“I’ve already made 12k in 2 years on my house, in 20 years time I’m going to be rich”

Tiggs_2

poopscoop wrote:

I know, I was poking fun.

i know

i thought there may be a danger others wouldnt realise and we would end up with all these 40 somethings living in their parents cupboards while stashing their loose change in a pot to buy the cheapest £2 million terrace they can find in 2035

libitina_2

Tiggs wrote:

but anyone doing that in recent years would have seen house prices rise faster than they could save....and while they may be high now, the assumption that they will not continue to grow long term beyond inflation is naive.


and most important of all......who wants to live with their folks!!! I moved out at 18 and bought the first house i could find! That was 14 years ago, i'd not be to happy today if i was still at parents house saving up my pennies!

finance is important, but so is life.

Imagine you are 18 all over again. Could you afford to buy the house now? The exact same one as you did then? I doubt it. You were lucky, you had timing on your side.

Tiggs_2

libitina wrote:

Imagine you are 18 all over again. Could you afford to buy the house now? The exact same one as you did then? I doubt it. You were lucky, you had timing on your side.

not at all....my dad had timing on his side when he bought his house in the 60's. when i bought mine i thought it was stupidly expensive (as he had thought when he bought his)

if i was buying today i would not buy the same house....and it may not happen at 18 - but my aim would be to buy as soon as possible and ensure i could afford the mortgage which i would fix for as long as possible if i was concerned.

i would not put off buying the second i could afford to.

zag2me

In 30 years time your rent would be many thousands of pounds a month due to inflation, you would have no-where to call home and your friend would have a fully paid mortgage. I know which one I would rather choose.

As someone else said, house prices are important, but life is much more important.

F_T_Buyer

tomstickland wrote:

The original post is about right - last year I've lived at home with my parents in a single room, paying £300 pcm for everything and saving around £900-£1000 per month.
I did the same sums, but I factored in a 4% house price growth rate and then years of saving a large deposit offered virtually nothing over buying and paying a mortgage at 4%.
ie: save at 4% ish, houses grow at 4% ish, mortgage rate is 4% ish.

Either way, I'd recommend continuing to live on the cheap for as long as possible so you can have 10s of thousands saved.

So your first property would be around £300k? I.e. £1k saved per month = £12k per year, so for £12k to be 4% of any house increase means the house would costs £300k (4% of £300k = £12k). Pull the other one.

Most FTBs can easily save more than HPI - but you forget wage inflation too!!! Which is roughtly equivalent to HPI! So any deposit would help you get further ahead (when living with parents/shared house).


Edit:
It's just the kind of irrational responses in this thread that encourage FTBs to over stretch and buy a house when it does not make sense! If prices were rising 20% a year, fine. But they are not!

meanmachine_2

Tiggs wrote:

not at all....my dad had timing on his side when he bought his house in the 60's. when i bought mine i thought it was stupidly expensive (as he had thought when he bought his)

Yes, you were lucky. You bought in 1993 at the end of a massive crash. You might not have known it at the time, but that's why you could have afforded to buy when you did.

Your 18 year old equivalent wouldn't be able to afford a cardboard box these days.

Now if you'd said you'd bought 18 years ago in 1989, at the peak of the last boom, I might have accepted your argument.

Tiggs_2

meanmachine wrote:

Your 18 year old equivalent wouldn't be able to afford a cardboard box these days.

no, but not far off. If i was buying now i may wait till i was 20/21 as i was earning more by then. but i would still buy a house, no question.

Stewboy1978

I bought 3 years ago for £60k, done £7k worth of work - Flat now valued at £105k due to condition plus the area. Far bigger gain than I could hope to have just saved.

Tiggs_2

that was brave then because 3 years ago you would have been told the same stuff about overpriced and "crash" on the way as is being said now.

grumbler

happenstance wrote:

... My friend pays about 10'000 a year on a mortgage of 140'000 that lasts 30 years.

Your friend has a very expensive mortgage: 7.15% APR. There are many below 5% available now.
With 5% mortgage your friend would be 'renting' a whole house for £140K*5%/12=£583p.m. If he rented out a room to you (for example) for £290p.m., two of you would have shared a house for £290 p.m. (plus bills and tax though) each. How many tenants do you share the house with now?

In this situation the main advantage of renting (as against buying) is flexibility. You can easily move anywhere without selling/buying and huge costs involved.