utterly disillusioned

meanmachine_2

mishkanorman wrote:

I think previous comments about tightening belts and job promotion are incredibly helpful, positive things to say. Its a shame they were shot down

No, the advice was "to stop moaning" and "to earn more money".

I'm STILL waiting for a certain poster to repeat this advice on the debtfree site, the loans site, the mortgage free wannabe site, and all the rest.

In fact, why bother haggling for anything, or trying to get the best rate? Just stop moaning and earn more.

It's simple.

RHemmings

meanmachine wrote:

No, the advice was "to stop moaning" and "to earn more money".

I'm STILL waiting for a certain poster to repeat this advice on the debtfree site, the loans site, the mortgage free wannabe site, and all the rest.

In fact, why bother haggling for anything, or trying to get the best rate? Just stop moaning and earn more.

It's simple.

I see this advice to "earn more" or "lower your expectations" all the time. Generally by people who have no idea exactly how unaffordable property has become, or precisely what compromises are necessary for regular people on regular salaries. When you live in an area where average properties are 10x average salaries, it's isn't just a matter of saving 20p a day by not eating a few mints so that you can afford a big house.

gallygirl

thelawnet wrote:

I was talking to my friend who bought in London in 1989 and sold at a 25% loss in 1992. Some of his neighbours just walked out and handed the keys back to the bank. It certainly did matter when you bought.

Surely it matters more when you sell?????? If those same people had been able to hang on till 2000 and then sold it would have been a different picture. (Note I said able to hang on - I realise that sitting out negative equity in a house is a damn sight harder to do than a drop in share value. Can't help thinking though that if people who had been in 'for a killing' hadn't panicked and sold maybe the crash wouldn't have been so bad????)

BTW - has anyone discussed the impact of the cancellation of tax credits for dividends on pensions? And lower return on pensions overall which makes BTL more attractive?

FTB feel hard done by that they can't afford to buy - mid 40's feel hard done by that our parents could afford early retirement but we'll have to work for ever and ever to get a decent pension...... maybe if more effort was put into resolving this there would be less demand for BTL's???

thelawnet

ali007 wrote:

Surely it matters more when you sell?????? If those same people had been able to hang on till 2000 and then sold it would have been a different picture.

That's not really the case. It means that you're stuck with what you bought for 10 years. A buyer with say £200,000 to spend in the South East would have got a nice enough house six years ago, but now might be stuck in something smaller and forced to pay off the mortgage, even thought the same thing might be selling for say £120,000.

It makes a huge difference.

If my timing is wrong, for my money I get a fairly modest house in a nice area, or a nicer house in a not so ncie area. If my timing is right, I could get a large house with plenty of land in a nice area. I would prefer that.

thelawnet

thelawnet wrote:

Sure, if you want to tell me there's never a wrong time to buy, that's great, but it's absolutely 100% clear that there is a potential for prices to fall, just as there was a potential for .com shares to drop. I'm paying £13k a year in rent, so if there's even a 10% chance of prices dropping 20%, it becomes good value.

Actually this is misleading. If I borrowed £510k, I would pay about £25k a year in interest alone. So if there is zero capital growth, the numbers look like this for me buying a £600,000 house

House £600k
Deposit £90,000
Mortgage (85% LTV), £510,000
Stamp duty £20,000
Other fees, about £4,000

Total costs: £624,000

Repayment mortgage at 5.25% over 25 years
Monthly repayment: £3056.16
After 3 years, assuming zero capital growth, the equity would be £90k + £32,087 = £122,087.
Assumign I had instead left that £114k in a much less risky investment, namely, a bank account paying 5.25% with 40% tax to take off, so equivalent to 3.15% net, then with £1100 that I currently spend on rent, I would have £1956.16 extra every month to add to my savings account compared with spending £3056.16/month on a mortgage.

According to my calculations, after 3 years I would have £221,500 in my account, even taking into account low-risk savings with 40% tax taken off. So I would be £100,000 better off after 3 years.

Can someone tell me, how it could possibly be a good idea to buy the house, when I would need £100,000 in house price increases to put me better off, something that seems fairly improbable: much more likely is a £100,000 decrease over the same period.

So, in fact, I'm saving potentially £100k+ over 3 years by staying in my rented accommodation.

I think I will use my £100,000 savings to buy a yacht. Or perhaps I could spend the next 3 years on a cruise. I think £100,000 should cover the cost.

mishkanorman

Meanmachine,

i actually found sunnysusies comments to be positive, maybe you read it as "stop moaning" i read it as "dont worry and stress just look for a solution"
Perhaps we are talking about different posts, but I cant see anything wrong in that. I have a hell of a lot of friends who want a three bedroom house with en-suite, garage, large garden AND two holidays a year, night out a week, nice car, flashy clothing. Are they going to achieve it by wishing ?? NEVER.

There are plenty of people who are still affording to get on the housing market, The op is unlucky to live in a high cost area. Its a tough choice but would they rather move away from 'home' and be a home owner or live where they know and be in rented.


Thelawnet,

Looking at your calculations above, you are discussing a 600k house, is that average for your area ??

mishka

whambamboo

mishkanorman wrote:

Meanmachine,

i actually found sunnysusies comments to be positive, maybe you read it as "stop moaning" i read it as "dont worry and stress just look for a solution"
Perhaps we are talking about different posts, but I cant see anything wrong in that. I have a hell of a lot of friends who want a three bedroom house with en-suite, garage, large garden AND two holidays a year, night out a week, nice car, flashy clothing. Are they going to achieve it by wishing ?? NEVER.

There are plenty of people who are still affording to get on the housing market, The op is unlucky to live in a high cost area. Its a tough choice but would they rather move away from 'home' and be a home owner or live where they know and be in rented.


Thelawnet,

Looking at your calculations above, you are discussing a 600k house, is that average for your area ??

mishka

£600k doesn't buy much these days in London - small house with tiny garden anywhere inside zone 3 that doesn't have a major crime problem.

mishkanorman

I asked because 600k where i live will get you 5-6 bedrooms with several acres !!!!


mishka

Sapphire

meanmachine wrote:

No, the advice was "to stop moaning" and "to earn more money".

I'm STILL waiting for a certain poster to repeat this advice on the debtfree site, the loans site, the mortgage free wannabe site, and all the rest.

In fact, why bother haggling for anything, or trying to get the best rate? Just stop moaning and earn more.

It's simple.

It's very easy to say 'earn more' - some people are not in a position to do so. This is very simplistic and not very helpful advice. :rolleyes:

Sapphire

ali007 wrote:

mid 40's feel hard done by that our parents could afford early retirement but we'll have to work for ever and ever to get a decent pension...... maybe if more effort was put into resolving this there would be less demand for BTL's???

I think you see the picture for 'the parents' as rosier than it actually is. Many people of that generation have certainly not been able to afford early retirement - and quite a few have been forced to support their brats, I mean children, way past the age when they should be supporting them.