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

meanmachine_2

Stewboy1978 wrote:

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.

That was 7K down the drain then.

Fixer-uppers are much more desirable now than refurbs.

Still, you live and learn.

poopscoop

meanmachine wrote:

That was 7K down the drain then.

Fixer-uppers are much more desirable now than refurbs.

Still, you live and learn.

How many fixer-uppers have you done my friend?

djohn2002uk

meanmachine wrote:

That was 7K down the drain then.

Fixer-uppers are much more desirable now than refurbs.

Still, you live and learn.

Well, that's good thinking. Strange then that most people want to move in and put their feet up and not have to do any decorating even.
A thread like this is always bound to attract the house buying doom and gloom merchants. 18 months ago they were posting on this sight like a plague, forecasting another big crash, trying to put everyone off buying. Then there has been a conspicuous silence from them for the last 12 months while the sensible majority have continued to enjoy the growth in their "unwise" investment.
As for the £7k, looks like another wise investment to me, but then the doom and gloom merchants wouldn't see that, they can't see past the blinkers.

meanmachine_2

Seeking low cost shelter affordable to all isn't doom mongering. Wherever did you get that idea?

Oh, and by the way, in my area, prices fell 8.5% in the last 6 months. So thanks for that advice but no thanks.

No wonder I'm accused of repeating myself. The real "doom mongers" on here come out with the same old stuff time and again.

Oh, and if one property went from 60K to 105K how much do you think a property originally valued at 105K went up by?

happenstance

Tiggs wrote:

Your assumption that house prices will inflate at just 2% is significant in your thinking, and IMO unlikley to be correct. You could just as easily find he has a house worth far more than your fund of money.

Your bigger assumption is that over the next 30 years you wont want a house of your own....no intention of getting married/family?

T

Don't get me wrong that isnt my 'life plan for the next 30 years' its just what im currently doing and I'm just looking into the unrealisitic sitation for if i continued to do it for 30 years.

As for the 2% its just a figure i made up, but really can see prices rising over the next few years with expected intrest rate increases and the current over inflated prices.

btw no itention of getting married or having a family.

happenstance

F_T_Buyer wrote:

It does kindof make sense, but as other have pointed out your life styles are very different.

Not buying now makes very good financial sense, as house prices are way way above their long term average, so any medium term price change is likely to be down, and renting is cheaper. Also... all the usual arguments blah blah...

Yeah true. Im just not ready to strech myself to get a mortgage on a property that i think is overinflated. All the rest and Id rather be earning intrest for a few years then re-evaluate my situation rather than paying intrest.

happenstance

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.

Thanks. Though one thing is that mortgage rate and saving rate is pretty much preditable unlike the housing rate growth. Still you deserve all the money you can get living in gloucester and with parents!

meanmachine_2

House prices, on average, have actually gone up 8% per annum.

But that's because wages have traditionally gone up by that amount (in line with much higher inflation).

The problem the doom mongers have (those who think crippling house prices are a good thing) is that wage inflation is now low and set to deflate in some industries, thanks to immigration.

Plus, you can only go from IRs of 14% to 3.5% once in a generation. You can't do it again.

So the doom mongers can ridicule the realists all they like, but the facts just don't stack up.

Having said that, sellers still don't get it, so asking prices are still crazy imo.

But good luck with your life plan. You sound pretty sensible.

happenstance

zag2me wrote:

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.

But you would have a lump sum that you could buy a house with. Not sure what you mean about life being so much more important?

grumbler wrote:

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.

Yeah it is pretty expensive, i think its about 5.85 or something like that as he doesnt want to be tied in for x years and he forks out for some rubbish loss of job and house insurance. Also it is on a repayment rather than intrest only. I dont actually live with him.

poopscoop

happenstance wrote:

Not sure what you mean about life being so much more important?

S/he is saying that enjoying life is more important than thinking about property all the time.