utterly disillusioned

[Deleted User]

georgy9 - I do have a bit of experience of web design, I funded my way though my masters with it. I did look into working full time in it until I found out that the pay did not compare with the skillset required. I do know that you could be earning more than 16K - I've been offered 'trainee' web design jobs which paid about 20k (this was to be working near Heathrow).

Why not train in a related field - if you can design sites, how about learning PHP/mysql or .net? If you can already design databases and program in a scripting language, why not look at firms that would use such skills.

gingin_2

whambamboo wrote:

No, it makes no sense at all. At the moment rents are very low relative to the mortgage, so the rent probably won't cover the cost of an interest-only mortgage. With an interest-only mortgage you don't pay off the house price, just interest on the debt (repayment mortgages are tax-inefficient). By all known measures, house prices are at historic highs, and advisers are predicting a fall in value.

Too right. Our novice Landlord has to add an extra £350 a month on top of our monthly rental just to cover the interest only repayments.

RHemmings

Tomthumb wrote:

Maybe I'm just looking through rose tinted glasses having gained on every house purchase, I'm very pro buying property and like my money in bricks and mortar.

Someone once said that financial genius is a short memory in a rising market. Property has been rising in price for over a decade. So there must be a lot of property developers who have never experienced anything other than rising prices. How long have you been in the game?

movieman

Our novice Landlord has to add an extra £350 a month on top of our monthly rental just to cover the interest only repayments.

And don't forget maintenance and voids.

However, this demonstrates one of the fundamental problems with the 'buy and rent it out' mindset: if your tenant can't afford to buy a flat of their own, how can they afford to pay enough rent to cover your mortgage? It only works if inflation is rapid enough to wipe out your debt before you go bust.

Tomthumb

I'm not really in 'the game', we bought a 2 bed terrace house in 1998 with a 100% mortgage for £28,000 to get out of a council flat - sold in 2001 for £45,000 - bought another 2 bed terrace in a nicer area for £59,000 - sold in 2003 for £117,000 - then bought this Hotel with my Mum in 2004 for £86,000 and are selling for £170,000

So we've not been on the ladder for long and we are not developers at all, although all of the houses we have bought have been grim and have needed work, we have made them into our homes.

whambamboo

Tomthumb wrote:

Maybe I'm just looking through rose tinted glasses having gained on every house purchase, I'm very pro buying property and like my money in bricks and mortar.

anyone buying Microsoft shares in 2000 having watched them since 1980 would have thought that too. How could you lose money on the world's biggest software company?

But they've been flat for six years.

http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c=

Nobody can predict the next five years with certainty. All you can do is look at as much evidence as possible to help the prediction.

Secondly, you have to look at risk. If you put money in the bank there is close to zero risk of losing it. If you buy a house there is a non-zero risk of (a) losing your job and getitng it repossessed because you can't afford the repayments (b) having prices go down substantially (c) being able to let it out etc.

So given investment A, putting money in the bank, with 5% yield and no risk or investment B with a higher risk and unknown yield.

Obviously as it's higher risk, you need a higher yield. Do you think the yield on property is high enough to justify the risk?

Or have, in fact, you got no idea whatsoever, and haven't looked at the numbers or calculated your return, but just have a feeling like the guy who bought Microsoft in 2000 after watching 20 years of amazing growth (far better than houses), that it's 'safe as houses', with nothing whatsoever to base your decision on other than past experience.

movieman

I'm not really in 'the game', we bought a 2 bed terrace house in 1998 with a 100% mortgage for £28,000 to get out of a council flat - sold in 2001 for £45,000 - bought another 2 bed terrace in a nicer area for £59,000 - sold in 2003 for £117,000 - then bought this Hotel with my Mum in 2004 for £86,000 and are selling for £170,000

And there you are: you've only owned houses while their prices were exploding over the last few years, and extrapolating that to the future. Those who were left in negative equity for a decade by the last crash probably don't have such 'rose-tinted glasses' about property.

SunnySusie

georgy9 wrote:

im in my late twenties and live in the south west. i earn £16k a year which is about average where i live. i work with computers and am good at my job. i cant find a house or flat for less than £120k. ive come to the conclusion ill never be able to afford anywhere.
is anyone else bitter about living in a day and age where people like me will never be able to afford to buy a home? whatever way i look at it, im destined to live in cr*ppy rented flats which ill never be able to call 'home'.
ive been employed all my life, ive paid tax all my life. great britain my !!!!. what a joke.

Hi!

Dont give up! It is perfectly possible for you to buy a house! First off, get saving! This site will tell you how to save every penny possible, clear those debts, etc. Stop wasting money on things you dont need!

When I was on 16k I still managed to save several hundreds every month, so I know its possible, dont give me excuses!! Its not easy, it requires sacrifice, but if you want your own property, thats what you have to do - since when was life ever easy? Find a cheaper rental property, move in with your parents, forget holidays, quit drinking, learn to entertain yourself, this was reality for our parents 30 years ago when apparently things were 'easy'.

People think it was easy for our parents but actually my folks didnt have any of the luxuries we have, all their money went on the house and kids, they understood duty and responsability, these days we think we have a right to go out and get drunk, or to buy an iPod, or to go to the costa del bling - get real - 99% of the world can do without these things - so can you!

Once you start saving, work on increasing your salary. Be ambitious in your career. Why do you think someone who sits still and doesnt work up the career ladder will ever be able to work up the property ladder? Again, get real, life is tough, dont whimper, get moving!

I was in you position, but luckily I had my lightbulb moment when I was twenty, and now by my late twenties I could afford to buy thanks to saving a big deposit! Most of my mates are still pssing away their money each weekend and wonder why they can afford to buy, rather than doing something about it, they just moan and complain .

I think thisFTB story sums things up. You can get on that first rung of the property ladder, just realise it will take a while, and it will actually require hard work!!

Tomthumb

movieman wrote:

And there you are: you've only owned houses while their prices were exploding over the last few years, and extrapolating that to the future. Those who were left in negative equity for a decade by the last crash probably don't have such 'rose-tinted glasses' about property.

It was still a gamble though, I didn't have a crystal ball and had no way of knowing whether prices were going to increase or not, we had no deposit, a six month old and a job in a supermarket - it was a major gamble! I'm not saying that house prices are still going to rise but I still think that it's good to have property and if rental rates cover the mortgage then it's worth looking into!

I am pretty out of touch on rental prices/mortgage rates etc.. is it now cheaper to rent than buy? It always used to be the other way around.

mrsS_2

When I bought my first place 20 years ago, my morgage was £210 per month, but to rent the same property (the flat upstairs in our victorian conversion) was £450 per month. There just wasnt that much rental property around.

However-we bought a grotty 1 bed flat in a really bad area because it was all we could afford.

I find peoples comments interesting about house prices and incomes though-I paid £42000 for the flat and was earning £4000 p a, the same flat is on the market for £115000 now, but i know that the same job would now pay me £20000- so flat has only risen 2.5 times against same starting salary I could get now of 5 times.

I belive that the reason house prices keep going up is to do with lending multiples: If you get a 3% payrise and can borrow 3 times income- doesnt this mean that you can keep up with a 9% increase in house prices?