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FTB's and buying now..
wymondham
Posts: 6,356 Forumite
This is not a bashing excercise and I don't claim to know anything different than any other forum member (actually less as I don't have a financial background!) but if you'll excuse me I'd like a bit of a rant as it's a Friday!
There are lots of new threads appearing from FTB's who seem to be determined to buy, and buy now regardless of pretty much all evidence to persuade them to the contrary. To be fair there are some who have listened to the comments and either gone ahead anyway, or had a change of plan and either is fine, just as long as they are at least aware of the facts.
These facts are becoming clearer by the day about the way things are going with the housing market/economy (and from many different respected sources) - FTB's will lose thousands of pounds a month and more than likely they will go into negative equity as well - a double whammy. :eek:
I would always recommend buying and always have done in dim past, but not now, this is a new ballgame...
Now is the worst time to buy in a generation - you could not time it any worse if you carefully calculated it, but this fact seems insignificant to most. You'd better be damn sure your job is secure before being a FTB, especially if you are buying a newbuild!
When I first bought many moons ago the main aim was to save money as it was tight. Rent was high and mortgages were low - the market was ok and it made sense. Rent is now cheaper compared to buying, as that purchased house is a rapidly depreciating asset. Saving money does not seem to enter the game with FTB's and many look down their nose at renting, when this route could save them a bundle and offer a means to hold off until better times.
I suppose a silly way of highlighting points here is to use the car analogy
(??!):
Would you buy a new car if you knew you could buy it next month for £1,000 less? (point = it's depreciating)
Would you take a big loan to buy a new Ford Fiesta for £30,000? (point = it's overpriced)
Would you?? Of course you wouldn't - that's ridiculous!! but it's the same
principle as buying a house now (crude I know, but the same!).
Sorry to rant, but many FTB's are not treating house buying anywhere like as seriously as they should - it's probably going to be their biggest purchase in their life and they are the most financially exposed to downturns. It's their money and they can do what they like with it at the end of the day, but as this is a money saving site I feel obliged to rant today!
There are lots of new threads appearing from FTB's who seem to be determined to buy, and buy now regardless of pretty much all evidence to persuade them to the contrary. To be fair there are some who have listened to the comments and either gone ahead anyway, or had a change of plan and either is fine, just as long as they are at least aware of the facts.
These facts are becoming clearer by the day about the way things are going with the housing market/economy (and from many different respected sources) - FTB's will lose thousands of pounds a month and more than likely they will go into negative equity as well - a double whammy. :eek:
I would always recommend buying and always have done in dim past, but not now, this is a new ballgame...
Now is the worst time to buy in a generation - you could not time it any worse if you carefully calculated it, but this fact seems insignificant to most. You'd better be damn sure your job is secure before being a FTB, especially if you are buying a newbuild!
When I first bought many moons ago the main aim was to save money as it was tight. Rent was high and mortgages were low - the market was ok and it made sense. Rent is now cheaper compared to buying, as that purchased house is a rapidly depreciating asset. Saving money does not seem to enter the game with FTB's and many look down their nose at renting, when this route could save them a bundle and offer a means to hold off until better times.
I suppose a silly way of highlighting points here is to use the car analogy
(??!):
Would you buy a new car if you knew you could buy it next month for £1,000 less? (point = it's depreciating)
Would you take a big loan to buy a new Ford Fiesta for £30,000? (point = it's overpriced)
Would you?? Of course you wouldn't - that's ridiculous!! but it's the same
principle as buying a house now (crude I know, but the same!).
Sorry to rant, but many FTB's are not treating house buying anywhere like as seriously as they should - it's probably going to be their biggest purchase in their life and they are the most financially exposed to downturns. It's their money and they can do what they like with it at the end of the day, but as this is a money saving site I feel obliged to rant today!
0
Comments
-
This is not a bashing excercise and I don't claim to know anything
different than any other forum member (actually less as I don't have a
financial background!) but if you'll excuse me I'd like a bit of a rant as
it's a Friday!
There are lots of new threads appearing from FTB's who seem to be
determined to buy, and buy now regardless of pretty much all evidence to
persuade them to the contrary. To be fair there are some who have listened
to the comments and either gone ahead anyway, or had a change of plan and either is fine, just as long as they are at least aware of the facts.
These facts are becoming clearer by the day about the way things are going
with the housing market/economy (and from many different respected sources) - FTB's will lose thousands of pounds a month and more than likely they will go into negative equity as well - a double whammy. :eek:
I would always recommend buying and always have done in dim past, but not
now, this is a new ballgame...
