Own a house - you're working for nothing.

Heyman_2

des_cartes wrote: »

Failed str gamblers? Not in my case. Prices in my target areas are already 10-15% below when I cashed in and I am confident of getting another 10-15% off in the current market. That would get me pretty close to my target 30% saving, in fact I might just do a bit of window shopping before chistmas just for fun, or I might hang on untill 2011 when tax rises, job cuts and forced selling knock another 10% off.:)

Here you go Des, call it an early Christmas present -

de1amo

the most multipled town in the country is Weymouth in the Sw and the second is Bournemouth--my home town---i am not really interested enough to really see how the 2 are fairing in price increases or lowering--if i sell i will get the market value--to reinvest in another property!

IveSeenTheLight

des_cartes wrote: »

And cost them more if they want to trade up.

I gave an example before where it shows an increasing price helps to trade up as well.
Something along the lines of : -

FTB buys with 10% deposit on a £100k property.
HPI over increases 50%, meaning the property is now valued at £150k.
They therefore have £60k+ equity (+ being the capital repayment. for arguments sake, lets say £8k (5 years repayment at 5%)) = £68k equity

The property they want was valued at £200k, but is now £300k.
with £68k equity, they can get an LTV of 77% (if they have any other savings over those 5 years they could possibly squeeze a 75% LTV. opening up many more products.

If the property stagnated over those 5 years thry would have £18k equity for a £200k house, meaning they don't even have enough deposit to qualify for a 90% LTV and would need additional savings.

HPI while makeing the step up dearer, does improve the opportunity to step up that may not be there without HPI

IveSeenTheLight

PasturesNew wrote: »

renting cheaper (bedsit) than the house (big).

Not for me sorry.
Wouldn't wan't to uproot my wife and kids potentially every year / twice yearly into a bedsit rather than in a nice 4 bed house.

My 4 bed house mortgage interest is circa £250 per month.
You couldn't even rent a bedsit for that in my VI area

ukcarper

Here is a real example

Since 1985 I have paid £80,000 interest and £21,000 in endowment payments.
The endowment paid out £39,000. I had a £15,000 deposit, which at 5% per year would give me about £50,000 after 25 years.

So if rent = mortgage interest I would have £89,000.

House now worth £280,000 and is paid. Hard to say what it would be worth if it had only inflated with wage inflation but I would guess about £195,000.

This assumes Rent = mortgage interests, which is not true for length of mortgage for example the rent would have been in excess of £1000 per month 3 years ago and mortgage interests was £200.
Rent now £1200 per month Mortgage interests payments now £0.

Desperate_Housewife_2-2

Don't understand how this can be..? I now live 'rent free' as I paid off the mortgage last year so all my wages are mine, If I rented then it would be a perpetual monthly payment until I no longer need a roof over my head.

neas

Katie-Kat-Kins wrote: »

Wonderful, I've been biding my time for long enough and have a healthy deposit saved, if things carry on I might just get a house bought after years of waiting.

And then they keep dropping... which is more wonderful right?

neas

I love these types of threads. People predict and hope and wish for falls (me included) but in the end you cant predict what the masses are going to do...as most of them dont give two hoots about monthly house falls and quite alot of them have already paid off their home.


I have a question for those who are saving for a deposit (rightly so) and waiting for the 'right' moment.

How much will you borrow in terms of your yearly salary? 2x? 3x? 3.5x? or higher?

Thats all that really matters... if you just going to be borrowing 3.5x your income now and paying it back over 25 years vs someone who does the same now before house prices drop... really your not going to be much different except the individual who bought now will have lived a bit longer in his house.

mrcow

PasturesNew wrote: »

This STR gambler's still ahead mathematically.

Not paying for house/maintentance/insurance, some interest from money added to the pot, renting cheaper (bedsit) than the house (big). And - no responsibilities... that's the best bit. When you own a house and leave it, there's some anxiety about floods/fire. When you rent, it's not your problem any more

I didn't like/want my house, so I'd have been down-sizing anyway.

It's great being completely free and irresponsible. I can recommend it. It's all like one big long holiday

You may feel that living in a rented bedsit is just "one big holiday" but to most of us, that sounds like hell on Earth. You're not really selling the idea very well.

Most normal people don't have any extra anxieties about floods or fires.....not any more than anyone else. If you rent a place, you'd hardly want all of your property burned to a crisp either.

JonnyBravo

PasturesNew wrote: »

It's great being completely free and irresponsible. I can recommend it. It's all like one big long holiday

Your posts on the matter of where you were going to live (in London, then a car, then God knows where) didn't read like "one big long holiday", but then we might have very different holidays.