Deja Vu?

doire_2

ILW wrote: »

Yes, all them cleaners claiming to earn £75,000 on their self cert forms.

:rotfl::rotfl::rotfl:

the_ash_and_the_oak

silvercar wrote: »

There is two points in response to that.

Firstly not everyone is in a position or wants to live in a smaller property while they wait for their opportune moment to buy. Fine if you are on your own or a couple, but not if you want to house a growing family in sufficient space or have elderlies to accommodate.

Second is that the mortgage rate you could get now will be higher than the deal you could have got a few years ago, even with a larger deposit. In 2006 I got a lifetime tracker at BOE base + 0.75%, so my mortgage payments have been much lower than even a smaller properties rent would have been.

While you have been saving to increase your deposit, I have been overpaying the mortgage. Whether my reduction in mortgage equals the reduction in house prices is an increasing calculation, one that will vary from area to area. You would also need to factor in that I have been living in the property I want for the last few years, something that is difficult to put a financial value to.

Point 1. agree w this – it’s a bit of a red herring to say “I’m saving by renting in a smaller property” when a big chunk of that actual saving is simply living in a smaller property rather than anything to do with renting or buying. But by same token in many places (certainly London) its cheaper to rent the same kind of property than it is to borrow so I’m not feeling any compromises really need to be made while renting

Point 2. agree here also. If prices were to fall x% amount it won’t make them any cheaper to buy (at the outset at least) because the money would get more expensive or difficult to borrow.

The 3rd point is kind of an odd one. I think this holds if you have a scenario where someone is renting on the cheap instead of buying dream home, but otherwise less so. The more you move into “get onto the ladder at all costs” scenarios the less I think this really makes sense. Eg I live with a v close friend in a 3 bed terrace, jointly using the 3rd bedroom as a studio and its cheaper than the interest on a 1bed flat where I’d have a lot less space would be – and its certainly cheaper than getting a mortgage on this place would be (plus the fact it would be about 6 times out combined salaries!) – its not that easy to put a financial value on that either imo.

I think its more than valid to suggest living in a place you like is something you can’t put a price on – but to me this argument is about living rather than buying or renting specifically – (ironically one of the things that weirded me out about the “you’ll miss the boat” years, people moving out of perfectly nice rented places to buy dingy flats)

neas

Thing is about my situation... as house prices have stagnated dropped and rose a bit etc... i've been able to raise my deposit.. and thus raise the quality of house i can get for my money. Moving house is an expensive business, and i can now start thinking about a 160-170k property which is in a good area, near good schools and has all the good mod-cons.

Whereas a year ago or even 2 years ago... my deposit and wage were less so I could only go for a 130k property. so If i had gone for said property i'd prob be depressed now as it would've A. lost 5k in equity.... B. not really been the house id' wanted but i'd have been pressured because i'd be... 'missing the boat'...

Im talking about sensible borrowing here (3-3.5x salary etc)....

So for my circumstances I'd rather get a house i love than a house i dislike just because house prices were rising. IFSWIM.

But i do find it funny even for this area... reasonable family houses are way out of the threshold for normal wages... what most people are doing is buying 3-4 bedroom properties near town and just lodger letting them.. including the dining room etc... so they can live rent free and have a house at end of it.... works but only if you single i guess.

the_ash_and_the_oak

neas wrote: »

A. lost 5k in equity.... B. not really been the house id' wanted but i'd have been pressured because i'd be... 'missing the boat'....

feeling your point about B here for sure

chucky

the_ash_and_the_oak wrote: »

feeling your point about B here for sure

and neas has forgotten to mention the rent he has paid could have been used to repay capital back on his mortgage.

most of his other points are good though

the_ash_and_the_oak

chucky wrote: »

and neas has forgotten to mention the rent he has paid could have been used to repay capital back on his mortgage.

most of his other points are good though

I thought he said his rent was less than the interest on mortgage?

neas

It is.

On a 110k mortgage the interest on a fixed rate 5 years (I wouldnt do anythin less atm as the unpredicatability is gonna cause rates to rise at some point in next 5 years and being on a tracker +2.75% or SVR is looking a bad choice)

Diverged a bit but just check it out.... i believe first direct do a 3 year mortgage 75% LTV mortgage rate of 4.54% which per annum on 110k is £415 a month interest.

So i am paying 35 quid more in rent than i could pay with a fixed rate mortgage (but its only a 3 year fix and I want a 5 year fix to be honest)... which pushes the rate up to around 5.39% at least.

When you factor in building insurance and the 5 year fix conundrum.. renting is cheaper for me. That and currently where i rent is next door to my work so there are other savings made... as opposed to when we buy we will move up to 6-9 miles away... meaning we will need a 2nd car again.

Loads of things that influence it.. lets just say renting was and is cheaper than the associated costs for myself personally. Im in 'save' mode and its working

neas

And i didnt have a large enough deposit to make the 'plunge' for a house i love... when interest rates were low... only now is my deposit getting large enough to try for it... but even then im still going to wait another 2-3 months to see how the market goes... then evaluate it then.. (and hiopefully with a bit bigger deposit).

the_ash_and_the_oak

I guess the bigger the deposit the better the rates you are able to access?

chucky

the_ash_and_the_oak wrote: »

I guess the bigger the deposit the better the rates you are able to access?

that is a good point - if you can down to the 60% LTV it is worth saving to get to the better rates.

if you can't get below the 75% LTV in a short period of time you may as well bite the bullet before you miss out comepletey imo.