Now is the worst time to buy in a generation - you could not time it any
worse if you carefully calculated it, but this fact seems insignificant to
most. You'd better be damn sure your job is secure before being a FTB,
especially if you are buying a newbuild!
When I first bought many moons ago the main aim was to save money as it was tight. Rent was high and mortgages were low - the market was ok and it made sense. Rent is now cheaper compared to buying, as that purchased house is a rapidly depreciating asset. Saving money does not seem to enter the game with FTB's and many look down their nose at renting, when this route could save them a bundle and offer a means to hold off until better times.
I suppose a silly way of highlighting points here is to use the car analogy
(??!):
Would you buy a new car if you knew you could buy it next month for £1,000 less? (point = it's depreciating)
Would you take a big loan to buy a new Ford Fiesta for £30,000? (point =
it's overpriced)
Would you?? Of course you wouldn't - that's ridiculous!! but it's the same
principle as buying a house now (crude I know, but the same!).
Sorry to rant, but many FTB's are not treating house buying anywhere like
as seriously as they should - it's probably going to be their biggest
purchase in their life and they are the most financially exposed to
downturns. It's their money and they can do what they like with it at the
end of the day, but as this is a money saving site I feel obliged to rant
today!
If they pay the mortgage and don't lose it if it goes in to negative equity. When they have paid for it in 25 years (or sooner) time could you turn round and say you did the wrong thing! (belive it or not most people go through life never having there house reposesd, Also some areas are cheaper than renting)
You could say leave it a bit or try renting, but why should some on buying a house bother you? each to thier own.
What is the price of anything? What someone is prepared to pay for it!0 -
justpurchased wrote: »but why should some on buying a house bother you? each to there own.
it doesnt, but i just wanted to point out some things which seem to have passed some by on the board....
if someone wants to buy and they are aware of these things then fine.... some posts seem to have the wrong focus when buying recently...
buying now when it's the most expensive prolongs the mortgage, when you could wait and considerably reduce this...
plus, i just thought as we go off air tomorrow it would make a conversation!!
0 -
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justpurchased wrote: »If they pay the mortgage and don't lose it if it goes in to negative equity. When they have paid for it in 25 years (or sooner) time could you turn round and say you did the wrong thing! (belive it or not most people go through life never having there house reposesd)
You could say leave it a bit or try renting, but why should some on buying a house bother you? each to there own.
Exactly! When I bought my house just under 8 years ago, I didn't know whether I was buying at the top or bottom of the market - but I had been renting (lodging) for 2 years and just wanted my own place, and had been made permanent in my job. I did the right things (£20000 deposit on £80000 house and I think I was earning about £16000 a month). I needed somewhere to live and it had to be my own place. In retrospect I wish I had bought cheaper, 2 bed terrace rather than something built in the 70's and 3-beds, but there you are. I have a lovely home (yes, have paid plenty on redecoration etc, but that was a choice).
Rents around here are about £400 for disgusting places, and my mortgage payment is £100 a month (will be paid off next year).
Jen0 -
Jennifer_Jane wrote: »Exactly! When I bought my house just under 8 years ago, I didn't know whether I was buying at the top or bottom of the market - but I had been renting (lodging) for 2 years and just wanted my own place, and had been made permanent in my job. I did the right things (£20000 deposit on £80000 house and I think I was earning about £16000 a month). I needed somewhere to live and it had to be my own place. In retrospect I wish I had bought cheaper, 2 bed terrace rather than something built in the 70's and 3-beds, but there you are. I have a lovely home (yes, have paid plenty on redecoration etc, but that was a choice).
Rents around here are about £400 for disgusting places, and my mortgage payment is £100 a month (will be paid off next year).
Jen
true, but do you think now is the top or bottom if you had to guess ?0 -
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justpurchased wrote: »It is neither, and no one knows what they will be worth in 25 years time but it will be more than todays prices.
Do you think prices could go up further then?0 -
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justpurchased wrote: »I do in the future yes.
sorry I worded that badly, I meant in this cycle ...0 -
as a FTB it raises some interesting points some of which i hadnt considered.. However my philosphy as i presume some other FTB is (right or wrong) is to buy now and use the falling market to negotiate a hefty discount (of around 20% on the property i want.
On a house that was 180k if i can get it for 145k i figure it wouldnt fall below this in a reasonable area
As the current problem is driven by supply and demand i.e. no one being approved for mortages and those that are with smaller multipliers of salarys i figure 145k will be the bottom line esp on a property that came in at 200k in the boom.
I dont see how this could be a bad thing for a FTB0
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