HSMP - Can we buy house in UK?

[Jk2007]

(1) As HSMP visa holder, can we buy a house in UK?

(2) What are the tax implications?

(3) What happens if one does not get ILR? Can we continue to retain the property?

[manindergill]

(1) As HSMP visa holder, can we buy a house in UK?

(2) What are the tax implications?

(3) What happens if one does not get ILR? Can we continue to retain the property?

1). You can buy a house but generally we get a loan after the VISA is extended and with showing some credit history.

2). I don't think any tax advantage like in India.

3). If you can pay £700 + on your income in some another country, I think retaining should not be a issue. But I did some research on this and found loan is given on the basis of a personal living/renting basis. So, I think one's monthly payments may change if you switch to moving it to renting.

I had plans for buying a house, but dropped after HO recent rule changes. Will never buy a house over here now. Collect as many £s as I can and move back to India or US. So, I advise you not to get trapped into any big bonding.

[LondonBlonde]

Jk2007 - getting a loan is not easy. Not many banks will see you as permanant enough to take out a mortgage.

We were turned down 4 times before switching to another brokerage. Once we did, we got three loan offers from the very same lenders that turned us down before. I think it may be a case of who you know in this country.

Will send you the name of the guy who helped us if you wish.

Yes, you will be able to rent out and keep your property if you leave. I've been told that the bank is only concerned with your payments. If you keep them up, they will not bother you even if your situation changes completely.

LondonBlonde

[skilachi]

Buying a house/property is a good investment in the UK. Wud strongly advise if you can afford to buy one, then go for it. Even if you are not living there, you can rent it out and make sure the rent u are collecting will pay for the mortgage and also u might be makin an extra few pounds from the rent say £100, so in a year u wud have made £1,200 profit and remember u wud also have covered the mortgage from the rent as well.

And if u do keep the property for 1-3yrs, it wud have appreciated by atleast 10-20% so lets say u bought one for £50,000 and in 2-3yrs wud have gone up to like £75,000 (well all depends on the location, types of house, bedroom) but hope u get wot i'm tryin to say.

[captain74]

skilachi

On the whole I agree with your assertion that buying a house in the UK is a good idea. However, you are making some rather simple assumptions here.

Firstly, I do not think you have actually done some sums on the mortgage rates and resulting monthly payments you need to make. I would be really surprised if you are able to cover your mortgage payment and even save a 100 pounds just from the rent you receive. Generally, a more likely situation is that you need to add 200-250 pounds to the rent and that just about covers the repayment of mortgage (assuming that it is a mortgage for 25 years) - so no 'profits' there I am afraid!

Secondly, 10-20% appreciation in property prices in near future is a bit much to hope for I think - especially given the escalation seen in the recent past and the current situation with the inflation and borrowing rates.

I work in financial services myself and had been looking out for a house for the past few months. I have come to the conclusion that it is no longer a good idea for me given the current climate and the economics involved in buying a house. Hoping to see some stagnation (or even a little bit of a fall) in prices over the next year before thinking of buying again.

Regards

[rg1]

Currently Buy to let market is not that good.

You can buy house without getting ILR but may not get a good mortgage deal.

[manindergill]

And if u do keep the property for 1-3yrs, it wud have appreciated by atleast 10-20% so lets say u bought one for £50,000 and in 2-3yrs wud have gone up to like £75,000 (well all depends on the location, types of house, bedroom) but hope u get wot i'm tryin to say.

Property market in UK is already at its peak , I don't say it won't move up, but after a recent intrest rate hike from Bank Of England from 5 to 5.25%, I expect property rates to come down. This may be my personal opinion as I am not a property market expert as well. But definately I don't expect much apprecitiation from here, pricesmight consolidate for another 1-2-3 years before moving up.

[LondonBlonde]

And if u do keep the property for 1-3yrs, it wud have appreciated by atleast 10-20% so lets say u bought one for £50,000 and in 2-3yrs wud have gone up to like £75,000 (well all depends on the location, types of house, bedroom) but hope u get wot i'm tryin to say.

