Am i losing money by not buying?

poppysarah

Set the minimum you want for your money and when you find something you really like that meets all your tick boxes within budget, buy it.

GDB2222

Geenie wrote: »

The investors and BTLers are waiting as well.

You mean that they are waiting to sell? Well, they'd be selling now, but there are no buyers.

Procrastinator333

If it were me I wouldn't buy now.

Don't forget that the £700 you pay each month is offset by the money you make on your cash. E.g. If you buy a house you no longer receive the interest. Assuming you are getting 2%, that is about £5k. So the actual cost of renting is more like £3.4k a year. Not a lot compared to the rate of falls in house prices.

No expert, but one thing I would do if I had that much cash is get a good portion (if not all) inflation linked somehow.

I don't know what products are out there, but quick google and:

http://www.nsandi.com/products/ilsc/rates.jsp

natman

Ok heres a couple of thougts -
the 240k savings you have - only looking at a savings account offering 3% would provide you with a annual interest of around £5760, whch is £480 a month.
If you take this in to account your rent would be approx - £270 a month.

So i would decided on this - just from a purely financial point of view:

buy a house for 175k
have 65 k left( it would be less due to house fees etc, but lets stick with your figures)
65k would make you - £1560 interest a year ( or £130 a month)

No mortgage payments.

To be honest I have just bought a house on teh day the country went into recession. There are bargains out there for a buyer. My opinion is......Houses cannot go so much further there has to be a floor, where that is who knows.

I have bought my house with the intention of staying a while and not as an investment. I borrowed about 35% of what the house was valued at, so My circumstances it was the right thing for me.
Perhaps ask, what is the reason for buying a house..........
With 240k in the bank you have lots of options, just see it as neither one is wrong, its whats suits you best.

Personally -
I would buy a house for 220k, and get it down to 180k if i could
Save the money i had left in - Bradford and Bingley esavings 7 which pays monthly at 3%
ride out some drops in prices for a bit and then start looking happy when I made that decision in a couple of years time.

Keep us posted!!!

poppy_f1

if your going to be a cash buyer look and see whats on the market now, you are in no hurry to move so can wait until you see something you really really want to buy

mewbie_2

Ride out drops, ride out loss of equity. I love these statements. Why would anyone buy something that is likely to drop in value by tens of thousands of pounds?

10% on 200k equals 20,000 pounds.

That's a lot of rent money.

My personal forecast fwiw is another 30%, five years to the bottom.

30% on 200k = 60,000. Money in the bank.

besonders1

Houses seem to be going down faster then the average rents per year. Plus rent will be getting cheaper as more sellers turn to the rental market to try to stem the amount of cash thy are losing.

GDB2222

I suppose that there is anxiety that house prices will suddenly take off again. If past housing slumps are anything to go by, we have years of further declines ahead of us. But besides that, house prices are hardly cheap at the moment, at an average of 4.5 times average earnings, compared to a long-term multiple of 3 to 3.5 times.

jules9

WOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Thank you so much for all your thoughts and opinions.
Yep, i realise that the ultimate decision will be mine, howver the words of wisdom and hekp are so much appreciated. Living alone you dont always get the chance to mull over things with others as much as you would like.
Thats why this forum is so helpful :beer:

I hadnt even considered the interest that im getting,albeit i do fit into the higher tax area so not making full interest tax free.

The problem i have is that i live in Brighton (really wouldnt want to live anywhere else) and prices here are still expensive albeit down a bit.
A one bedroom flat is around £150-£180k and two bedroom area anything from £160-£200k....so still expensive.

Every estate agent i meet says there are more buyers around than sellers and that properties are being snapped up if they are priced well. (Guess they would say that).

Going to keep an eye on what is up for sale but really do believe that unless i see a real gem, i might sit on my hands for a while and keep the dosh.

Keep you posted :easter: