Any other home buyers in NI?

qwert_yuiop

motorguy wrote: »

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.

As previously said, we're enjoying having our lives subsidised by regretful property investors. Depreciation, rates, insurance and repairs are no concern of mine, and I'm happy to pay a modest rEnt to avoid those horrors.
In the few years we've been in this gaff, mr shrewd investor buy to let has lost approx 150, 000 on the deal. What a bargain it's been for us. Could have been worse - he might have a bad tenant and a void period - but of course I don't need to tell you about that?
Meanwhile our savings have been growing nicely.

Hard to believe, but had we bought this millstone in 2007, we would now need a lottery win to be in the financial position we are in today.

Perhaps the market is moving up. As we' re often told, past performance is no guide to future returns. All that guff about how you can't lose on property, renting is dead money, house prices never go down - still believe it?

qwert_yuiop

So yes the market may actually go up a bit.

I'm not dashing out to buy some house I don't want just because renting is dead money, you can't lose on property, house prices never go down. Wrong.

marathonic

qwert_yuiop wrote: »

Hard to believe, but had we bought this millstone in 2007, we would now need a lottery win to be in the financial position we are in today.

I hope you don't take offence to this but you shouldn't look at how much you would have lost since 2007 when trying to determine whether buying today is a good idea or not. That's irrelevant and you should only look on the numbers based on today's rental values and property prices.

Using my figures above, but adding an extra 0.5% for maintenance and other costs and taking a 10-year fixed rate instead, the difference between buying and renting works out at £80 per year.

It's usually best to assume static house prices in these calculations because noone can predict the future.

For that £80 extra per year cost in buying, you have £2,400 per year for costs after mortgage payments and to maintain your property which I would argue is significantly above what most landlords spend on their properties - implying you'd have better maintained, more modern living conditions.

You also have an exact figure for your mortgage payments for the next 10 years and, let's face it, chances are someone that could afford to save a 50% deposit could probably very easily afford to take the other 50% out over a 10-year term eliminating the risk of absolutely any future shocks with regards to interest rates.

In most areas in Northern Ireland, the only reason it doesn't make sense to buy now, assuming you have a good deposit, is if you need mobility and can't tie yourself down to a particular location for 5+ years.

qwert_yuiop

The major reason to avoid buying is to avoid further cataclysms.

Don't take offence but it seems there's some excessive protesting going on here.

Anyone who sat out the madness of the last few years can chill for a while yet.

marathonic

qwert_yuiop wrote: »

Anyone who sat out the madness of the last few years can chill for a while yet.

I sat out the madness of the last few years but gave in and bought in December 2012. I have no regrets but I can see why someone would be fearful of further drops.

I suppose in relation to your 'avoid further cataclysms', if you buy sensible using a similar scenario to the ones in my figures, the risk is minimal.

However, if you're buying a 2-bed house because it's all you can afford and you have intentions of eventually having 2+ children, then you could be taking a lot more risk than many are comfortable with.

If you buy big enough to handle whatever life throws at you whilst keeping mortgage repayments to an affordable level, the risks of prices dropping further are nowhere near as big as the risk of rents rising significantly... all in my opinion of course!!!!

qwert_yuiop

work_to_live wrote: »

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:

The sad truth is the house must appreciate for a buyer to be ahead. Roughly, even flat prices are a loser if you need a mortgage. Slightly different if you have enough savings to buy outright, but any depreciation and you're goosed any way you're buying.

marathonic

qwert_yuiop wrote: »

The sad truth is the house must appreciate for a buyer to be ahead. Roughly, even flat prices are a loser if you need a mortgage. Slightly different if you have enough savings to buy outright, but any depreciation and you're goosed any way you're buying.

Not the case. As can be seen in my figures above, someone with a 50% deposit does really well if they take a tracker mortgage at 2% - which exposes them to rising rates in a similar way to how a tenant is exposed to rising rents.

Even when they opt for a 10-year fixed rates and over-estimate maintenance costs, they are roughly on a par with a renter.

Whilst the future is uncertain, inflation alone means that house prices are unlikely to be at current levels in 10-years but let's ignore that for the purposes of this post.

If the person has a lower deposit, they are still ahead with the tracker mortgages and the 5-year fixed rates but the 10-year fixed rate would probably see the renter ahead, assuming static house prices.

I could post more figures to prove all these points but I think the figures already posted do a sufficient job of explaining the reality and people with different levels of deposit and in different regions should be well able to come up with the figures for their own areas and levels of deposits.

marathonic

work_to_live wrote: »

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:

Take my calculations posted just after this question from you and apply something similar to whatever the market rates available in your local area are for rent and property prices.

Figure out the best mortgage rates available for your level of deposit from here: http://www.money.co.uk/mortgages.htm

If the figures work out cheaper for renting, by all means continue renting - but I'd be extremely surprised if they did.

I'm a bit of a mathematical nerd and would far rather go by the cold, hard, numbers than by some random comments in relation to the market on an internet forum.

qwert_yuiop

Any depreciation at all and your calculations are void. During the last seven years there has been a fair bit of inflation. This has borne no relation to the 50 % plus deflation in house prices.

Any one buying a house now having lived through the last 7 years cannot be assured that the whole meltdown will not happen again. Therefore the decision must be based on grounds other than economic. I bought a new pair of shoes the other day. Not a sensible decision business wise. I still bought them. Likewise there is no reason to buy a jag when a fiesta will carry you around just as well. People still buy jags. The same thinking may apply on house purchase.

marathonic

qwert_yuiop wrote: »

Any depreciation at all and your calculations are void. During the last seven years there has been a fair bit of inflation. This has borne no relation to the 50 % plus deflation in house prices.

Any one buying a house now having lived through the last 7 years cannot be assured that the whole meltdown will not happen again. Therefore the decision must be based on grounds other than economic. I bought a new pair of shoes the other day. Not a sensible decision business wise. I still bought them. Likewise there is no reason to buy a jag when a fiesta will carry you around just as well. People still buy jags. The same thinking may apply on house purchase.

I'm not going to argue against this one because I don't even know when to start. Why go off on a tangent about Jaguars and shoes when the numbers prove you wrong?