Any other home buyers in NI?

qwert_yuiop

Only time will tell.

Rent. I've been paying rent to avoid the heartbreak of life as an owner. Worth every penny.

marathonic

qwert_yuiop wrote: »

Only God knows this sort of stuff. Got any tips for Leopardstown?

Correction: God doesn't have a clue - but I know!!!!

Let's face it, anyone that isn't in a position to buy with a mortgage at todays prices will unlikely be in a position to buy without a mortgage over the next 5+ years.

Anyone who can reasonably expect to save to buy with cash should have absolutely no problem paying back any mortgage they obtain today over 5 or 10 years. The interest rates for these terms are 3% and 4% respectively.

If you pay a £100,000 mortgage off over 5 years, it'll have costed £7,812 in interest at 3%. The repayments for this would be £1,796 which is unreasonable for most - except those who could otherwise expect to save enough to buy with cash within those 5 years.

If you pay a £100,000 mortgage off over 10 years, it'll have costed £21,494 in interest at 4%. The monthly repayment would be £1,012 which is well within the reach of anyone who could ever expect to buy with cash.

Bear in mind that you are taking absolutely no risk related to interest rates with the above two options.

Imagine, £1,012 per month for 10 years and you own an asset outright that would normally cost £600 per month to rent (and rising).

Those figures are based on the house I posted in Derry. In other areas, the numbers will be different so lets say a £150,000 house - the repayments would be £1,518 per month for 10 years after which you own the house.

How anyone can see this as a bad deal, I do not know!

marathonic

motorguy wrote: »

Clearly not though.

Theres very clear indications that more people are buying, the economy is recovering and there is movement in the housing market.

Your "exercise" that has led you to conclude you're not buying "today" is because the right house isnt yet available. Thats a very different "exercise" from examining the market conditions and deciding if the market has bottomed out.

As i said, i am glad the Bears on this thread have actually admitted that they have personal reasons not to buy, rather than that market conditions arent right.

I think you're responding to the wrong person here - I have bought in December 2012

GBNI

I'm a FTB and bought my house in December just past when we were talknig to the estate agent (our sale was completed, so I'm fairly sure he wasn't telling us this to get us to put an offer on anything lol) he did say that viewings are really going up, and he has had bidding wars on a few properties. These tended to be aimed at FTB.

marathonic

GBNI wrote: »

I'm a FTB and bought my house in December just past when we were talknig to the estate agent (our sale was completed, so I'm fairly sure he wasn't telling us this to get us to put an offer on anything lol) he did say that viewings are really going up, and he has had bidding wars on a few properties. These tended to be aimed at FTB.

Congratulations on your new home. I think you are right to treat anything an estate agent says with an air of caution but, as the increased viewings can now be seen reflected in a significantly higher number of transactions, the estate agent was obviously being honest in this case.

I’m also seeing some properties on PropertyPal actually being updated with increased asking prices – something that was unheard of for quite a few years.

tara747

marathonic wrote: »

I think we'll agree to disagree. As stated previously, people should do their own numbers - most people who follow this excercise will come to the same conclusions as I have.

Gosh, predicting interest rates with absolute certainty, and now mind-reading... I'm impressed.

motorguy wrote: »

Yes. it is. However its money paid towards owning an asset.

Clearly buying with cash is everyones preference, however not yet having the cash gathered up to buy is a very different reason for not purchasing than "market conditions are not good".

As i said, i'm very glad you've cleared that up for us in the last couple of pages, as there did seem to be an intimation that your reasons for not buying were because you were reading the market in a particular way, not just because you didnt have the money yet.

Not by that definition no. Interest paid towards owning an asset is not the same as paying rent on something you'll never own.

Its dead money because at no time will you ever own the house. Its not yours. It never will be.

All of these are examples of spending money to achieve a goal. Rental payments, relative to the goal of owning a property is dead money. Why pay £600 to rent something long term when you can use that £600 a month to own it?

You dont "rent" food, or perfume or fuel, or a haircut, so clearly your analogy is very wrong - or your grasp of basic concepts.

I understand basic concepts. I was demonstrating other examples of things that people pay for with 'nothing to show for it' at the end, and attempting to inject a bit of humour into the thread.

Why rent rather than buy?

Why buy new cars rather than old bangers?

Why buy designer handbags rather than Primark ones?

Why eat at nice restaurants rather than McDonalds?

Bottom line is, none of us knows what the future will bring, but one thing I do know is that my decision not to buy has served me very well in the last 7 years.

GBNI wrote: »

I'm a FTB and bought my house in December just past when we were talknig to the estate agent (our sale was completed, so I'm fairly sure he wasn't telling us this to get us to put an offer on anything lol) he did say that viewings are really going up, and he has had bidding wars on a few properties. These tended to be aimed at FTB.

I refer you to marathonic's earlier post.

marathonic

tara747 wrote: »

Gosh, predicting interest rates with absolute certainty, and now mind-reading... I'm impressed.

Predicting interest rates is almost as difficult as predicting movement in rental prices - but at least you only have to factor them until the end of the mortgage term as opposed to a lifetime renter - I wouldn't want to hazard a guess of what rents will be on my 80th birthday in 2064.

Of course, some are only temporary renters - if all goes according to plan. But the fact remains that predictions, be it in rates or rent, are a fact of life.

I'm happy enough to go with a long term average of 4%, i.e. the rate determined by a lot of banks internal economists when looking at interest expectations over a fixed period of 10 years.

Of course, I wouldn't opt for a 10 year fix because I expect rates to remain lower in the short-medium term. Therefore, I can opt for a 2% rate and overpay significantly during the beginning - this will blow the argument that very little is paid off capital in the initial years of a mortgage out of the water.

qwert_yuiop

motorguy wrote: »

Yes. it is. However its money paid towards owning an asset.




Not by that definition no. Interest paid towards owning an asset is not the same as paying rent on something you'll never own

Interest paid towards owning an asset makes sense if the asset is gaining value at a higher rate of interest than that paid.

Otherwise it is - yes - dead money. (Or the difference between the 2 figures is anyway)

You could see it as the rent on your loan

motorguy

marathonic wrote: »

I think you're responding to the wrong person here - I have bought in December 2012

Oops. Sorry m8y.

motorguy

qwert_yuiop wrote: »

Interest paid towards owning an asset makes sense if the asset is gaining value at a higher rate of interest than that paid.

Not necessarily.

You could finance a car that is going down in value for say, £500 a month for 3 years. At the end of that term, the asset is yours and has a value.

OR you could rent the car for £500 a month, and have nothing at the end of it.

Given the current pricing of houses, its not an unreasonable step to think in 25 years time it will be worth more than you paid for it.

I would contend actually, that given pretty much ANY 25 year span, a house is likely to be worth more than you paid for it. (it will be interesting to see if that holds fast for those who bought in 2007)