Buying a property - am I stupid not too?

Wickedkitten

sm9ai wrote:

In that case as I said "you need some better negotiation skills"

But if your moving soon then it doesn't really matter.

Seeing as how we were paying 350 for a 2 bedroom flat that is 2 minutes from the beach, I'd say negotiation skills aren't the problem, ta.

sm9ai

Sounds a good price.

Incidently I just did some good haggling with o2. I got the o2 - 100 contract knocked down from £25 a month to £10 a month. After threatening to cancel my contract. Then I pushed it too far and they cancelled my contract instead. Oh well, getting a better deal with T-Mobile anyway.

kroo345

Hi all,

Firstly, thanks again for all the responses!

1. I can completely unerstand where Kroo is coming from. There is a pressure to buy property. Im not saying its right, or that people should do it, but its definately there.

This realls sums my feeling up, it's not that I desperately want my own place, or want to live in a certain area, it's that as a 24 year old 2 years in to working and being offered mortgages I felt I should be buying a property, and that long term it was the right thing to do! This whole "getting on the property ladder" seems like such a big deal at the moment

There is alot of pressure out there - it seems like everyone and there dog is buying property to rent in the good areas, pushing prices up for first time buyers.

However my minds at rest now, I'll be happy saving for a while knowing that financially i'm not loosing out. That is, as long as I can stay at home . . .

And yes, I do pay board. I also pay to run a car and commute 2 hours a day - thats best part of £500 a month

Cheers

As for o2 - been with them for three years and threatened to leave, they reduced my contract to completely free! still inclusive minutes and txts! last year I negotiated on a phone they wanted £60 for at renewal time. I'd seen it for free with contract on some sites and began to read out the site name, got to "http:\\" and the sales guy gave up and gave me it for free.

Straight on ebay!

zag2me

I will add my thoughts.

1st of all save as much money as possible, I did a deal with my parents that I didnt pay rent, but I would pay all my money into an isa account until I could afford to move out. I managed to get 10,000 in about 3 years using this method and it suited everyone.

2nd move out as soon as you have the money, dont rent, some of my friends are doing this and have been moved on 3 times by buy to let landlords selling up. I spent 3 years scrimping and saving missing out on loads of stuff, and I cant bring back those years. Your only young once, and you cant put a price on freedom and owning your own place The girls love it too

in summary, save up money, move out!

F_T_Buyer

Well, I thought I would sign up to reply to your thread Kroo.

I'm in much the same position as you although i'm 25 and have saved a fair deposit. I agree, the pressure to get on the ladder is a joke. Even my grandma is telling me to buy, yet most of the people I know couldn't afford their own house at todays prices - yet they still expect me to be able to afford it.

If you are looking at buy to let have a look at ARLA:[http://digitalnation.fileburst.com/arla/arla_members_report_q12006.pdf]

"According to ARLA members’ offices, a rental return of between 4% and
5% is the norm for rented houses"

- you will very quickly find that the rent will probably not cover the mortgage costs.

Remeber to take into account any repairs, agent fees and voids when you can't let the property out! The only way BTL will make money at todays prices is for it to go up in value. BUt will prices go up in value? No one knows. Maybe you should look at how to value tech stocks and apply it to the stock market in 2000, or the dutch tulip boom.

The best advice you can do is stay at home, like me, and save. Save the equivalent of what a mortgage would be and put it buy. In a year or so time, ask this "shall I buy" question to yourself again.

But I do strongly think you should have a deposit before you buy, so you don't get shafted on high mortgage costs. Also, pay off your car loan and be debt free!!!

Oh, and when you do accumulate a deposit make sure it works hard for you - get a good savings account!

Just my 2p... I hope you make the right decision for yourself!

UK_Landlord_2

the decision to buy a house has to be more than monetary, as a landlord i should be encouraging you to rent, but i wont, there is nothing like the freedom of owning your own home, you can't relly put a value on that. definately save up a deposit before you buy a place of your own, but it is never dead money, rich people do not live in rented houses! and of the top 100 richest people in this country they nearly all made it in property!

meanmachine_2

UK_Landlord wrote:

but it is never dead money, rich people do not live in rented houses! and of the top 100 richest people in this country they nearly all made it in property!

Sorry, but I regard interest on a loan to the bank as "dead money". What else is it?

also, I thought most of the richest people in Britain actually did productive jobs, heading up companies that made things. Some of these products might not be very sexy - packaging is a big moneyspinner - but at least it's real. Buying up property, then selling it on to others doesn't help our GDP one iota.

Anyway, to the OP I'd say, like everyone else, make up your own mind. Listen to both sides (and remember there are vested interests on both), then do what feels right for you.

If you're saving money each month, then you're making progress regardless of what happens in the property market.

Oh, and be nice to your parents. I suspect they're subsiding you quite a bit. They won't mind provided they can see that you're saving money towards a house each month, and have a plan.

Parents love a long term plan.

UK_Landlord_2

of course it's not dead money, effectively you are borrowing the money at one rate and investing at another much higher rate! 25 years ago houses were about £3,500, so even if you paid 3 times the purchase price in interest you still have a whopping return as that property is now probably worth at least £250,000! and the same goes when buying property to rent out, i give you that right now there is nothing to be made on rent, but when property prices have doubled again you have a fat profit. and if you tell me they won't double again in future then you should be posting on https://www.forum_for_the_lunatic_brigade.com

Wickedkitten

did you mean to put a link to HPC there? :P

meanmachine_2

I think UK Landlord has been at the dizzy water.

Property goes up in line with wage inflation.

Currently that's at 2.8%.

If you think we're going to see a return to 10%+ wage inflation/ interest rates, bring it on! Can't wait! That'll crash the market in a heart beat.

Or is that not what you're saying? I'm confused...

Because low interest rates are only achievable with low wage inflation. In my line of work wages haven't actually gone up since the mid 90s.

so, erm, remind me again who's going to be buying these properties when they're twice as expensive?

Here's the thing: You can only go from 15% interest rates to 4% once. You can't do it again. WHere do you go from there? Once asset prices have altered accordingly all that's left to give them a lift is wage inflation.

Or am I missing something?