Any other home buyers in NI?

motorguy

qwert_yuiop wrote: »

My only interest in the boom/ bust is one of relief.

To the extent of it letting you cloud your judgement now.

It does relate back to my comment yesterday about a new "generation" of buyers coming through, who havent got this jaded outlook and are seeing what they can afford NOW, not based on what happened 8 years ago.

marathonic

motorguy wrote: »

It does relate back to my comment yesterday about a new "generation" of buyers coming through, who havent got this jaded outlook and are seeing what they can afford NOW, not based on what happened 8 years ago.

A lot of the older batch of renters also fail to realise something else:

When you go over the age of 40, the mortgage term you can secure from the bank reduces with every passing year.

This means that, if you put off buying from the age of 40 to the age of 45, and assuming a retirement age of 67, the bank will reduce the maximum term of a mortgage they'll provide you from 27 years to 22 years.

Now, let's say prices rise by 10% during those 5 years, which is likely to be a 'below-inflation' increase, not only do you have to pay 10% more, but you could probably only borrow about 20-25% less.

Therefore, the standard of a house you could buy is likely to be significantly below what you could afford today.

qwert_yuiop

motorguy wrote: »

To the extent of it letting you cloud your judgement now.

It does relate back to my comment yesterday about a new "generation" of buyers coming through, who havent got this jaded outlook and are seeing what they can afford NOW, not based on what happened 8 years ago.

Not really. As I say, I'm now in a position to buy the place I like outright with no debt. I wasn't before now,
Fundamentally, I agree that getting a property is a good idea, but it has to be yours and not the bank's, otherwise your "real" estate is a big liability of debt and obligation.

Plenty of my generation got themselves in a fix because their parents told them they had to buy now. This won't happen for a very long time.

marathonic

qwert_yuiop wrote: »

Fundamentally, I agree that getting a property is a good idea, but it has to be yours and not the bank's, otherwise your "real" estate is a big liability of debt and obligation.

It's no more of a liability than the monthly rent paid by a renter is.

qwert_yuiop

marathonic wrote: »

It's no more of a liability than the monthly rent paid by a renter is.

Rent can be adjusted by moving to cheaper house a lot more easily than the mortgage can.

marathonic

qwert_yuiop wrote: »

Rent can be adjusted by moving to cheaper house a lot more easily than the mortgage can.

To a certain extent, that's true. But you can only go so far before you end up in the most undesirable house in the most undesirable neighbourhood. That's not really something that I'd like to have as my 'back up plan'.

I'd hazard a guess that, through inflation, the mortgage repayment for a desirable house bought today will not exceed the rent payments for an undesirable house in 10+ years time. That's speculation of course - but I'd be reasonably comfortable betting on it.

qwert_yuiop

marathonic wrote: »

A lot of the older batch of renters also fail to realise something else:

When you go over the age of 40, the mortgage term you can secure from the bank reduces with every passing year.

This means that, if you put off buying from the age of 40 to the age of 45, and assuming a retirement age of 67, the bank will reduce the maximum term of a mortgage they'll provide you from 27 years to 22 years.

Now, let's say prices rise by 10% during those 5 years, which is likely to be a 'below-inflation' increase, not only do you have to pay 10% more, but you could probably only borrow about 20-25% less.

Therefore, the standard of a house you could buy is likely to be significantly below what you could afford today.

Well, there's a good argument for saving your pennies, boys and girls.

Imagine paying for a house for 27 years. The horror.

marathonic

qwert_yuiop wrote: »

Well, there's a good argument for saving your pennies, boys and girls.

Imagine paying for a house for 27 years. The horror.

Correction: Imagine paying £130 per month over the cost of renting so that you can own the house outright after 30 years and subsequently reduce your expenses by £100 per week (see figures posted here http://forums.moneysavingexpert.com/showpost.php?p=64735718&postcount=529).

Then, imagine the fact that, should rents increase by £50 per month, you're only paying an £80 difference per month to have the final benefit of owning the house outright.

Then, imagine the liklihood that rent is going to increase significantly over that 30 years. Weigh this against the fact that interest rates are likely to rise but, as the above figures use 5-year fixed rates, you'll have some of your mortgage paid off by the end of the fix - reducing the impact of such rises.

Also, weigh the fact that your mortgage repayments are fixed for 5 years against the liklihood of any landlord agreeing not to raise rents for 5 years.

Finally, consider the fact that the homeowner has budgeted for maintenance costs in excess of what most landlords pay - allowing you to replace furniture, bathrooms or kitchens and repaint more frequently than the average landlord (in your own colours and/or styles).

qwert_yuiop

marathonic wrote: »

Correction: Imagine paying £130 per month over the cost of renting so that you can own the house outright after 30 years and subsequently reduce your expenses by £100 per week (see figures posted here http://forums.moneysavingexpert.com/showpost.php?p=64735718&postcount=529).

Then, imagine the fact that, should rents increase by £50 per month, you're only paying an £80 difference per month to have the final benefit of owning the house outright.

Then, imagine the liklihood that rent is going to increase significantly over that 30 years. Weigh this against the fact that interest rates are likely to rise but, as the above figures use 5-year fixed rates, you'll have some of your mortgage paid off by the end of the fix - reducing the impact of such rises.

Also, weigh the fact that your mortgage repayments are fixed for 5 years against the liklihood of any landlord agreeing not to raise rents for 5 years.

Finally, consider the fact that the homeowner has budgeted for maintenance costs in excess of what most landlords pay - allowing you to replace furniture, bathrooms or kitchens and repaint more frequently than the average landlord (in your own colours and/or styles).

As I say, my intention is just to buy the thing and be done with it. Apart from rates, insurance, repairs and possible (or probable) depreciation that is.

marathonic

qwert_yuiop wrote: »

As I say, my intention is just to buy the thing and be done with it. Apart from rates, insurance, repairs and possible (or probable) depreciation that is.

Which is all well and good if your close to having the full purchase price saved.

I would feel very uncomfortable indeed if I were to advise anyone in their twenties to stay out of the market today and hold off on buying. Were I to do this, they're likely to come back in 2-3 years cursing me and my advice.

My point is that the numbers make sense, even with a mortgage. You can't argue agaisnt this point because it's backed up with the cold-hard facts/numbers.

I see that you're very quick to dismiss anyone giving opinions that now's a good time to buy but, when the numbers are there in black and white, you back down because you know they make sense and there's no arguing against them without losing any slither of creditibility your arguments have had thus far.