Any other home buyers in NI?

A.L.D.A

Tara 747
When I bough my first house I think the interest rates rocketed with inflation, and in many ways it was a benefit as the value of the amount borrowed fell. It all depends on how it happens, if salaries rise also then it may not have the effect you predict. If however interest rates go up and wages decline there will be open revolt I would hate to be in the government that presides over that. I thought that they would try to engineer some inflation to reduce the value of savings and encourage spending and at the same time reward those in debt.

When we look at house prices we should also factor in inflation. If house prices are increasing less than inflation then they are decreasing in value. Also because of this we perhaps tend to underscore the overall reduction in value. But as I said it will all come down to intangibles and disposable incomes. They say there are signs of some upward movement but I haven't experienced it!!

Regarding earnings The median earnings for full time workers is £451 per week, which itself is very low and I think lowest region in the UK. .

saverbuyer

A.L.D.A wrote: »

Tara 747
When I bough my first house I think the interest rates rocketed with inflation, and in many ways it was a benefit as the value of the amount borrowed fell. It all depends on how it happens, if salaries rise also then it may not have the effect you predict. If however interest rates go up and wages decline there will be open revolt I would hate to be in the government that presides over that. I thought that they would try to engineer some inflation to reduce the value of savings and encourage spending and at the same time reward those in debt.

When we look at house prices we should also factor in inflation. If house prices are increasing less than inflation then they are decreasing in value. Also because of this we perhaps tend to underscore the overall reduction in value. But as I said it will all come down to intangibles and disposable incomes. They say there are signs of some upward movement but I haven't experienced it!!

Regarding earnings The median earnings for full time workers is £451 per week, which itself is very low and I think lowest region in the UK. .

The only inflation that matters when trying to erode debt is wage inflation. The consumer price index shows inflation at around 25% since 2007. Wage inflation since that time is less than half that. Effectively we are 10% plus poorer. More if you take account of inflation on the things we actually need like food and energy.

This isn't the 80's where inflation was very high and so were your savings rates and wage increases.

We have persistently high inflation, near zero savings rates and little or no wage inflation to erode the massive public and consumer debt burden. The only think that is cheap is debt. It doesn't surprise me that the government has put all it's hopes on spending. Unfortunately you can't spend what you don't got. It's going be reduced living standards for all but the super rich. This first time standard have dropped I believe.

saverbuyer

tara747 wrote: »

A.L.D.A quoted a mean figure of £23K. Are you saying that £23K is the median gross salary for FT workers? Honestly, I find that hard to believe. :eek: But I'm always willing to be corrected!

It's to do with the massive public sector here. They pull the average way up. Public sector average is 29k compared to the private 20k.

A.L.D.A

saverbuyer wrote: »

It's to do with the massive public sector here. They pull the average way up. Public sector average is 29k compared to the private 20k.

It is what it is.

qwert_yuiop

GlynD wrote: »

I can't argue with a word you've said but (there's always a but) if anyone was thinking of buying, now wouldn't be a bad time to buy. Sure there might still be better bargains to be had but I can only see any difference in the next 12 months as being marginal.

All you can say with certainty is it's a better time than it was.

GlynD

qwert_yuiop wrote: »

All you can say with certainty is it's a better time then it was.

I'll be honest with you: it hasn't affected us in the slightest but it's been a bad time for a lot of people that's for sure.

duggan1

Have to say I'd love to be a home buyer right now but due to mistakes and sheer stubbornness on my part no one is likely to give me a mortgage for the next 2/3 years despite having a 20/30% deposit

saverbuyer

motorguy wrote: »

+1

Similar to us.

When we built our new house we decided to rent our previous house rather than 'give it away' at a ridiculous price.

4 years on we've got great long term tenants in it happily paying off the mortgage for us. Once its paid off - some time away yet - we can then either continue to draw the rental as an extra income or sell it off. We'll both be in our mid fifties by then so it will be useful next egg - its a four bed detached with garage in a nice area so it will always either rent or sell (in a more bouyant market)

There are a lot easier ways to make money. Yield is probably less than a decent bank account and a lot less than a good pension. There's also the fact you have to work to make it. And pay tax on the income and CGT when you look to sell.

Buy to let doesn't make sense unless you expect capital increase. So many people bought into it from 2000 onwards I think you'll be competing when you want to sell. Everyone thought it was the path to riches and "it's me pension".

If you bought after 2003, particularly outside Belfast, then you've lost money. Probably a fair bit too. If you didn't then there are better place to put the equity. A highly leveraged gamble with high on-going costs wouldn't be my choice.

tara747

motorguy - if your house was already down in value by 1/3 in 2009, it's likely depreciated even further in the interim. It's not an asset, it's a liability. And (sorry, but) there's not a chance in hell that you'll break even in the next five years.

I'm glad that being a LL is working out for you, though. I wish you luck.

As for me, I'm more than happy to continue renting and saving.

saverbuyer

motorguy wrote: »

No. By definition a house is an asset. A mortgage is a liability.

What i'm moving towards is making sure my assets outweigh the value of my liabilities. Thats the trick.

No, as it costs you money every month in maintenance and taxes, it’s a liability.

Looking at the figures you're mortgage rate must be low (consent to let?) for you to have been able to pay that much capital after rates, maintenance and tax is taken.

The RV - 15% was in relation to my market, South Belfast. I imagine other places, Craigavon area for example, 20% down in 12 month would be looking at RV under 20-30%.

Oh by the way I did read your post, and it is a buy to let. You rent it out on a BTL or consent to let product. HMRC calls the process BTL. I know you bought it to live in but it has now become a BTL.

Also be aware of selling costs and potential CGT. Also as you pay the mortgage down, your tax liability increases, until you have no interest cost to offset.

I don't think firesale is the correct term here. Selling something at current market values isn't a firesale. It's just a sale.

It's a tough one and I get your reasoning. What would I have done? We'll honestly it looks like you paid little off the mortgage since you bought until 2008, I would have over paid and gained some equity so if I had to sell, it wouldn't have been an issue.

I don't want to be a landlord. My time is worth more than a couple of hundred quid a month to be honest. I can make more working than putting my effort into maintaining someone else’s home. If I had another house, I would have taken the hit. Life's too short and I don't want to be in the letting business.

Too little money, way too much effort.

I’ll just stick to the pension and ISA.