Actually cheaper to keep renting??!

marathonic

qwert_yuiop wrote: »

Well, you're the one who knows the future, as indicated by your use of the term "WILL". I'm only claiming to know the present, which is a market of depreciation.

Exactly.... due to the inevitable inflation in the future, there WILL be nominal increases in prices from current levels at some point in the future. Will there be real increases? Possibly not - but my mortgage debt will be ate away with inflation too.

qwert_yuiop wrote: »

Depreciation is the same disaster for a buyer anywhere. I'm just astonished your calculations as an NI buyer ignored it when we're witnessing a market reversal that hasn't been seen here since 1919.

I need a house to live in. If that happens to be cheaper through buying than through renting, does it matter that the value of the property is moving up or down?

The only thing that matters is increases in interest rates (which I believe will remain low for a number of years). Over the years, rate rises will have a diminshing impact on me as my mortgage capital is reduced.

The other thing that will impact the numbers is if rent levels decrease. As of yet, I see no evidence of this for the short term and, again through inflation, the long term liklihood is that they will, in fact, increase.

qwert_yuiop wrote: »

As for the crystal ball, I can't see any major boost for the NI economy, and from what I can gather, the London market looks a lot like ours in 2006.

When the major boosts are evident, I imagine that getting into the market at a reasonable reduction from asking prices will be a lot more difficult. I'm a firm believer in not following the herd because, by following the herd, you become nothing but average.

qwert_yuiop wrote: »

Bank valuation seems to be important to you. If I was as staggeringly bad at my job as the bankers are at theirs, I would be in prison.

They're VERY important to me. They are the sole factor that will impact what mortgage LTV products are available to me when my current 2-year discounted mortgage comes to an end.

qwert_yuiop

marathonic wrote: »

That's what it is in my area. BT47 and BT48 postcodes.

£600 on my rented house in Belfast

You are correct. My rates are actuall £1180 - LPSNI valuation is £150,000 and it's in Derry.

£1340 on this house, valuation £225,000. Have to admit I didn't know Derry was such a rip off. Must be all that City of Culture etc.

marathonic

qwert_yuiop wrote: »

£1340 on this house, valuation £225,000. Have to admit I didn't know Derry was such a rip off. Must be all that City of Culture etc.

lol... I don't think the City of Culture had much of an impact. The rates have been high for quite a few years. I believe the City Airport has a major impact on them. It accounts for almost 10% of the councils budget.

qwert_yuiop

Mortgage debt will be eaten away by any inflation - but rates will be raised to match it, and suppress it.

Yes it most certainly does matter if the value of the house is sinking, as previously explained. It's only cheaper to buy than rent as you say if there is no further depreciation. I really was amazed to see you ignore that.

Rents are very likely to sink with any reduction in housing benefit, and with any further deterioration in the economy. Derry is likely more vulnerable than most.

Anyone who bought after 2005 has paid too much.

You wanted to buy a house. You bought a house. Good luck to you, but it was no more justifiable economically than buying a new car or new clothes.

marathonic

qwert_yuiop wrote: »

Mortgage debt will be eaten away by any inflation - but rates will be raised to match it, and suppress it.

5 year fixes are available today at 2.79%. After 5 years, rates can, and probably will, be higher. Your capital owed will be less which will counteract this to a certain extent.

qwert_yuiop wrote: »

Yes it most certainly does matter if the value of the house is sinking, as previously explained. It's only cheaper to buy than rent as you say if there is no further depreciation. I really was amazed to see you ignore that.

Okay, as a homeowner, I pay a mortgage of £360 (on a 30-year term). The only way this will go up is if interest rates rise (which they will eventually). My mortgage payment won't go up if the house price increases or go down if it decreases.

My balance sheet will be impacted by rising/falling prices and that's where the risk is. If prices flatline for 30 years, which is unlikely, I'll have savings on a monthly basis by having saved money on the cost of buying versus renting and I'll own the house outright (albeit, having paid off the capital over the years - which will also be eroded through inflation).

qwert_yuiop wrote: »

Rents are very likely to sink with any reduction in housing benefit, and with any further deterioration in the economy. Derry is likely more vulnerable than most.

Possibly at the lower end. People on housing benefit, in general, don't rent 4-bedroom detached properties.

qwert_yuiop wrote: »

Anyone who bought after 2005 has paid too much.

