Friday, April 18, 2008

housing market - time to buy

loft extension
We got a strange letter from the council a couple of days ago. Apparently someone has complained about our loft extension – asking the council to check whether planning permission has been granted for it.

Of course, we sought all the required permissions before we started and were told it only needed building regulations permission – however planning say they don’t have anything to do with the building regulations department (which sounds absolutely preposterous if it’s true).

Anyway – they’ve got to come and see the extension, which isn’t a problem. The only thing we’re left wondering is who decided to complain to the council and why?

It would have to be someone living nearby… there are a couple of candidates I can think of, but I don’t want to think too much about it – no point getting paranoid about your neighbors if you can help it.

The thing is, there are two other newer (and identical) loft extensions which have gone up in our road since ours – one by the same contractors – the other still being done. So if ours is being complained about I wonder if theirs are too? Perhaps someone’s just fed up with the number of loft extensions being put in….

Our next door but one neighbour – who had theirs done just after ours was actually threatened in the street by the guy living opposite just for having his loft done. This guy also decided that since my neighbour’s house didn’t have a roof, his car shouldn’t either… so he took a sledgehammer and smashed it to pieces… it was a Porsche too (I didn’t laugh).

Anyway, the attacker was sectioned, so it’s unlikely to be him.

He also told the police when questioned that he’d been making bombs, so the bomb squad cordoned off the street – but like almost all terrorist enquiries, nothing was found….he’ll probably have added to the statistics that are being used by the government to persuade us that the terrorist threat is real and immediate!

Self fulfilling prophecies and all that…

Lisa’s mum has been looking after George yesterday (because Lisa was at work) and today (because she’s got a private occupational therapy assessment job).

Meanwhile, Lisa’s put in an offer for a flat in Peckham… The offer is a lot lower than the asking price, but they’re considering it seriously… the sellers are builders and they probably just want to get out of the market as soon as possible (they’ve got an entire block of 8 flats to shift).

If she gets it, it’ll be a good investment.

Ok – given that the housing market is plummeting by all accounts (except the accounts of the estate agents who all seem keen to blame the press – until I tell them I’m a journalist) and given that I think it’ll go a lot further down – why is now a good time for Lisa to buy another flat?

Well, bizarrely, this is actually quite a cautious move for us.

Lisa made a good profit from selling her flat in Chiswick and if the housing market was in a better state, we’d probably be thinking about buying two or maybe three properties with it – so that their rent covered their mortgages.

As it is, there’s a good chance prices will drop before they rise and that mortgages will be harder to get and the interest rates will go up. And that would leave us in a difficult situation – if the rates went up, the rent wouldn’t cover the mortgage and we’d have to put in extra money every month…

Not good.

And especially not good if we have another baby and Lisa finds herself unable to work… (two children in nursery comes out at £120 per day around here – and taking tax into account that means you have to earn £40,000 per year or more just to break even!)

Instead we’re going for one small flat in an upcoming area which Lisa can virtually buy outright… that means no mortgage to speak of and whether prices or mortgage rates go up or down is pretty much irrelevant.

Lisa will still get an income every month which if she’s not working, can be used to help offset the effects on us.

So really, this time it’s about reducing exposure to the markets not increasing it.

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