"Rent money is dead money"

Pobby

Frankly, if I was in the market for a home and assuming I had a deposit./ mortgage offer I would be loath to go into the market just now.

By way of being anecdotal, 2 friends of ours, coming up to 50, have bought their house which they were renting cheaply. OK, they were fed up with having to keep moving and who wouldn`t be but they have entered into what would appear to be a terrible deal. They had no deposit, well they borrowed on a loan the 10% and from what I can make out they have a fixed rate sub prime deal. Their mortgage is now over double the rent and they are struggling. Prior to that they had a reasonable life style.

PasturesNew

Mandark wrote: »

Why have so many people here responded to what was clearly a troll post?! Oh well...

Because we need to fill our time ... while prices are dropping.
So we can buy an affordable house at some future point
Of course.

PasturesNew

Re the 25-year-span comparisons from above:

In 2001 I was earning £50,000, average house price was £112,800
In 1976 I was earning £1,500, average house price was £12,700

Comparatively, in which year was a house more affordable?

You can't just compare the black/white figures.

Have you SEEN the inflation in the 1970s? (hint: it was in the .xls link in my previous posting).

1979 29.3%
1980 21.2%
1988 25.6%
1989 21.0%

You can't take one figure in isolation and compare it 25 years later.

mr.broderick

carolt wrote: »

My finances are pretty typical, which is why I think the strength of my posts here is not any specialist knowledge I may have - I have absolutely none - but my situation as a bellweather for the housing market as a whole.

Our income is approx double the UK national average, and we are looking to buy somewhere approx 1.5 times the UK average.

Therefore, if we find it unaffordable, then for the average it is clearly unaffordable.

My example simply goes to show, as Pobby points out, what a lunatic state house prices had reached in 2007, and how far, realistically, they need to fall.

16% per annum, as agreed by both the main indices, is a nice start - another year or 2 of that and house prices should be affordable comfortably by me. But may still fall further, as they will still be above historic averages.

When will I buy?

I'll be sure to let you all know when I do.

So your 1st time buyer home will be £225,000? Here is where the problem is, first time buyers setting their sights too high

mr.broderick

carolt wrote: »

A great point, well made.

Can't be said enough. I, for one, am not against buying a house. I don't actually know of a single poster on here who'd advocate renting for all time versus buying at some point. But the key is 'at some point'. Buying at the top of the market is blatantly stupid, whatever you're buying - even more so as it's something you usually do with borrowed money, so have to factor in all the extra costs of paying back the debt too.

No - buying a house is a great idea, but at an easily affordable price. Which just means now is (probably) not the best time for most non-owners at present.

Yeah you missed the boat and have had to rent for a number of years untill they fall to your affordable level, it shouldn't be long carol.

PasturesNew

I want to buy so I don't get moved on. Imagine if you're 60 and moving, 65, 70, 75, 80, 85 ... once you're over about 45-55 it's just nice to kick back and not think about moving until you're shovelled into a ga-ga ward.

Buying is the only way you can have that feeling of being in control of the roof over your head. I don't want a palace, just security.

Dithering_Dad

I've just paid off the Interest Only part of my mortgage. Bit off topic I know, but I'm just so damned pleased about it

When I bought my first home for £38k (hmnn, if I had stayed there, I'd nowbe mortgage free!), I got an interest only mortgage and an endowment (yes, I know, I know ). When I bought my new house I continued with the endowment and put the remainder of the mortgage on repayment. I then started receiving "shortfall" notices about my endowment and started to worry.

Well, worry no longer because I have paid off the Interest Only mortgage 13 years earlier than my endowment would have!! Yay!!!

Numenor

Hope you checked the small print - my folks had a clause in their endowment policy stating it would only pay out if there was a mortgage outstanding for it to pay off.

Dithering_Dad

Numenor wrote: »

Hope you checked the small print - my folks had a clause in their endowment policy stating it would only pay out if there was a mortgage outstanding for it to pay off.

I cashed it in at the start of my Mortgage Free in Three quest for £10700 and placed it straight onto my Interest Only mortgage. Such a huge reduction had the twin benefits of increasing my monthly mortgage capital repayments* and giving me an incentive to continue overpaying to further reduce my mortgage balance. There were no redemption charges on cashing in my endowment.

* my mortgage was reduced by £10,700 but I kept my monthly mortgage payments at the same level. This meant that my interest payments reduced and my capital payments increased.

Numenor

Excellent job, sir. Wish I could make such a dent in my outstanding capital, but my £200 a month overpayment will have to suffice for now.