Its Depressing

Doozergirl

You might be complaining but at 4x salary you can buy one of those cheap flats. When you partner up with someone and are ready to buy together you will hopefully be climbing the career ladder and house is a very realistic possibility at those prices. There are people in London on not much more than you facing upwards of £150k for a small flat. It places like that where the housing crisis is, not unfortunately where you live.

I was on similar when I bought my first flat. It was small but suited needs at the time.

To be frank, I don't really understand why people think they are entitled to a 3 bed semi from the off Your career grows, your salary grows, the size of your house grows!

dougk_2

or this one just 18k!

http://www.rightmove.co.uk/viewdetails-13735885.rsp?pa_n=6&tr_t=buy

Hereward

ukbondraider wrote:

Why is everyone suggesting playing the stock market. This form of investing should only be done with extra money you have lying around and can afford to lose. Renting is a waste of money most of the time but the fact is, it is the only option available to some people...

dougk wrote:

IMHO stocks and shares are a far riskier investment than a house!

Yes at sometime you may be unlucky to experience a house price crash that will affect you (neg equity etc) - BUT the prices WILL recover in the long term.

A company can go broke just like that (Farepak anyone?) your investment is gone and you will never get it back.

Stocks and shares are far more volitile and small event can have a company crumbling. If they were such a good way of a guaranteed investment why are endownments and pensions struggling?

Investing in Stocks and Shares is risky, but you would not put all of your investment into one company, which you are effectively doing when you buy a house. Spreading your investment over a number of companies in multiple sectors helps mitigate the risk of your investment losing too much value. As mentioned numerous times on the Savings and Investment board there are plenty of other options if you consider Shares to be too risky that can produce decent returns with a small degree of risk.

There are many factors that can make a house uninhabitable, for example fire. So using dougk's example of a company failing then you are just as likely to lose your investment if you invested it in your property. In addition to this it is far easier to realise your investment if it is held in stocks and shares because you would have to sell your home, or at least remortgage it, to access the value stored in it.

dougk_2

Hereward wrote:

There are many factors that can make a house uninhabitable, for example fire. So using dougk's example of a company failing then you are just as likely to lose your investment if you invested it in your property. .

Fortunately though you can insure your house agianst most things for very little money (In terms of the building), something that is not so easy to do with stocks and shares.

You could also (not that I am recommending it!) use your house as a business such a BTL , or having a lodger so there is an additional income.

I guess the main point is as you say, there are lots of alternative ways to "invest" and different "risks" depending how you look at them and how savvy and clued up you are - However all investments involve some risks (even putting your money in a bank as occassionally these fail as well). Some investments will always payback in time and some will not.

Debt_Free_Chick

kriss_boy wrote:

Renting is a waste of money.

Is it? Isn't paying the bank a lot of interest over 25 (or more) years equally a waste of money?

If you rent, you save on a bundle on maintenance costs, as they are down to the freeholder/landlord.

Buying a house in these places is a slum... I cant speak for what its like in your town but the bad areas in my town.. are bad... I wouldnt dare set foot in some of those streets.

Could you afford to rent in a better part of town? Would your rent then be "dead money"?

I guess the point I'm trying to make is that buying is not necessarily Money Saving, when you add in the cost of maintenance and the interest you pay on your mortgage.

Is there any reason to own a house, other than to pass something on to your kids? Even then, if you saved the difference between owning & renting, over the duration of an average mortgage, you could still pass on hard cash to your kids.

Just curious ... why do you want to own?

PosterBoy77

kriss_boy wrote:

Renting is a waste of money. Id sooner stay at home and pay digs but either way I cant get on the ladder.

Buying a house in these places is a slum... I cant speak for what its like in your town but the bad areas in my town.. are bad... I wouldnt dare set foot in some of those streets.

It seems that many people in this country are brainwashed into thinking that renting is a waste of money but buying is not. This may be true in some cases were you were actually buying with your own cash. However most people can only buy with a mortgage. With a mortgage you are effectively renting money from a bank and using the rented money to buy a house at current prices. Paying interest to a bank is as much a waste of money as paying rent. It seems that far too many people fail to grasp that most of the money used to pay for a mortgage is not used to reduce the amount you have actually borrowed. In the case of an interest only mortgage none of the money is used to reduce what is borrowed. After 25 years you would owe the bank the same as the day you took out the mortgage.

The more imprtant factors to look at are as follows:

How much can a property be rented for versus the interest payments on a mortgage? If it it less it is likely to make sense renting.

How long are you going to stay in a property? If you are not staying long, stamp duty and other costs can make buying even less attractive.

Do you feel houses are going to rapidly increase in value during the period of ownership? If so it can be worth buying. However othe savings or investment vehicles can be just as good if not better over the long term.

