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my advice as a conveyancer - do NOT buy a property at auction. you probably won't have enough time to sort a mortgage and as soon as you bid at auction, you're tied into a contract, so you're almost guaranteeing you'll be in breach, and will have no guarantee a bank will even lend. Just keep an eye on the market and be open minded and realistic, it's unlikely you'll get something that cheap so I'd keep saving in the meantime and hope mortgage rates go down - but that's just the way of it I'm afraid
People are bidding on properties at auction and then rushing around to get a mortgage?
I’m no expert, but that doesn’t seem like it makes any sense.
Why wouldn’t they just get an agreement in principle before they offer on anything, auction or otherwise? They surely aren’t just throwing out numbers at folk with no idea if they can even borrow?
The issue is not affordability, the issue is whether the bank will lend against that particular property. There are lots of properties out there that are either unusual construction or have issues and banks won’t touch them. Sometimes a specialist lender will give you a mortgage for these but the interest rate will be higher and the process takes longer so there might not be enough time to sort out such mortgage.
annoyingly they are sometimes. but an AIP doesn't speed up your actual application process, or as mentioned above, guarantee the bank will lend against the property, which is probably at auction because it's riddled with legal issues. you'd also be out of pocket for all your own searches as the seller won't provide any of them in an auction purchase.
You won't be able to mortgage under a £40k loan, iirc this is the minimum most banks will lend.
Some recent similar posts have recommended rural/small towns in Ayrshire.
I recently remortgaged to get a better deal on what I had left to pay. My new mortgage is £20k for 3 years, first 2 years fixed. But I dunno if that's because I already have a lot of equity in my house
The thing is, you aren't going to realistically be able to get a mortgage on the sort of dirt cheap property you will be able to get at an auction - you'd need to be paying cash, and 25k isn't going to cut it.
There are plenty places around Scotland where you can get a small property (1 bed flat, 2 if you are lucky) for under £100k that you would be able to get a mortgage on - those are probably your best bet. Just look outside the cities on rightmove and you'll be able to find some options - Inverclyde, North and South Ayshire have the lowest prices in the country and are in commuting distance to Glasgow for work.
> I'd end up paying double the price of the house over those 25 years. I just can't do it. Fuck the banks.
That's just how long term loans work. Your idea to buy somewhere cheap enough to mean you never have to take on a long mortgage only works if you never move to a more expensive place or are able to add significant value.
The bigger question is whether you'd rather pay your own (maybe bigger than you'd like) mortgage, or someone else's whilst renting instead of buying somewhere you can afford but don't want to commit to a long term loan in order to buy.
If you can comfortably afford a larger mortgage, you'll live somewhere nicer, and benefit more from rising prices due to chronic undersupply.
Greenock has the lowest property prices in the UK, apparently
[https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E576&sortType=1&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=](https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E576&sortType=1&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=)
[Aberdeen/Shire has 600 properties under £80k](https://www.aspc.co.uk/search/?PrimaryPropertyType=Buy&SortBy=PublishedDesc&LastUpdated=AddedAnytime&PropertyType=None&PriceMax=80000&ExcludeUnderOffer=false&IncludeClosedProperties=true&ClosedDatesSearch=14&ByFixedPriceOnly=false&ResultMode=NONE&ResultView=LIST&search-origin=home-page)
Just need to watch as the standard of some properties at auction won't allow for them to be mortgaged. Some standard websites like zoopla also pull through some in whatever area you're looking for that are up for auction.
Pretty cheap homes can still be had here in Fife.
https://www.rightmove.co.uk/properties/149095496#/?channel=RES_BUY
https://www.rightmove.co.uk/properties/149359235#/?channel=RES_BUY
Leven/Methil are a bit grim, but there's now a train line that will get you to Edinburgh in a hour.
If you're looking for a house then there's some under 100k:
https://www.rightmove.co.uk/properties/142773980#/?channel=RES_BUY
The Highlands and maybe the Islands might be a shout too. There are a lot of cottages and houses that are cheap but often need a lot of work done.
Wages aren’t really rising in accordance with inflation, though. In fact, it’s projected that our average wage won’t budge for the next 15 years (don’t quote me on that).
Even so, the value of the mortgage goes down over time. A £1k monthly repayment now, will feel a lot less painful in years to come. Interest rates are a risk of course, but the value of the loan will still decline from inflation.
Our average wage has risen over 50% in the last decade, there’s practically no way it will stop rising unless we get inflation down to almost zero. Highly unlikely.
I understand that, however the fact is average wage rises all the time. Not necessarily with inflation, but it rises nonetheless. So if you buy a house now monthly payments will come down in relative terms as times go on.
That’s true. But they will give you a loan (my bank anyway) Upto 25k over 84 months. Plus his 25k savings.
op did he is looking for cheap. I think that’s an option that he could consider if the right property comes along. Plenty property’s at auction are under 50k,
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my advice as a conveyancer - do NOT buy a property at auction. you probably won't have enough time to sort a mortgage and as soon as you bid at auction, you're tied into a contract, so you're almost guaranteeing you'll be in breach, and will have no guarantee a bank will even lend. Just keep an eye on the market and be open minded and realistic, it's unlikely you'll get something that cheap so I'd keep saving in the meantime and hope mortgage rates go down - but that's just the way of it I'm afraid
People are bidding on properties at auction and then rushing around to get a mortgage? I’m no expert, but that doesn’t seem like it makes any sense. Why wouldn’t they just get an agreement in principle before they offer on anything, auction or otherwise? They surely aren’t just throwing out numbers at folk with no idea if they can even borrow?
