July house purchase lending up on a year ago for first time in over two years

carolt

IveSeenTheLight wrote: »

The similar rent for the last 10 years you advise could point to the fact that the landlords are happy with the rental yield and covers their mortgage payments. You could have benefited from the LL fixing his mortgage payments.

Either that or rent was extortionate 10 years ago as we have already shown that wages have gone up in the last 10 years meaning that in effect disposable income for renters has increased as less percentage is paid out in rent.

You ask "If I don't need to take that risk, why do it?", well its a personal choice.
The properties you used in your example have had at least 10 years of tenants paying the mortgage, meaning there is potentially only 15 years left.
Wouldn't it be nice to think that you only have 15 years of rent / mortgage left to pay?
Fast forward 15 years and your now rent / mortgage free and only in your early 50's.
Wouldn't that be a nice thought?

For lots of that period, I wouldn't have qualified for a mortgage (well, not withot lying..but I don't regret not lying-to-buy :rolleyes:) - but I could rent. And yes, I totally agree that had we bought back in say 2004, we would have less mortgage to pay.

But we didn't. So I'm not really looking at changing the past, I'm looking at the best path for the future, using today's mortgage requirements and rates, and looking at current property prices.

As I've said elsewhere, I'm not looking to buy this year anyway, so it would have to be a particularly good deal to tempt me, as it would extremely inconvenient in every other way. Obviously, others may be in a different position to me, with different criteria.

carolt

Graham_Devon wrote: »

I'm looking at it as a damn good deal tbh.

Over 10 years, whats the probability of base rates hitting 5%? Pretty high I would personally guess. Even in 3-5 years, it's a pretty high probability. 5.89% for the mortgage seems quite good.

It's all a gamble, but this is a gamble I'd personally be willing to take, and it's added a new dimension for me.

Well that's good for you.

I don't want to move now, but if I did, I don't think I'd be leaping up and down at the thought of 5.89%.

If you argue that rates are going to go through the roof, then you also point, logically, to house prices coming back down to meet them. I don't expect overall affordability to worsen significantly until such point as debt has been paid down (national as well as personal) and the economy has recovered sufficiently.

Whilst no-one knows how long that's going to be, I'm happy to gamble the kind of mortgage payments I'm likely to end up are hardly likely to shoot up in the next couple of years.

But it's your call.

IveSeenTheLight

carolt wrote: »

For lots of that period, I wouldn't have qualified for a mortgage (well, not withot lying..but I don't regret not lying-to-buy :rolleyes:) - but I could rent. And yes, I totally agree that had we bought back in say 2004, we would have less mortgage to pay.

But we didn't. So I'm not really looking at changing the past, I'm looking at the best path for the future, using today's mortgage requirements and rates, and looking at current property prices.

As I've said elsewhere, I'm not looking to buy this year anyway, so it would have to be a particularly good deal to tempt me, as it would extremely inconvenient in every other way. Obviously, others may be in a different position to me, with different criteria.

CarolT,

Please note, I am not making this a personal issue, we have discussed this before and accept each have different circumstances and reasons.

I used the property you started out in and the similar rent as a way of linking the likelyhood that the mortgage payments were covered by that rent over that period.

For that specific property, whoever owns it is at least 10 years down the road of owning outright and would have at most 15 years left to pay.

I can't recall when you were in a position to buy, but its a few years down the road and only you will know if properties in your local area that you are interested in have dropped in price substantially enough to cover those years rent.

Lets suppose you wait another 2 years until the time is right, you are probably at least 5 years down of when you could have bought and you will probably find that mortgage products are not available at the same deal now, let alone what you were offered in 2006.

Neither of us know for sure where prices will be in 2 years time either. Many are now predicting stagnation for the next year or so, then what?

Will the credit issue be resolved by then in terms of lending? Possibly, there are certain stats that are showing that there is more lending returning.

There really is no point in refferring to a previous time in history (in relation to what a mortgage will cost you), it's only important to look at the current and the future

Graham_Devon

carolt wrote: »

Well that's good for you.

I don't want to move now, but if I did, I don't think I'd be leaping up and down at the thought of 5.89%.

Think that's the key.

Course it's not going to suit everyone, I was just looking at the deal overall, for someone wanting to buy a home. Seems a very good deal to me.

When you start talking about future price falls, then yes, I agree, the deal may not be quite as good.

IveSeenTheLight

Graham_Devon wrote: »

I'm looking at it as a damn good deal tbh.

Over 10 years, whats the probability of base rates hitting 5%? Pretty high I would personally guess. Even in 3-5 years, it's a pretty high probability. 5.89% for the mortgage seems quite good.

It's all a gamble, but this is a gamble I'd personally be willing to take, and it's added a new dimension for me.

It is a gamble, but where do you think these banking institutions think the rates will be at over the 10 years?

Harry_Powell

carolt wrote: »

No, I don't want a 15% fix either! :eek:

Checked out your supposed 10 year fix 'from 5.49%'.

Yes if you've got 40% stashed away. But let's face it, not many FTB's have - I certainly don't.

More realistically, you're looking at 5.89% for 25% (still a big ask for most FTB's) or 6.59% for 10%.

Still both a lot higher than I was offered in 2006.

At those rates, the cost of renting is still sufficiently cheaper than buying to prevent me feeling there's any great advanatage to buying now.

As I said before, if all you're basing your decision to buy on is the cost comparison between renting and buying, then surely it's a no brainer - you should always rent?

Out of interest, how much deposit do you have stashed away, percentage wise? If you do stay in rented accomodation for life, would it not be better to invest this money than have it in cash savings (if you do have it in cash savings) in order to maximise the resturn on your savings?

b0rker

We are only 2 years into our mortgage and we are already paying less per month on the mortgage than we would be paying if we were renting the same property.

We have had the equivalent of a £20K deposit on a £105K home.

We are now paying £450 a month on the 4.78% SVR on £84K.

Toying with the idea of a lifetime tracker at 2.99% above BoE base rate which would see us with a repayment of £340 per month (£140 up front and £999 added) but obviously that is a bit of a gamble as to whether IRs will stay as low as they are now for a few years as some are predicting.

Or possibly play it safe an go on a 5 year fix at 5.99% with a monthly repayment of £480.

Either way we are still paying less than the £500 a month it would cost us to rent the same home.

andrinaperry

I think there is a definate argueent for going back to the 80's scheme of 2.5 joint income as a max perhaps people would not get into such difficulties.

Dan:_4

andrinaperry wrote: »

I think there is a definate argueent for going back to the 80's scheme of 2.5 joint income as a max perhaps people would not get into such difficulties.

In the 80s my brother got 5 x joint income.

IveSeenTheLight

b0rker wrote: »

Either way we are still paying less than the £500 a month it would cost us to rent the same home.

Presumably also your figures are capital and interest payments, therefore much more than just the interest part of the mortgage which is what is comparable to rent