I paid four times my sole-salary and got a mortgage of about three times it. This is for a four-bedroom, modern house (build 2007). I don't feel I overpaid.

qwert_yuiop wrote: »

You wanted to buy a house. You bought a house. Good luck to you, but it was no more justifiable economically than buying a new car or new clothes.

What are the chances that, in 5, 10 or 20 years time, you'll sell a new car or new clothes for more than you purchased it/them for?

At this point, I think we should agree to disagree - perhaps revisit in a few years to see who was right (and I'm not saying that I will definately be right, I'm just saying that, at current prices, I'm of the opinion that the odds are skewed in my favour).

marathonic

Just to add, I reckon there's a 50/50 chance of prices being higher or lower than current levels by January 2014.

However, I feel there's somewhere closer to a 75% chance that prices will be higher than current levels by January 2018 and, in my opinion, the chances increase as the term increases.

The worst investment at the moment, in my opinion, is cash.

qwert_yuiop

marathonic wrote: »

Just to add, I reckon there's a 50/50 chance of prices being higher or lower than current levels by January 2014.

However, I feel there's somewhere closer to a 75% chance that prices will be higher than current levels by January 2018 and, in my opinion, the chances increase as the term increases.

The worst investment at the moment, in my opinion, is cash.

Good heavens. I suspected you were an estate agent. Now I know you're a bookie.

qwert_yuiop

marathonic wrote: »

5 year fixes are available today at 2.79%. After 5 years, rates can, and probably will, be higher. Your capital owed will be less which will counteract this to a certain extent.



Okay, as a homeowner, I pay a mortgage of £360 (on a 30-year term). The only way this will go up is if interest rates rise (which they will eventually). My mortgage payment won't go up if the house price increases or go down if it decreases.


Of course it won't, but the fact you paid too much though impacts with an excessive monthly cost for 25 years - every single solitary one of those 300 months. Heart breaking, isn't it?





Possibly at the lower end. People on housing benefit, in general, don't rent 4-bedroom detached properties.

Knock on effect?



I paid four times my sole-salary and got a mortgage of about three times it. This is for a four-bedroom, modern house (build 2007). I don't feel I overpaid.

You maybe don't. Mr Market disagrees.


What are the chances that, in 5, 10 or 20 years time, you'll sell a new car or new clothes for more than you purchased it/them for?

Sorry. What I meant was the economic benefits of buying new stuff versus second hand - i.e. none

sinbad182

Quite bizarre how obsessed you seem to be with convincing someone who seems fairly comfortable with their house purchase, that they made a bad decision.

marathonic

sinbad182 wrote: »

Quite bizarre how obsessed you seem to be with convincing someone who seems fairly comfortable with their house purchase, that they made a bad decision.

I've provided counter-arguments to all their claims.

I think it comes down to human nature - look after your own interests.

The minority who are renting with no intention of ever buying couldn't care less.

Anyone who bought at the peak, especially those who find them in a place that doesn't meet their changing circumstances and want to move but cannot due to negative equity will be praying for prices to rise.

Anyone intending to buy but without the salary or deposit to do so will complain about investors propping up prices and keeping them out of the market. They’ll need to continue saving to raise a deposit and, the sooner they realize that this takes sacrifices in their current lifestyle, the better.

Anyone intending to buy but with a risk tolerance below what is required to purchase in a falling market will wait until prices start rising – at which point, the disparity between asking prices and selling prices will diminish and gazumping will, once again, become the subject of conversation. If prices drop 15% from current levels and then start rising, I’d expect the majority of these people to come into the market and end up paying a similar price as that being paid today, i.e. they won’t time the bottom but will jump in on the way back up. If we are already at a bottom, they’ll end up paying 10-15%+ more than what I paid last month.

As my house is a 4-bedroom detached house, it’ll meet any changes in circumstances such as a partner or children. If prices are at a similar level to where they are now in 3-4 years time (plus or minus 5%), I may consider moving to a similar sized house in a more prestigious area. If I had rented instead of buying, any rise in prices would quickly erode this option.


Regarding the comment about 'Mr Market' disagreeing with my decision, that is 100% incorrect. Mr Market dictates that any house is worth what a potential buyer is willing to pay for it. The banks valuation, in this case, was wrong, because they didn't find a buyer to pay this amount. However, as I bought last month, Mr Market agrees with what I paid for it.

In the future, Mr Market may agree or disagree and, in my opinion, is more likely to agree - expecially over the longer term.