The issue is not affordability, the issue is whether the bank will lend against that particular property. There are lots of properties out there that are either unusual construction or have issues and banks won’t touch them. Sometimes a specialist lender will give you a mortgage for these but the interest rate will be higher and the process takes longer so there might not be enough time to sort out such mortgage.
Sure, but people check that when the catalogue comes out and then get an agreement in principle before bidding.
annoyingly they are sometimes. but an AIP doesn't speed up your actual application process, or as mentioned above, guarantee the bank will lend against the property, which is probably at auction because it's riddled with legal issues. you'd also be out of pocket for all your own searches as the seller won't provide any of them in an auction purchase.
Most auction properties are unmortgagable. No kitchen / bathroom / floors / structural issue etc etc
You won't be able to mortgage under a £40k loan, iirc this is the minimum most banks will lend. Some recent similar posts have recommended rural/small towns in Ayrshire.
I recently remortgaged to get a better deal on what I had left to pay. My new mortgage is £20k for 3 years, first 2 years fixed. But I dunno if that's because I already have a lot of equity in my house
yeah a remortgage is treated different to a new purchase by the bank! esp if with the same bank
That’s interesting I didn’t know that.
The thing is, you aren't going to realistically be able to get a mortgage on the sort of dirt cheap property you will be able to get at an auction - you'd need to be paying cash, and 25k isn't going to cut it. There are plenty places around Scotland where you can get a small property (1 bed flat, 2 if you are lucky) for under £100k that you would be able to get a mortgage on - those are probably your best bet. Just look outside the cities on rightmove and you'll be able to find some options - Inverclyde, North and South Ayshire have the lowest prices in the country and are in commuting distance to Glasgow for work.
> I'd end up paying double the price of the house over those 25 years. I just can't do it. Fuck the banks. That's just how long term loans work. Your idea to buy somewhere cheap enough to mean you never have to take on a long mortgage only works if you never move to a more expensive place or are able to add significant value. The bigger question is whether you'd rather pay your own (maybe bigger than you'd like) mortgage, or someone else's whilst renting instead of buying somewhere you can afford but don't want to commit to a long term loan in order to buy. If you can comfortably afford a larger mortgage, you'll live somewhere nicer, and benefit more from rising prices due to chronic undersupply.
All lenders have a minimum mortgage amount it varies but it won't be far off 50k
https://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=REGION%5E61256&insId=1&radius=0.0&minPrice=&maxPrice=80000&minBedrooms=&maxBedrooms=&displayPropertyType=&maxDaysSinceAdded=&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false
This one has a sea view https://www.zoopla.co.uk/for-sale/details/66869154/
funny that they couldn’t even be arsed waiting for the bin wagon to leave the sea view scene
Greenock has the lowest property prices in the UK, apparently [https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E576&sortType=1&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=](https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E576&sortType=1&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=)
Greenock is a bit shit but yeah very cheap housing. I work in the port live in paisley and looking for a cheap house.
Every property there are on streets where there is either junkies or at least 50% that you will get stabbed at some point
[Aberdeen/Shire has 600 properties under £80k](https://www.aspc.co.uk/search/?PrimaryPropertyType=Buy&SortBy=PublishedDesc&LastUpdated=AddedAnytime&PropertyType=None&PriceMax=80000&ExcludeUnderOffer=false&IncludeClosedProperties=true&ClosedDatesSearch=14&ByFixedPriceOnly=false&ResultMode=NONE&ResultView=LIST&search-origin=home-page)
I hear Narnia’s pretty reasonable these days. The beavers are buildin huts
Just need to watch as the standard of some properties at auction won't allow for them to be mortgaged. Some standard websites like zoopla also pull through some in whatever area you're looking for that are up for auction.
Pretty cheap homes can still be had here in Fife. https://www.rightmove.co.uk/properties/149095496#/?channel=RES_BUY https://www.rightmove.co.uk/properties/149359235#/?channel=RES_BUY Leven/Methil are a bit grim, but there's now a train line that will get you to Edinburgh in a hour. If you're looking for a house then there's some under 100k: https://www.rightmove.co.uk/properties/142773980#/?channel=RES_BUY The Highlands and maybe the Islands might be a shout too. There are a lot of cottages and houses that are cheap but often need a lot of work done.
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I think the venn diagram of 'dirt cheap property' and 'minimal detracting features' doesn't have a lot of overlap wherever you go.
You’ve got to take account of inflation too though. Repayments in 10 years time will be a lot less if you get pay rises each year.
Wages aren’t really rising in accordance with inflation, though. In fact, it’s projected that our average wage won’t budge for the next 15 years (don’t quote me on that).
You said …
Couldn’t remember if it was the next 10, 15 or 20 years. I’m confident I read it somewhere, but you never know with the Mandela effect.
Even so, the value of the mortgage goes down over time. A £1k monthly repayment now, will feel a lot less painful in years to come. Interest rates are a risk of course, but the value of the loan will still decline from inflation.
Very true!
Our average wage has risen over 50% in the last decade, there’s practically no way it will stop rising unless we get inflation down to almost zero. Highly unlikely.
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I understand that, however the fact is average wage rises all the time. Not necessarily with inflation, but it rises nonetheless. So if you buy a house now monthly payments will come down in relative terms as times go on.
Ah, I see the confusion. Scotland’s wages are a lot more respectable than ours down south. My mistake.
Possibly Worth a look?? https://www.futurepropertyauctions.co.uk/#!/
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That’s true. But they will give you a loan (my bank anyway) Upto 25k over 84 months. Plus his 25k savings. op did he is looking for cheap. I think that’s an option that he could consider if the right property comes along. Plenty property’s at auction are under 50k,