It pays to rent

neas

mircea wrote: »

LOL, you are assuming that you will read the market perfectly and time your purchase at the bottom - a lot of people with various economic degrees and paid millions per annum are unable to do that, but I will take your word that you can do it. If you can't, and house prices continue to drop after you buy or start rising before you buy then all this is just bulls**t speculation and at the end of the day, you are buying your house to have a home not to speculate.

Seriously i got to ask... Are you stupid? or just upset because you bought in the last couple years and are heading for neg equity?

I can't tell why you'd dispute clear logic.

OK let me expand the examples for your problem, after 4 years the HPC continued, Person A bought at 0 years (i.e high point), Person B bought after 2 years (not the real 'bottom') and Person C bought after 4 years (at the bottom)

Person A Owes 90k on a 60k property
Person B Owes 70k on a 60k property
Person C Owes 60k on a 60k property

Now... Which would I rather be? Person A buying right now for a new home as its 'a home not an investment', Person B who got it wrong or Person C who called just right?

Of course I'd want to be C, but I'd be happier being B than A right?

This House Price crash has over-inflated prices... to a point they aren't feasible.. they are overpriced and thats obvious as they are shooting down at the fastest rate ever.

Its not speculating, when you have factual evidence showing that in the last year houses have lost 15% of their values on average.... its just common sense!

Sure I might not be able to call the bottom but house prices won't just zoom back up 100% in a day... so either I don't call the bottom wrong and lose less than Person A (being Person or I get close to Person C. Doesn't particularly matter to me... its a no-brainer to not be Person A lumbered with alot of debt and misery.


We've heard all the 'a house is a home not an investment' argument before. When a house is the most expensive purchase in the world it pays to be prudent when purchasing it.. you don't want to cripple you ability and well being by being saddles with a larger mortgage than what the house is worth would you? This website is about saving money..... when houses are dropping at 1%+ a month equating to approx 1.5-2k drop EACH MONTH. This of all money-saving activities is the greatest thing you can do.

Just like to add that Im one of 'saving for a deposit' members... Been saving for over 8 months or so now +that really.... Heading close towards a 20-25% deposit on a 2-3bedroom house now... and I will keep saving to boost that up. While renting I pay less rent than I would mortgage, Idon't pay building insurance, don't have to repair any white goods/roof/building/plumbing etc, and most certainly don't have any worries about houses falling meaning I won't be able to re-fix the next year.

All in all I'd say im in a good position to buy in 2-3 years time.

Its very easy to just 'wait and see'.... about house prices... If historical data is anything to go by, we will have a period of flat house prices for a fair few years after the crash... because people will be sooo burned from this one they will fear putting cash into propery.

BTW, hope you own house is a home not investment strategy works... I can see your not angry or upset you bought.

I can't believe you can even counter-argue it ...

[Update... quick trawl through the boards]:

mircea wrote: »

Hi everyone
We have now finally received our mortgage offer - exactly 3 months and two weeks after applying, with loads of hassle and puerile questions from the underwriters.
The biggest surprise is the offer is not worth the paper it's written on. It states that we can have the mortgage but only if we pay two loans off, around 6k. The bank has had our accounts and all the financial information: they know we only have £1200 of savings so what is the point in sending us an offer we cannot possibly accept?
HBOS wasted three months for us and we are now without a reasonable mortgage in place. I fully anticipated the tightning of the credit availability, following the US model, hence we applied for the mortgage three months before our deal expired. Most of those deals are now not available anymore and we will have to pay an extra 1% for another remortgage. In the current market, I am also worried that my house will not be valued high enough to give us a 90% LTV, like we had with HBOS. It feels like HBOS have pushed us into a tight corner and would really like to put in a complaint. Do we have any grounds? And also can anybody help with a remortgage?Thank you.

So let me guess you've bought a house recently right? That explains everything... Its your decision to buy at near-peak... but don't package up a nonsense decision and try and justify it to others... you might actually cripple another person financially with your idiocy.