Property market in UK is already at its peak , I don't say it won't move up, but after a recent intrest rate hike from Bank Of England from 5 to 5.25%, I expect property rates to come down. This may be my personal opinion as I am not a property market expert as well. But definately I don't expect much apprecitiation from here, pricesmight consolidate for another 1-2-3 years before moving up.

Experts have been saying this for the last 10 years. No one expected much further growth, yet look where we are.

[webhunter]

I pay around 700 rent for my living. Would'nt I be better off paying that to bank mortgage for my own house?

Even taking the worst case scenario and assuming that I dont get even a penny rise on my property after 5 yeras, I still would have saved 700*5*12 pounds, which I would have just given to my landlord if I was just renting???

[first2last4]

And if u do keep the property for 1-3yrs, it wud have appreciated by atleast 10-20% so lets say u bought one for £50,000 and in 2-3yrs wud have gone up to like £75,000 (well all depends on the location, types of house, bedroom) but hope u get wot i'm tryin to say.

Property market in UK is already at its peak , I don't say it won't move up, but after a recent intrest rate hike from Bank Of England from 5 to 5.25%, I expect property rates to come down. This may be my personal opinion as I am not a property market expert as well. But definately I don't expect much apprecitiation from here, pricesmight consolidate for another 1-2-3 years before moving up.

Experts have been saying this for the last 10 years. No one expected much further growth, yet look where we are.

Agreed.

But we can start sensing the stagnation now. I am in touch with the property prices around London area and some of them have actually reduced thier prices by 1 - 2 %, a clear sign of prices getting stagnant atleast

[captain74]

I pay around 700 rent for my living. Would'nt I be better off paying that to bank mortgage for my own house?

Even taking the worst case scenario and assuming that I dont get even a penny rise on my property after 5 yeras, I still would have saved 700*5*12 pounds, which I would have just given to my landlord if I was just renting???

Webhunter

Firstly the worst case scenario is that you make a loss and not just 'no gain'.

Secondly, I think you are forgetting that the bank charges interest! A repayment mortgage generally costs a little more than the rent on any given property so you absolutely need the prices to go up if you are not to make a loss in real terms!

If you take an interest only mortgage the interest is likely to be exactly the same as the rent you pay now - so no change in your fortunes really. In this case it is not the landlord but the bank getting rich on your money In fact in this case if the prices do not rise by more than the effect of inflation + the initial and final costs relating to buying and later selling the house, you will again make a loss!

Regards

[webhunter]

That's an interesting perspective and one definitely needs to evaluate it.

The amount i quoted over 5 yrs rent is atleast 42000 pounds. Well, if I dont buy a house then I have definitely lost the 42000 pounds for sure as pure rent.

If I did buy a house, even taking into consideration of the worst case scenarios you mentioned (assuming that one is so unlucky) I would'nt still think one would make such a huge amount of loss (42000).

Now that is over 5 years, make it to 10 years, then you would pay 100,000 for just rent. and i dont think one can possibly make a loss of 100,000 over 10 years on a property bought for 200,000

[LondonBlonde]

The problem is supply. London cannot support more growth, so things have to give somewhere.

I think you will continue to see price growth due to lack of supply. In five or ten years, many will wish they bought now as I expect things will be even worse then.

LondonBlonde

[captain74]

That's an interesting perspective and one definitely needs to evaluate it.

The amount i quoted over 5 yrs rent is atleast 42000 pounds. Well, if I dont buy a house then I have definitely lost the 42000 pounds for sure as pure rent.

If I did buy a house, even taking into consideration of the worst case scenarios you mentioned (assuming that one is so unlucky) I would'nt still think one would make such a huge amount of loss (42000).

