I’ve bought a house: my worst ever financial decision

lvader

I have never bought a house as an investment, for me it's just a place to live. I couldn't care less if prices go up or down.

Procrastinator333

lvader wrote: »

I have never bought a house as an investment, for me it's just a place to live. I couldn't care less if prices go up or down.

I don't wish this to come across as rude, as that is not how this intended.

But I have never understood this view. If you bought a TV and then 2 weeks later it could be bought for 30% less. Or if you bought a car a week before the scrappage scheme started. Or going to a theme park, paying full price and then finding everyone else has used buy 1 get 1 free vouchers.

These are not the same thing as house prices, just simply to ask do you not care about getting value in other purchases in your life? If so, then why not the biggest purchase of them all?

This isn't a comment on the direction of house prices, just that I don't understand this view.

Yes there are plenty of other factors and yes they may be more important to some or most, but surely before making the biggest purchase of your life, you should form an opinion as to whether the price is going to rise or fall and factor that in to any buying decision?

Once you have purchased, then yeah sure it is too late and who cares. But until that purchase point I just don't understand how house price direction can't be a factor to consider.

phil_b_2

What a comical car-crash load of drivel...

lvader

Too many people see the value of their house go up and think they have gained real wealth, they have then borrowed against it and only now realise that they don't have wealth, just debt. Buying a house to me makes sense over renting because liveing costs aren't that much higher to start with and are much cheaper in the end, but at no point do I think that the equity in the house is like money in the bank. The only thing that concerns me is how much do I owe and how much does it cost to service the debt. Yes, I can see that the cost of the debt relates to how much equity you have, but that is the only circumstance in which I would care about house value going up or down.

Loopgames

Procrastinator333 wrote: »

I don't wish this to come across as rude, as that is not how this intended.

But I have never understood this view. If you bought a TV and then 2 weeks later it could be bought for 30% less. Or if you bought a car a week before the scrappage scheme started. Or going to a theme park, paying full price and then finding everyone else has used buy 1 get 1 free vouchers.

These are not the same thing as house prices, just simply to ask do you not care about getting value in other purchases in your life? If so, then why not the biggest purchase of them all?

This isn't a comment on the direction of house prices, just that I don't understand this view.

Yes there are plenty of other factors and yes they may be more important to some or most, but surely before making the biggest purchase of your life, you should form an opinion as to whether the price is going to rise or fall and factor that in to any buying decision?

Once you have purchased, then yeah sure it is too late and who cares. But until that purchase point I just don't understand how house price direction can't be a factor to consider.

But that was the point by lvader - as I understood - once you have bought your home then you have to deal with the decision if prices go down. It is irrelevant ...only until you sell. So why go through the agro of regret once you've bought it. There is no need to worry about something you have no control over.

But I definitely would take a long hard look at what I was buying before I bought it. And under no circumstance is a home an investment ever. An investment has a cashflow - which one hopes to be positive.

A home is a home. One doesn't buy it (in general) to make money from it.

The only exception I see is for those who actually have a financial strategy of buying a home, living in it, doing it up, then selling for a higher price to get onto the next rung on the ladder and so on until they have reached their objective of their dream home..once they have got to their goal they no longer view their home as an investment.

Procrastinator333

lvader wrote: »

Too many people see the value of their house go up and think they have gained real wealth, they have then borrowed against it and only now realise that they don't have wealth, just debt. Buying a house to me makes sense over renting because liveing costs aren't that much higher to start with and are much cheaper in the end, but at no point do I think that the equity in the house is like money in the bank. The only thing that concerns me is how much do I owe and how much does it cost to service the debt. Yes, I can see that the cost of the debt relates to how much equity you have, but that is the only circumstance in which I would care about house value going up or down.

Maybe I'm splitting hairs. I completely agree post purchase. But any ftb, or anyone thinking of trading up or down, should be very interested in the direction of house prices and should form an opinion on the subject.

Anyway, I think I'm being a bit pedantic here so just going to slink off quietly now.

Davesnave

I think it depends very much on the home. Some of us have spotted properties which it makes sense to buy almost regardless of the market. Not all will be brilliant investments, perhaps, but those that tick the boxes come up so rarely they need grabbing immediately. If you have hard to meet requirements, you'll know that's true. I can count those I really wanted on the fingers of one hand, and I looked for years.

Special properties should be pleasant places to be, but beyond that, they are often projects, so they can be 'special' with holes in the roof. If a property has enough potential, it could involve a 20 year plan of steady development, rather than some get-rich-quick scheme. It might also provide the basis for a business.

Looked at like that, it's possible to buy a place at, say, age 50, and plan to sell it on at around 70 to fund a further retirement project. Here, I'm not talking about your average semi, but something which might be bought after the kids have graduated etc. Of course some people come to these properties earlier in life than that, and I suspect MSW is one of those.

Knowing a couple of elderly people who inadvertently bought houses that became very valuable, I'd also say that one should still be prepared to abandon any financial plan based on a house and/or its land. My friends put so much of themselves into their properties, they couldn't bear to leave!

MrDT

lostinrates wrote: »

I'm somewhat with MSW in tht I think the market is very likely to dip again yet we're buying (and looked throughout the crunch and would have bought the right place at the right price at any time). In any market individual properties might present certain opportunities that are good.

I'm guessing MSW had decent amount to put into the property as a cushion, and she might already have benefited from a boost in what she can get for the money. It might simply be ''the one'' which is how DH feels about our house. Could we have held out for more for our money? Possibly,but it would be unlikely to have been THIS property at a lot less.

You pretty much saved me a post.

We're buying a place - the right place, at the right price. I expect prices to dip in the not too distant future, but I also expect interest rates to rise in the not too distant future. We're buying with a cheap mortgage fixed for 10 years, I doubt waiting for a cheaper price and ending up with a more expensive mortgage would benefit us one bit. Why wait once you've found the perfect place?

chucky

brit1234 wrote: »

You mean like hounslow :rotfl:

brit1234 wrote: »

I like the way you use figures tainted by foriegn investors and low transactions for greater London.

Things started changing a couple of months ago, prices started falling again now

Brit makes a comment that is totally delusional and not even true - what a surprise :eek:

brit1234

chucky wrote: »

Brit makes a comment that is totally delusional and not even true - what a surprise :eek:

A little checking and I reckon you are using land registry figures. Am I right.

Now as these are land registry figures there is a 2-3 month delay in the accuracy. On top of that your chart goes up to March and we are entering June in a couple of hours.

So you base you information with figures from December Early January to state your argument. I am however using info based on the last couple of months where the market has leveled off and started to fall rather than 5-6 months ago.

So when you say my comment is delusional or untrue please back it up with relevant data rather than outdated info when I even admit prices were rising.