Mikael

Poppy9

We bought our first house when we were 22/24. We were both earning £5k p.a. and the house - a 4 bedroom mid terrace, cost £19500. We put a £1500 deposit down and mortgaged the rest. Interest rates were much higher then (1986). House needed gutting but it was all we could afford. We sold the house in 1994 for £41000 and bought our next house for £80,000. As mortgage rates had dropped dramatically by the time we sold our first house we had managed to save almost £30k over 8 years - of course our salaries had increased, but we did have to weather redundancy and OH setting up his own business in this time. We increased our mortgage to £33k as house was in original condition and needed complete rewiring, new kitchen, bathroom, windows, decoration, flooring etc. House is now worth £300k. We should be mortgage free in 3/4 years. I usually remortgage every 2 years to get a new discounted deal and repay some a lump sum off the mortgage from our savings. Mortage payments are now less than £150 per month. For that we live in the best area of the City and have a large 4 bed house with extensive gardens.

Years ago house prices rose very slowly but now they are increasing rapidly. As many have found out if you leave it too long to get on the property ladder you will miss out.

If you want to buy think about buying somewhere with 2 bedrooms so you can take in a lodger to help pay the bills. It's not only the mortgage you have to meet but Council tax (ours is now the same as our mortgage repayments each month), water, gas, electric, insurance and maintenance. Another poster is right though, if you want to be a home owner you will have to forgo the cars, holidays, clothes etc for a good few years.

scorpio_princess

Doozergirl wrote:

You might be complaining but at 4x salary you can buy one of those cheap flats. When you partner up with someone and are ready to buy together you will hopefully be climbing the career ladder and house is a very realistic possibility at those prices. There are people in London on not much more than you facing upwards of £150k for a small flat. It places like that where the housing crisis is, not unfortunately where you live.

I was on similar when I bought my first flat. It was small but suited needs at the time.

To be frank, I don't really understand why people think they are entitled to a 3 bed semi from the off Your career grows, your salary grows, the size of your house grows!

No offence, but I don't understand why some posters on here always assume that those that can't afford to buy a home are desperate to buy a '3 bed semi'. How do you draw this conclusion? I for one don't want a 3 or even 2 bed house - I don't have children, and aren't planning on having them either! Is it really that unreasonable to wish for a clean, stable one bed flat that's not falling down, in an area where you feel safe - especially if you live alone (like me).

And as for the 'find yourself a partner' comments that some have added - hmmm easier said than done. Note to self - go out and get together with any old Tom, !!!!!! or Harry, just so that disgusting studio flat/bedsit in the middle of mini beirut can be all mine!!

So, tell me all you homeowners out there - would YOU buy a skanky flat in a skanky area for 85k??

Also, not everyone has the has the capacity to earn 20k, let alone 25 or more! We don't all live in large cities or affluent areas in the south east where unemployment is well below the national average. I earn 11k a year, and have done for the last 3 years - no pay rise on the cards for me as yet! I am also disabled, and whilst I hate to bring this up, I am at a disadvantage of getting another job because of this (I've applied for plenty of jobs, but got nowhere).
I'm hoping that when I get my degree (which I'm studying for part time) and hopefully get into teaching, my salary will be somewhat better - so it's not all doom and gloom for me! But my point is that not everyone has the same opportunities in life so it's unfair to suggest that people are being unrealistic in wanting to own their own home.

Stop tarring us all with the same brush! I'm not extravagant in the least - no ipod, flashy phone or expensive car for me, and yet i'm still nowhere near in a position to buy. It's nobody's fault, just how it is at the moment - but I can't stand smugness!!

Not getting at you personally Doozer, just trying to give the other side of the story.

lynzpower

hey scorpio princess

The thing is the OP said that he wanted "a house" hence the statement buy a house in the cap part of town, or whatever he said.

As lots of people say, its not vitally important that everyone OWN thier own house, indeed for many its preferable to rent, be it from a housing association ( these are good if you can get hold of one of these the security of tenure is unrivalled) the council ( what there is left) or from a private landlord.

its much better VFM to rent cheaper than a mortgage than pay out hunreds of pounds in interest to the bank every month.

I do think OWNING our own homes is a weird aspiration. "I really really want to be in a 100k debt, and servicing this for the next 25 years " seems like madness in retrospect to me, I wanted it badly then realised the hollowness it all.

meanmachine_2

scorpio_princess wrote:

So, tell me all you homeowners out there - would YOU buy a skanky flat in a skanky area for 85k??

Stop tarring us all with the same brush! I'm not extravagant in the least - no ipod, flashy phone or expensive car for me, and yet i'm still nowhere near in a position to buy. It's nobody's fault, just how it is at the moment - but I can't stand smugness!!

.

Scorpio, some of the posters on here *have* to caricature FTBers as stupid, greedy or wasteful otherwise their arguments fall down.

Basically they want you to buy their homes for more than they could ever afford and for far more than they paid.

That's it. End of story.

As I showed a few weeks ago, in 2001 int rates were at 5%, like today, but house prices half what they are now. So it's often been much easier to buy than it is today.

They don't care about that. They just want you to shut up and pay their stupid prices.

No wonder you're angry.