LillyJ

lostinrates wrote: »

But one can realistically appraise one's security of employment, income, rental price and house prices in the locality and make a decision as to affordabilty over longterm. Its happned that people who have been cautious in the last few year are now, regretfully safer than people who have been less so.

Friend of mine (a few years younger) is in last year of university studying medecine. He is funded by his parents, lucky thing, but also does a nights bar work a week for spending mony and over his hoildays does mad things he wants sponering for for half th time and works for the other half. I am constantly amazed by the number of people who do no work whatsoever, even two hours a week, for the whole time they are in education, whatever their courses. (not refering to Lilly's frind who I know nothing about, just a gneral point). Education is precious, and medicine vitaly important, literally, to us all, but I still think its a remarkably precious thing, even in its devalued contributory form:rolleyes: , its very discounted to the recipient and I think, not withstanding its faults, pretty undervalued by us.

Totally agree about working at university. I didn't understand people who didn't work. Funnily enough, my friend doing medicine and I both worked in a bar job together for a year, it was actually pretty good fun. Both she and I worked all the way through uni and although it can't possibly cover the costs (particularly for medicine which has lots of added costs and far fewer holidays), every little helps.

chucky

neas wrote: »

Seriously i got to ask... Are you stupid? or just upset because you bought in the last couple years and are heading for neg equity?

I can't tell why you'd dispute clear logic.

Neas anyone who thinks that renting isn't a good idea isn't someone that may have purchased in the last couple of years. it's a matter of opinion, nothing else. No need to personally insult someone else - !!!!!! on another thread was saying that it was only the "Bulls" that did this, you seem to be a "Bear". That totally throws another one of his arguments out of the window especially his continual 'classification' of posters on one side or another.

As for renting - it suits some people but not others. I have bought a few times recently, not because I've had to but because of the financial opportunity that vendors have provided me. so renting for my personal circumstances makes sense, for others no.

Currently I'm renting out my own two bed and renting a very large one bed flat as again it made sense to me - not just on the financial side but on my social, domestic and everything else that I need to worry about. to add not even due to financial dificulty as my current rent is £350 a week compared to £600 a week i get for my own flat. it gives me the flexibilty that i currently need.

neas wrote: »

So let me guess you've bought a house recently right? That explains everything... Its your decision to buy at near-peak... but don't package up a nonsense decision and try and justify it to others... you might actually cripple another person financially with your idiocy.

i would definately not discourage anyone from buying rather than making such a sweeping statement as you have made above - especially as i mentioned that there are opportunities out there.

buying is not only about having the cash or mortgage available but is also about timing and buying well. timing can be now or in a year - it's up to them and what makes sense for them not just you.

Cannon_Fodder

mircea wrote: »

Dream on...interest over 25 years will cost you 150k, at 4% per annum...

Would love to know where you can get a Fixed Rate 4% Mortgage over 25 years.

neas

chucky wrote: »

i would definately not discourage anyone from buying rather than making such a sweeping statement as you have made above - especially as i mentioned that there are opportunities out there.

buying is not only about having the cash or mortgage available but is also about timing and buying well. timing can be now or in a year - it's up to them and what makes sense for them not just you.

Thats exactly what I was saying... People should be allowed to read to do a little research i.e read a newspaper to decide whether or not to buy. heck this is what most would do during HPI..

Watch too many Property !!!!!! programs and buy a BTL as its a no-lose situation. Now its see too many credit crunch, recession ,house price crash newsfeeds (which are everywhere) and put off buying house for a certain time.

Thats all. Its when people try to pretend this crash/drop in prices isn't happening, deluding themselves is fine but preaching it like its truth is... damaging to others.

We agree i think you will find... You made your choice I made mine, let everyone make their choice.

Cannon_Fodder

mircea wrote: »

Dream on...Assuming the same house costs 150k to buy...

And how do you fund the repayment of capital? Makes your totals £300k v £180k. Brave to commit the extra in a crash.

Same old bulls pushing IO, forgetting you have to buy the thing - that's what got us in this mess...


There will be good and bad times to buy or rent.

This is a pretty good time to rent. Getting towards a better time to buy, but worth waiting a bit longer.