Any other home buyers in NI?

tara747

Haven't bought yet, I can't see there being another boom - and even if there is, I'll be well off out of it.

There's a huge level of personal indebtedness in NI and the economy is still depressed. So I'm in no rush at all. Just saving and minding my own business.

saverbuyer

tara747 wrote: »

Haven't bought yet, I can't see there being another boom - and even if there is, I'll be well off out of it.

There's a huge level of personal indebtedness in NI and the economy is still depressed. So I'm in no rush at all. Just saving and minding my own business.

Just think Tara, with prices up 1% over the last year, all that money sitting in your savings accounts earning 3% has managed to save you 2%.

Well done.

With inflation at 2%+, you'll have saved anyway.

motorguy

saverbuyer wrote: »

Just think Tara, with prices up 1% over the last year, all that money sitting in your savings accounts earning 3% has managed to save you 2%.

Well done.

With inflation at 2%+, you'll have saved anyway.

Oh dear.

Loving your maths there - you're assuming Taras savings matches the value of the house...

Assuming a house price of £150,000 and with a 3.3% increase

http://www.belfasttelegraph.co.uk/business/news/house-prices-in-northern-ireland-up-33-first-yearonyear-rise-in-six-29918944.html

thats £5000 more expensive than this time last year.

Assuming 3% on £50,000 thats £1500.

So £3500 down.

Also, if she'd bought this time last year, the say, £500 a month of rent would be going to pay of the mortgage, so, sadly, thats £6,000 down too.

So theres £9,500 down compared to this time last year. :eek:

Hold off for another year and with house prices predicted to rise another 4% that will be another £10,000 down.

Painful.

saverbuyer

motorguy wrote: »

Oh dear.

Loving your maths there - you're assuming Taras savings matches the value of the house...

Assuming a house price of £150,000 and with a 3.3% increase

http://www.belfasttelegraph.co.uk/business/news/house-prices-in-northern-ireland-up-33-first-yearonyear-rise-in-six-29918944.html

thats £5000 more expensive than this time last year.

Assuming 3% on £50,000 thats £1500.

So £3500 down.

Also, if she'd bought this time last year, the say, £500 a month of rent would be going to pay of the mortgage, so, sadly, thats £6,000 down too.

So theres £9,500 down compared to this time last year. :eek:

Hold off for another year and with house prices predicted to rise another 4% that will be another £10,000 down.

Painful.

Why not pick the whole of the market report?

The NIRPPI.

Why quote ONS which doesn't cover all transactions?

Why would you not pick the university or Ulster report showing a fall of 5% over 12 months?

The average price on the NIRPPI, shows an average of around 90k

Roughly Tara's deposit. So if "average" Tara didn't buy an average house, she would be better off because she kep her money in a 3% saving account.

You can't apply it to different types, locations etc. because some types have decreased and some increased. So we will work with an average house, for average Tara. Detached Tara could have saved more, lossed some. I don't know. I do know that Tara living outside Belfast would have noticed a bigger drop in prices than Tara living in BT9.

Now, I don't know if you know this Paul but you also have to pay interest on a mortgage and also as you know, rates.

So Tara with her 100k is actually making about £150 per month interest and saving say £100 a month on rates.

If you owned a house she would be paying roughly double the amount she bought for with interest. :eek:

But then she won’t have to as she will probably buy cash.

saverbuyer

Well done Tara, using Paul's example, you saved nearly £7000 on house price falls alone if you go by this report. :beer:

Plus £2000 in saving interest. :j



http://rpp.ulster.ac.uk/research/housing-index/q4-2013.pdf

qwert_yuiop

motorguy wrote: »

Oh dear.

Loving your maths there - you're assuming Taras savings matches the value of the house...

Assuming a house price of £150,000 and with a 3.3% increase

http://www.belfasttelegraph.co.uk/business/news/house-prices-in-northern-ireland-up-33-first-yearonyear-rise-in-six-29918944.html

thats £5000 more expensive than this time last year.

Assuming 3% on £50,000 thats £1500.

