I just dont know what to do anymore

sarahripper

macaque wrote: »

Of course its better to be renting. Properties are a massive financial liability at the moment. If you had bought in November you would have lost £2000 last month and £2500 in December. Over the next 2 years, you could lose a further £50,000.

But surely thats only relevant if you are planning to sell it again in the next few years - we are looking at somewhere where we wouldnt have to move from if we had kids etc ???

macaque_2

sarahripper wrote: »

But surely thats only relevant if you are planning to sell it again in the next few years - we are looking at somewhere where we wouldnt have to move from if we had kids etc ???

Whether you plan to stay or not has no bearing on the decision. At a time when house prices are falling rapidly (which they are) it makes no sense to saddle yourself with negative equity. If you wait a bit, you will have less debt burden (or a better house for the same debt).

Lotus-eater

sarahripper wrote: »

But surely thats only relevant if you are planning to sell it again in the next few years - we are looking at somewhere where we wouldnt have to move from if we had kids etc ???

Do I pick up the tones of, we are aiming a bit high here? In the need to have a house that is bigger than the average FTB, in the need to have an expensive house to rent and in the need to not want to just rent a room in a house for the two of you? What area are you in?

Also, rent is only as much wasted money as the interest you pay to a bank on your mortgage.

Wickedkitten

sarahripper wrote: »

So you think it is better to waste money renting loosing in effect £800-£850 a month on rent than to try and buy a house with mortgage payments of around £550-£600?

The whole 'wasted money' mythos revolves around the concept of being able to build equity in a house that you wouldn't be able to do if you are renting.

Right now considering the fact that the market is falling, if you went out and bought a house today, unless you have a deposit of 15% or more and got a hell of a deal, you will probably lose same amount of money in the first 3 months of home ownership than you would "lose" if you rented a house for a year at £800 which would already leave you in negative equity with the prices still falling.

happywarmgun

sarahripper wrote: »

So you think it is better to waste money renting loosing in effect £800-£850 a month on rent than to try and buy a house with mortgage payments of around £550-£600?

At danger of repeating others....

Yes.

Rent is money 'lost'. But so is the interest element of any mortgage payment. The only money that isn't 'wasted' in paying a mortgage is that which chips away at the loan itself (i.e. the money above the interest payment). And even then - this is only true if the house is appreciating in value. Otherwise it is like paying money into a bank account which has negative interest.

Like comedy, it is all about timing. However, for most places in the UK you are better off renting still. We are getting nearer to the time when this is not the case (and renting becomes dead money madness again) - but I'm guessing that wont be for another 18 months.


I have put my own money where my mouth is by jumping off the housing ladder in April 2007 and renting since then. I put up with a good 8 months of aghast freinds telling me I was barmy, but it is interesting to see more and more people 'get it'.

There are variables obviously - such as how discounted a property is compared to the market mean - and the local variances in both rent going rates, and how far mean property prices will fall in a given area - but by and large I DO think it is better to 'waste' (your word) money renting at the moment.

puddy

macaque wrote: »

Of course its better to be renting. Properties are a massive financial liability at the moment. If you had bought in November you would have lost £2000 last month and £2500 in December. Over the next 2 years, you could lose a further £50,000.

surely that depends on lots of factors, where the property is, how much the person bought it for in november, how much their mortgage was for,, you cant make blanket statements like that

macaque_2

jenner wrote: »

surely that depends on lots of factors, where the property is, how much the person bought it for in november, how much their mortgage was for,, you cant make blanket statements like that

The type of bear market we are in will be relentless and will take no prisoners. The good will get hammered along with the bad. You will not believe how cheap properties will get before this process has played itself out. Added to this, there will be very little bounce when the correction is over. Governments around the world will make sure of this.

Wickedkitten

jenner wrote: »

surely that depends on lots of factors, where the property is, how much the person bought it for in november, how much their mortgage was for,, you cant make blanket statements like that

It basically just comes down to 1 thing imo. Are you buying a house as a moneymaker or are you buying it as a home.

If you are buying it as a moneymaker and are fussing about how much 'equity' you have in it, then you are sooo much better off waiting until you think that the bottom is coming and then go for it.


However, if you are buying it as a home, then if you see a house that you want that will do you for at least the medium term and you can afford it without taking out the maximum that you can borrow with a big deposit, then why the hell not really?

macaque_2

Wickedkitten wrote: »

It basically just comes down to 1 thing imo. Are you buying a house as a moneymaker or are you buying it as a home.

If you are buying it as a moneymaker and are fussing about how much 'equity' you have in it, then you are sooo much better off waiting until you think that the bottom is coming and then go for it.


However, if you are buying it as a home, then if you see a house that you want that will do you for at least the medium term and you can afford it without taking out the maximum that you can borrow with a big deposit, then why the hell not really?

I would agree with this but with one caveat. Thirty years ago starter homes often had 1000 square feet or more. Many couples bought a place and never moved again.

Today many first time buyers homes are less than 500 square feet. This is just too small for a growing family. If I was a FTB in this position, I would be inclined to wait and leap frog the bottom end of the market in a year or twos time. Moving homes is difficult (and expensive) at the best of times. The cost of moving home combined with the problems that come with negative equity is something you just don't need.

Wickedkitten

macaque wrote: »

I would agree with this but with one caveat. Thirty years ago starter homes often had 1000 square feet or more. Many couples bought a place and never moved again.

Today many first time buyers homes are less than 500 square feet. This is just too small for a growing family. If I was a FTB in this position, I would be inclined to wait and leap frog the bottom end of the market in a year or twos time. Moving homes is difficult (and expensive) at the best of times. The cost of moving home combined with the problems that come with negative equity is something you just don't need.

I agree 100%. It doesn't help that most new builds are the most expensive yet tiniest houses that you can end up with, but those are the ones that developers tend to help the most with.