i...iny-day-saver/
Can you really imagine a big price drop in house prices ?
It would be a bloodbath for new buyers.
House price drop of .........30 % ? it would be a bidding frenzy
Prices will drop slightly. Less popular houses will drop further, popular areas and properties will fall less and then someone will say " that will do us " and offer.
Im in the construction trade and the slow down is there for us to see. Less being started, more being mothballed and unfortunatly staff being laid off . 60 at at one of the bigger sites only last week and that's not down to seasonal issues.
Cool…. I have to have blue rewards at £5 a month and have £800 in the current account (currently £0!)
Will get it set up
Really helpful - thank you very much
Good shout, in the process of setting it up myself, thanks. The high interest is only up to £5k mind and 0.25% after that if I'veread it right. Still, it's a free £250 a year!
We did a building and renovating trade show last week and it was packed, lots of builds going ahead, but most of the people I spoke to had huge increases in all costs, so I can image a lot of people simply cant afford the build anymore.
I’m aware if the steep increase in materials costs, the project I undertook when I bought a run down bungalow in Aug 20 is now completed and thankfully we got the bulk of the work ( large extension) completed before prices really soared and shortage of materials became an issue.
Is it likely that some materials will fall if demand drops? I’ve still got tradesmen on site finishing off the new driveway, a job that should’ve been done 12 months ago, unfortunately the delay cost me around 3 grand due to the increase in materials cost, nothing I can do about that, but I do wonder whether some if the increases will be reversible.
A drop in prices coupled with a steep rise in building costs will make extensions and renovations less viable, particularly in parts of the north where house prices are lower. Spending £80k on an extension which only increases the value by £40 won’t seem very tempting.
It’ll be interesting to see how it all pans out in the next 12 months, hopefully there won’t be a slump in the building trade because that’ll affect a lot of people, but I fear we’re going from boom to bust. My project was delayed as I struggled to find both a builder and materials to rebuild the boundary walls, I can see tgat going to tge orher extreme as small builders struggle for work.
One of my clients is a window company; they have struggled to find good fitters for years ... he's had a number of guys knocking on his door in the last 4 weeks ... lower skilled/poor trades people are the first to get laid off ...
Property downturn hits UK housebuilders as sales plummet https://on.ft.com/3DYe8Tl
Nothing to see here. There is so much pent up demand and limited supply, sales will never collapse.
Redrow on Friday became the latest large builder to warn of a sharp contraction in sales, echoing rivals Persimmon and Taylor Wimpey, which this week reported significant falls in the rate at which buyers were committing to new purchases, with demand dropping as much as 50 per cent in recent weeks.
Hardly a bloodbath, they'll still have a house.
These things happen, it's happened before...just don't be the one holding the bag when the music stops...the music eventually will start again though.
The slump has arrived I reckon... serendipitous you're mostly done with the works, enjoy what you have.
Margin call….
House prices might take a dip for 1-2 yrs but sure as shit they will rise past any fall before too long .
If you have bought 2-3 mts ago at the peak you probably took a cheap fixed
By the time that is up the value of your house will have recovered and you’ll have been living somewhere nice in that time.
Ignore the negativity
Schadenfreude is not a nice trait.
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On the plus side, does this mean there will be more timber and materials available for us DIYers? Maybe even price falls as well?
I’m sure the prices won’t fall as the suppliers will have worked out people will pay it and they can then keep a cartel going amongst themselves, I was speaking to the builder who has just redone our front drive and he said paving blocks are the only things that haven’t gone stupidly expensive.
Decent well established builders will always get work, it’s the cowboy builders that will suffer, but then again you’ll always get some mug that will employ there services
Amen, Sir.
I moved into my dream house last month and moved my old house to a btl. I got s 5 year fixed on both before the rates jumped. With all the doom and gloom it's very difficult not to think it's all going to fall apart at renewal time so it's nice to hear a positive voice occasionally!
You'll be A O.K. enjoy your home.
This will be my 3rd recession as a house owner
They don't stay down for long and the best advice I ever got financially was to push your limits on a house purchase(I'm not including btl in this) as it's a rock solid investment long term.
Likewise.
When you look long into an abyss, the abyss looks long into you.........
Cheers gents!
Don’t worry, 5 years is for ever in current times. Just think what we have seen in the last 5 years.
Well said Hood, you’re quite right about Schadenfreude being a nasty trait.
I remember panicking in 2008 having bought two properties the previous year, but a wise old mentor of mine told me to relax, said she’d seen it all before, and that prices would be well north of where they were in a year or two. She was quite right. This time round will prove to be the same again.
This was us 10 years ago, I wanted to play it safe with the next house purchase but thankfully the wife persuaded me that we should push the limit, best decision ever.
Cheers..
Jase
I would not wish the worry and concern on anyone who has bought a home and is struggling. It must be incredibly stressful if your payments are rising and you are worried for your future and how you are going to pay for your home, and provide for your family.
However, I have no similar feelings for those who chose to buy multiple houses as an investment vehicle, solely to satisfy personal gain.
Don’t know about Schadenfreude, but if it all goes t1ts up, I will play the world smallest violin.
Get a grip. You are a hard nosed investor. Suck the comments up.
We visited our imminent exchange/purchase yesterday for a measure up, chatting to the agent and yes they have seen sales drop in number but half of that is seasonal, there are 7 flats like ours either for sale/under offer/SSTC and prices haven’t budged. one flat finished to a very high standard was listed on The Modern House for top money and under offer after a week, another flat we failed to buy after a long drawn out process is now SSTC. people still want to move and if you are porting a mortgage and have not overstretched yourself then it’s still viable.
