Where in belfast area for first time buyer?

talksalot81

leftieM wrote:

Whoever mentioned the Japan thing - didn't they have a huge house price crash? Some people have 100 year mortgages while their neighbours who live nearby got the same places for a 10th of the price after the crash.

Yup, but it cannot happen here.

talksalot81

jetboy wrote:

I don't see that this thread is going anyware useful. You have reached a decision to ditch the house hunting race and are desperately trying to justify you actions. As for renting..using your example figure and assuming that prices rise only by current savings rates an interest only mortgage will cost you £0 over 2 years in real terms whereas renting will cost £9300 assuming you sensibly invested the difference between the mortgage and rental cost.. Wrap it up and lets re-open this in 2 years and see how far you've got. Good luck

I dont get this...

I pay £700 a month for interest only. Immediately I have spent £16800 at the end of my two years.

I pay £400 rent and I have spent £9600.

Now imagine prices manage to settle down and stay still. At the end of the two years I will have £7200 more in my bank than I would with an interest only mortgage.

Now if price drop for whatever reason, the differential becomes greater.

If they rise dramatically, fair enough I make a net loss. However, I am not of the opinion that my £180k property will be worth £350k in two years (yes - that is what the current trent will give rise to).

Furthermore, what about interest rates? Going for a mortgage which is already a push - where do I go if rates go up 1%? Im going to be seriously scrambling.

I shall close with our current rate with which many seem happy to believe will continue indefinitely. 30% growth pa - 2 years 70% - 3 years 120% - 4years 285% - 5 years 370%. In 5 years, a house currently costing 150k will cost over 550k. If you believe this - fine (but you are really stupid). If you dont, then you immediately are accepting the growth will slow and are making big extrapolations in full acceptance that your basic assumptions are incorrect.

leftieM

We're not at the 100-year mortgage stage yet however! Crazy though it seems there is mileage in the housing boom yet.
if you want to know what the house prices are like check out Templeton Robinson and Pooler Watson. They publish bids. You will see when the market starts to cool.
I don't think too many people here believe that the current rate of growth will continue. However I will be surprised if prices drop to the level where you can get your 3 bed semi in Dundonald for 180k.

talksalot81

I would like to know how many posters believe their house will be worth over a million in 10 years time... It is a valid question, so someone please answer...

leftieM

I don't see how you are inferring that anyone believes houses will be worth that much in 10 years. However the message that people are trying to get across is that prices are unlikely to drop and are likely to rise, albeit at a slower rate.

Some of your calculations are based on paying £400 a month rent. I assume this isn't for the same type of house that you would like to buy? I was helping a colleague to find a 2-bed flat to rent near QUB 18 months ago and we struggled to get anything decent for £400 a month which was his budget. In fact we had to increase the budget or he'd have ended up in a dump. I would have thought a 3-bed semi anywhere decent would be £550 a month or more.

talksalot81

The £400 cals is for exactly what I would be buying. I cant afford to buy in an around queens so would be a bit further out where rental prices are much lower.

The point about the growth is that if you accept that it can slow, you are naive to deny that it could stop. Slowing and stopping (and indeed declining) are EXACTLY the same thing, only to different degrees (if you know anything about mathematics, do your differentials and it is obvious). If any one of the three happens, the others are plausible. I doubt many think the market can continue at its current rate indefinitely, but too few people are willing to link slowing in growth with the potential for decline.

My studies are little more than risk analysis and my conclusion (and my analytical skills will be better than most) is that buying provides more 'unknowns', requires more reliance upon predictions and provides more potential for long term hardship. In contrast, renting provides a relatively well known path which, although it does not offer the same potential gains, equally does not provide anywhere near the risk for difficulty.

leftieM

I had a look at Dundonald rents and they didn't seem to be that much lower. Anyway no doubt you've done your homework on that one.
As for the house prices stopping - maybe I am naive in thinking that they won't fall inside the next year. Thankfully I can afford to be naive because I have 120k deposit for my next house. Thankfully I didn't think because I have a PhD and my husband comes from a well-off background we deserve to live in a certain type of house and we bought an ex-council end terrace that we could afford at the time.
Good luck to you. I think that you will be fine whatever happens because you will always think you are right.

fredy34

talksalot81 wrote:

I dont get this...

I pay £700 a month for interest only. Immediately I have spent £16800 at the end of my two years.

I pay £400 rent and I have spent £9600.

I like your maths!

2 bedroom terrace - £450 rent a month.
Same house interest only is about £400 - £450 a month. Not £700! thankfully

NAR

talksalot81 wrote:

The point about the growth is that if you accept that it can slow, you are naive to deny that it could stop. Slowing and stopping (and indeed declining) are EXACTLY the same thing, only to different degrees (if you know anything about mathematics, do your differentials and it is obvious). If any one of the three happens, the others are plausible. I doubt many think the market can continue at its current rate indefinitely, but too few people are willing to link slowing in growth with the potential for decline.

I don't think anyone has said that it will continue to grow at the same rate forever. It is a "best guess" judgement call by the buyer (you call it risk analysis if you like) when they think the market trend will change and by how much. I have given you sound reasons why I think there will be a strong upward trend for the next three to five years - after that who knows.

Love you being pretentious that you're better than most at risk analysis! :rotfl:

Would anyone have predicted five years ago that the housing market boom was about to take place? Hindsight is a wonderful thing. But the main positive that we can all see is that it looks as if we will have peace in this country for quite a period of time, which will continue to have a very strong positive influence in the housing market.

talksalot81

fredy34 wrote:

I like your maths!

2 bedroom terrace - £450 rent a month.
Same house interest only is about £400 - £450 a month. Not £700! thankfully

Nope.... done extensive research in the numbers in the areas I am considering.

If anyone takes the time to look at my posts, I am confident in my views but have repeatedly stated to the effect 'if I am right'. I never said that I am definitely right, it is the other posters who are telling me that I am definitely wrong!

As for my risk analysis... when you spend 6 years doing high end analysis, it tends to make you better than most...