Now that is over 5 years, make it to 10 years, then you would pay 100,000 for just rent. and i dont think one can possibly make a loss of 100,000 over 10 years on a property bought for 200,000

Webhunter

The issue here is the LOAN you are taking. If you purchased the house with cash then all your assertions have some merit.

The point I am making is that since the purchase is financed by a mortgage you have to pay interest for that and hence are building no (in case of interest only mortgage) or very little equity (in case of repayment mortgage) in the house.

The 'saving' you are talking about is fictional in absence of any equity in the house. Whether you pay rent or interest, it is the same thing - it is going out of your pocket and into the landlord's or the bank's pocket.

It is not being saved anywhere for you!!!

Regards

[LondonBlonde]

Captain - it's not that simple. Even inflation plays a big factor, and it shot up by three percent last month. Each time this happens, those with existing mortages realize a gain.

In general, it is very difficult to lose out on property as an investment if you have a long term approach.

LondonBlonde

[jbinuk]

[quote="webhunter"]I pay around 700 rent for my living. Would'nt I be better off paying that to bank mortgage for my own house?

Even taking the worst case scenario and assuming that I dont get even a penny rise on my property after 5 yeras, I still would have saved 700*5*12 pounds, which I would have just given to my landlord if I was just renting???[/quote]

You have to consider that when you are paying mortgage (assuming mortgage repayment), big part of the 700 you pay is interest. For a 700 monthly repayment, you likely to be paying approx 450 just for the interest. So after 5 years, you have only saved 250*5*12. That means you need to be able to sell your house (5 yrs after) at least approx 450*12*5 more than the price when you bought the house - to break even.

[Rog]

While investing in property is a sound option in the long term in an ideal situation where we were eventually going to become British citizens as per original HSMP. In today's climate going by the Immigration Minister's attitude towards HSMP holders one has to be vary for any long term investments in the UK.

[Markie]

Housing front in UK is very much driven by demand...not necessary from HSMP holders like us but basically from migrants coming from the EU and FSU.

even though obne would imagine that there will be a downtrend in the market as there was recent interest rate increase...I doubt that it would be enough to move even just wiggle a little that price uptrend...

getting very much expensive nowadays...

[full nelson]

Guys

Please remember this is not property market related site, so lets stick to HSMP related discussions

For those interested in RE, there are thousands of forums, i.e. http://uk.messages.finance.yahoo.com/Fi ... &m=tm&rt=2

[Jk2007]

Thanks very much for all of your reply.

full nelson, this is relevant to HSMP, because making investment in housing property is a major decision, and one needs to take into account the uncertainty of HSMP Visa, especially if you do not know if you can get ILR.

I have done some searches in property sites / news sites and found that in most cases, the prices are still such that one has to pay a mortgage monthly payment of about 20 - 25% extra amount than the rent you would have paid.

Assuming that we stay here for 5 years atleast as HSMP holder, would we be able to buy a house and sell it at the end of our visa without making huge losses?

[full nelson]

Yes, your question was absolutelly relevant to HSMP, but then it diverted just to a general property market discussion - as I said there are loads of sites where it can be discussed. Nothing to do with HSMP

Here's another link for you if you like
http://timesbusiness.typepad.com/money_ ... index.html

[skilachi]

Well guys,

At the moment i've got 2 properties in the UK. 1 that i live in and the other but to let, which i'm making hugh profits off from and its actually covering my mortgage. It all deoends on the location as at the moment my property is in london and its a good location which i've had for almost 3yrs

[first2last4]

Well guys,
It all deoends on the location

Would like to add here location and TIME, and the time does not look good at the moment. You have made the profit cause you may got it at good time which is not at all right for now.

[otun]

full nelson. please read the topic b4 going into it fully!uhu? 4 ur info. the topic reads- HSMP can we buy house?

thanks so much.

[jagberg]

Hi LondonBlonde, Could you please send me your brokers details. Id like to buy a property but have been told I need at least 2 years left on my visa to do so. Id like to time my application so that I have enough time to buy, which would be almost immediately. Thanks