So £3500 down.

Also, if she'd bought this time last year, the say, £500 a month of rent would be going to pay of the mortgage, so, sadly, thats £6,000 down too.

So theres £9,500 down compared to this time last year. :eek:

Hold off for another year and with house prices predicted to rise another 4% that will be another £10,000 down.

Painful.

Do pay attention at the back, Paul - the stock market has been bouncing over the last year, which is where a lot of us have stuck our savings. Not everyone's so uninspired that they rely on Mr Danske. You could have made a wodge on a company as boring as Vodafone.

Predictions? Wasn't the world supposed to end on Dec 21st?

motorguy

qwert_yuiop wrote: »

Do pay attention at the back, Paul - the stock market has been bouncing over the last year, which is where a lot of us have stuck our savings. Not everyone's so uninspired that they rely on Mr Danske. You could have made a wodge on a company as boring as Vodafone.

Predictions? Wasn't the world supposed to end on Dec 21st?

Apologies, I forgot everyone on here was an expert stock trader in between finding reasons not to get on the property ladder.

The market is moving up, meaning the 'glass is half empty' brigade are having to look harder and harder for reasons not to buy.

work_to_live

saverbuyer wrote: »

Why not pick the whole of the market report?

The NIRPPI.

Why quote ONS which doesn't cover all transactions?

Why would you not pick the university or Ulster report showing a fall of 5% over 12 months?

The average price on the NIRPPI, shows an average of around 90k

Roughly Tara's deposit. So if "average" Tara didn't buy an average house, she would be better off because she kep her money in a 3% saving account.

You can't apply it to different types, locations etc. because some types have decreased and some increased. So we will work with an average house, for average Tara. Detached Tara could have saved more, lossed some. I don't know. I do know that Tara living outside Belfast would have noticed a bigger drop in prices than Tara living in BT9.

Now, I don't know if you know this Paul but you also have to pay interest on a mortgage and also as you know, rates.

So Tara with her 100k is actually making about £150 per month interest and saving say £100 a month on rates.

If you owned a house she would be paying roughly double the amount she bought for with interest. :eek:

But then she won’t have to as she will probably buy cash.

is it better to save and rent or hava mortgage with all the fees, insurance and interest? you two seem to know what ur talkin about so would be interested to know which option would come out better financially :think:

marathonic

If you have anywhere near enough in savings to earn enough interest to make up for losing out on property price rises then you'd have no problem getting some of the best interest rates on the market.

This means you'd be paying, at a rough guess, 2% interest, less than 1% in rates and 1% in maintenance and other costs. Meanwhile, most landlords look for a gross yield significantly in excess of this <4%.

Also, bear in mind that, if you have a 50% deposit, you are only paying 2% interest on 50% of the value of the house - so you are still earning an imputed rate of 2% on your deposit money through savings in mortgage interest.

Consider a property costing £160,000 to buy and £650 per month to rent and a person with a 50% deposit.

They will pay £7,800 per year in rent and earn £1,280 in interest (£80,000 * 2% less tax) for a total cost of £6,520 per year.

In buying, they would pay £1,600 in interest, about £1,000 in rates and about £1,600 in maintenance and other costs for a total cost of £4,200 per year.

Before anyone reverts to the typical arguments when talking down the market, interest rates can go up but so can rent. Even selecting a 5-year fix at 3% results in it being cheaper to buy - try getting any landlord to agree to a 5-year fixed rent

The difference using the above figures is £2,320 - or 1.45% of the value of the property.

If these figures were to hold true in your desired area, which they do in mine, the 1% rise in prices reported in the NIRPPI report as of Q3 2013 equates to a total loss over the year of 2.45% of the value of the property by not buying. Of course, we all expect this 1% reported rise to increase when the new report comes out on Wednesday.

marathonic

I've just checked out the 10-year rates on offer at the moment. It actually works out cheaper than renting, even if you opt for one of those - as they're below 4%.

In my opinion, anyone not buying solely because of interest rates must be deluded.