He said this is always cycles and it will be flat for a few months and then transactions will increase again.
This is SE London so may be different in areas where demand is lower.
We have spreadsheet the hell out of the next 2 years with a complex mortgage situation of 3 different products/converting interest only to repayment/extra borrowing etc and it still works out ok as we have an idea of what might be coming until i can sell my flat and whack a big chunk off come remortgage time on our main home.
Asked the agent about renting my 1bed out and he said “don’t worry about that, you will have 1 open day and there will be multiple offers over what you are asking”.
Will not make me a property magnate (will be an accidental landlord) but with the rent nearly double the mortgage it will pay for itself with a small surplus to cover any repairs even with the tax hit, don’t really have much sympathy for those landlords with 90% interest only mortgages on multiple properties though, there’s no margin there when interest rates go up to ‘normal averages’, any fool could see that.
Am I correct that this is an EA who is going to make a sizeable commission once the flat is sold, and only acts in the sellers interest?
My strategy also. Have always maxed out on the house we live in..
It could go horribly wrong one day, but I have faith in bricks and mortar looking after itself in the long term.
Of course this is true as wages rise with inflation and GDP grows.
I fully agree with this, but I believe now is not the optimum time given interest rates are still on the rise and unemployment is forecast to double. In fact the BoE has to create unemployment to get inflation down.
Both of these are highly negative for the housing market and will dampen any pent up demand.
So, I am not saying don’t load up. Just wait a couple of years. What is the rush? You not missing out on anything at the moment.
Who are the landlord with 90% mortgages? Most BTL products are a maximum of 75% and now the fact they’re yield based it means you’re often lent a lot less than 75% in poor yield areas like London.
Based on yield you’re more likely to get 60-65%. Even less now.
I went the other way - my first house (that I live in) has turned out to be my forever house so I have had none of the switching costs of trading up. When I look at what I've put in the markets over the years especially after I paid off the mortgage I'm ahead - especially on investments that are in my pension tax wrapper.
Also agree with that. I am not saying now is the time to max yourself out. Of course it isn’t.
(By the way you forgot to mention the crippling energy prices which may make many business not viable in the next 12 months. )
I am just agreeing with Hood’s point. There is no need to fear if you have purchased in the last couple of years. Long term it should be fine especially if you are lucky enough to be locked into a mortgage rate.
Probably no need to fear, but if you look at the last peak of the housing market in Q3 2007 the Nationwide average house price was £184,131.
Nationwide average house price in Q3 2022 is £273,135.
Wow, you think. Loads of money made. Well steady on.
Lets take inflation which has average 1.513 over those 15 years.
If average house prices had increased by inflation from Q3 2007 they would be worth £278,590.
So between 2007 and 2022 house prices lost out to inflation. And that was with free money for most of those 15 years.
Imagine what happens when you buy at the top in 2022 and there is no more free money about for the next 15 years.
Sources:
https://www.housepricecrash.co.uk/in...nal-inflation/
https://www.bankofengland.co.uk/mone...ion-calculator
Given you are so bearish about property where do you invest your capital?
I assume you are not a home owner and rent?
Last edited by Montello; 12th November 2022 at 21:58.
I’ll not bore with any details.
Don’t be silly, he believes in his theory so much he’s sitting tight on his house despite him being set to lose 30% at least over the next few years .
tisn’t that their job?
Sure.
Good to know the EA thinks all is good in the housing market.
Phew. Order restored.
What a strange comment.
We bought our house to live in. It is our home for happy times, not some investment vehicle.
People who rent have happy times too, even happier if they know their capital is being preserved in the bank whilst their landlord hemorrhages capital.
Haha.
Had great times renting in London in my 20s. Not sure it would be any fun with a family in your 40s.
Property for me has gone dead the last 2 weeks, agents are struggling which is a combo of time of year and the economy, I noticed several properties I photographed a while ago have come back to market so I suspect chain collapsing or people getting cold feet.
Chatting to one of the dads at my sons football team who's a site chippy on a big house building site and he said they have been told to finish off what they have started but not to start on the remaining houses, I imagine the developers will wait for better times to build on the remaining planning permission..
The highlighted part from the Autumn budget statement would (depending on how it is implemented) indicate that repossessions should be minimised (with an element of kicking the can down the road due to the loans being added to household debt) which intimates that keeping the property market chugging along and not seeing prices plummet remains a key priority for the government. In short taxpayer bailouts of homeowners who are unable to pay their mortgages, secured against their property (like an obverse Help to Buy scheme)
That's only for claimants on Universal credit. The issue you'll have lots of homeowner who aren't on UC unable to make mortgage payments if interest rates keep rising.
That was precisely my strategy between the ages of 21-50. Max out every few years and live in a good sized house and bought a couple of BTLs on the strength of the main house as well. Then all debts were cleared at 55 on the profits of the BTLs. It is simply a case of being positive and using your head to capitalise on the current environment rather than just sit back and feeling sorry for yourself.
Why people panic and moan is beyond me, we have had recessions before but we always come out of them sooner or later. This is a buying opportunity as you should always buy in a price lowering curve.
Well done. You benefited from a 27 year property bull run.
I'm not sure it's the people with money panicking about the recession.
There will be people who have maxed theirselves out, have negative equity, struggling to pay bills and feed their family or as you call them buying opportunities.
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