RPI 4.5%, so what rate on your savings are you getting after tax?

Batchy

I decided to pile my savings into a house, as the inflation effect was scaring me.

I was only achieving 1.1% gross on the bulk of my savings which was 0.7% Net

The car I could have brought for 18k over two years went up to 22k and my savings by a couple of hundred. So effectively by not spending, my ability to buy the car I always wanted, unless I opted for a second hand one had diminished.

BUT, my dream house come down in value, signifiantly a BARGAIN!

Obviously with inflation at 4.5% my payrises at Inflation plus, and mortgage interest 3.94% Id say I was quite happy with the decisions Ive made.

Ive said this before bet against the sheeple not with them. So when the sheep are selling buy, when the sheep are buying ... sell (if it suits you). If you put all your money into ICESAVE when it was 8% returns, it could have burnt you badly. If you brought shares in northern rock, it could have burnt you badly thinking it was long term SAFE!

Those thinking working for the government is a job for life could be burnt badly.

At the end of the day, think outside the box! Think for yourself!

ultrawomble

Batchy wrote: »

BUT, my dream house come down in value, signifiantly a BARGAIN!

Is is still coming down in value?

Aberdeenangarse

Batchy wrote: »

If you brought shares in northern rock, it could have burnt you badly thinking it was long term SAFE!

Mate, so you've bought a house. In a couple of years it could have burnt you badly thinking it was long term SAFE!

Batchy

Probably...

Does it matter if its not being sold anytime soon. Its a house, not an investment. I never intended to buy to make money, I just never wanted to line others pockets and buy into a mad market, until I know I could afford to (just to clarify, my house in 1985 was worth 16k, in 25 years, it went up by over 1000%. Makes you think a little, at the same time, secretarys in our office were being paid around £5k-6k per annum there salaries have increased by under 500%, the major change in fundamentals now, is that two salaries (more often than one) now buy a house, husband and wife, gf & bf, civil partners, etc. People have ambition and want nicer houses and this is how its been achieved.

The problem is people have often not realised the negative impact on the kids, not having mom around when they finish school, etc! hence, problems with kids today!

Don't get me wrong Im not in denial, I brought into a falling market, at a point I was comfortable at, and a bargain property, which ticked every box. I never expected to buy in at the bottom. Where exactly can you draw the line. No doubt in 12-24 months time I could buy for say 5-10% cheaper. However, I may not have the same job, I might not be elegible for a mortgage due to missing a payment or something. I could be made redundant and not be able to achieve such a high value mortgage.

All I do know, is im getting on with life now... If I wanted the same house, it would cost me more than my mortgage payment, then I would have to continue saving money as well, to better my position. Basically, that would have an adverse effect on life for the next 2 prime years of my life, and probably wouldnt strengthen my position due to cash flow limitations.

So would have to have cash flow to afford both (rent and increasing savings)? (as banks will continue to require better LTV's with falling prices still)
Will the interest rate be as low as it is now 0.5% or lower? (Maybe, but defo not lower)
Would THAT house be available... NO a big fat NO, so you pays your money and makes your choice.

I would also think there will be a lot more people in the position to buy in a year or two as they are SAVING hard now! It will be cut throat out there, I hope you have already brown paper bagged the estate agent already in preperation for the bargains! Else in the future you will be left with all the crap that is left over.

Old_Slaphead

Batchy wrote: »

Ive said this before bet against the sheeple not with them. So when the sheep are selling buy, when the sheep are buying ... sell (if it suits you). If you put all your money into ICESAVE when it was 8% returns, it could have burnt you badly. If you brought shares in northern rock, it could have burnt you badly thinking it was long term SAFE!

Those thinking working for the government is a job for life could be burnt badly.

ICEsave never paid 8%
Some people actually made money out of Northern Rock as original shares were FREE
Government jobs-for-lifers should sue if they get burnt (unless they work in catering dept in which case it's their own fault).
FWIW I'm getting between 2.24% and 6.2% net on my savings - thanks for asking.

Batchy

Aberdeenangarse wrote: »

Mate, so you've bought a house. In a couple of years it could have burnt you badly thinking it was long term SAFE!

I don't take chances, yes the value of the house may have decreased, no doubt it will be volotile for a long period.

But, Im not locking myself into a future value. Ive locked myself into a historical value the fact if I follow a simple credit agreement it WILL BE mine, to do as I please.

The fact is, I am in control now, I HAVE to earn enough to pay the bills... so nothing has changed.

Have fun, live a little.

Batchy

Old_Slaphead wrote: »

ICEsave never paid 8%
Some people actually made money out of Northern Rock as original shares were FREE
Government jobs-for-lifers should sue if they get burnt (unless they work in catering dept in which case it's their own fault).
FWIW I'm getting between 2.24% and 6.2% net on my savings - thanks for asking.

Some people got burnt with ICESAVE - Mainly government departments, so all tax payers, resulting in current austerity cuts.

Northern rock shares no matter whether they were free or not are now worthless, so they still got burnt if they were current holders so ALL shareholders, not all historical investers, got very badly burnt. TOTAL LOSS effectively!

As for your savings, well done, is that guaranteed for the next 25 years, or the tail end of a 12/24/36 month fix? either way, well done. Im sure your relieved that your losing pace to inflation on your 2.24%, my point exactly.

Old_Slaphead

Batchy wrote: »

Some people got burnt with ICESAVE - Mainly government departments, so all tax payers, resulting in current austerity cuts.

Northern rock shares no matter whether they were free or not are now worthless, so they still got burnt if they were current holders so ALL shareholders, not all historical investers, got very badly burnt. TOTAL LOSS effectively!

As for your savings, well done, is that guaranteed for the next 25 years, or the tail end of a 12/24/36 month fix? either way, well done. Im sure your relieved that your losing pace to inflation on your 2.24%, my point exactly.

So basically you're saying, in your opinion, buy property & be a contrarian - hardly rocket science is it (apart from the fact that, by definition, everyone can't be contrarians)

nearlynew

Since when has deciding to buy a house been "thinking outside the box" ?
(god, I hate that expression)


!!!!!!

amcluesent

>I was only achieving 1.1% gross...<

Zopa is giving me 8%+ gross

mbga9pgf

Batchy wrote: »

I decided to pile my savings into a house, as the inflation effect was scaring me.

I was only achieving 1.1% gross on the bulk of my savings which was 0.7% Net

The car I could have brought for 18k over two years went up to 22k and my savings by a couple of hundred. So effectively by not spending, my ability to buy the car I always wanted, unless I opted for a second hand one had diminished.

BUT, my dream house come down in value, signifiantly a BARGAIN!

Obviously with inflation at 4.5% my payrises at Inflation plus, and mortgage interest 3.94% Id say I was quite happy with the decisions Ive made.

Ive said this before bet against the sheeple not with them. So when the sheep are selling buy, when the sheep are buying ... sell (if it suits you). If you put all your money into ICESAVE when it was 8% returns, it could have burnt you badly. If you brought shares in northern rock, it could have burnt you badly thinking it was long term SAFE!

Those thinking working for the government is a job for life could be burnt badly.

At the end of the day, think outside the box! Think for yourself!

NS&I Inflation linked savings certificates at RPI +1% were where a lot oh HPC put their cash. You could have got a better mortgage rate with better savings. I am on a 2% over base tracker. What would the reduction in interest by 1.5% over the term have done to your future spending power?