Buy now or wait?

meanmachine_2

Remember, 1993 is exactly like today.

House prices were 10 times average income (in fact they were closer to 2.5 times income)

You could flog a second hand motor for a few grand and that would be enough for a 10% deposit (currently 20K on an average property)

interest rates are rising... (in fact they were falling, unlike now).

I could go on, but I'm feeling too "weedy" and must lie down.

meanmachine_2

Tiger_greeneyes wrote: »

Words actually fail me! Go and pick on someone else, meanmachine, you're boring me to tears.

No, I'm merely asking you: is 4.5x a single income the same as 5 times a joint income?

Well? Is it?

olive84

Thanks T_G_E, me and my bf are definately making the right decision for us :j

We're borrowing 3.5x not 5 as previously posted, and have a fixed rate for 3 yrs. We could also afford to make overpayments during that period, and pay the mortgage if interest rates were really high at the end of the fixed rate period. TBH, you have to do what feels best for you at the end.

Tiger_greeneyes

jyonda wrote: »

I'd like to know:

1. How many times your equivalent salary does it cost today?
2. Would the equivalent value of the car be a big enough deposit now?
3. What if the market had not gotten better and had in fact got worse?

I'm just curious mind, I'm not looking for an argument!

I'm not sure what you mean in point 1?

2. I sold my car for £650 and put it with my savings to make up my deposit - having my own home meant more to me than having a car!

3. I had thought about that - I rationalised that a flat in London would always be worth a minimal amount, and that it wasn't going to go that much below the £32k that I paid for it! I was also running a survey office at the time and had a good understanding of the market. It also helped that I worked for a building society and got a mortgage at staff discount rates - otherwise I'd never have been able to get a 4.5 x mortgage.

Where I live now, housing is very affordable compared to Britain's hot spots. If my partner and myself both earned £15k a year each, we'd be able to get a mortgage at 3.5 x joint that salary, and easily be able to afford to buy a 3 bedroom house.

I moved away from the south East because I refused to pay the house prices there.

Tiger_greeneyes

olive84 wrote: »

Thanks T_G_E, me and my bf are definately making the right decision for us :j

We're borrowing 3.5x not 5 as previously posted, and have a fixed rate for 3 yrs. We could also afford to make overpayments during that period, and pay the mortgage if interest rates were really high at the end of the fixed rate period. TBH, you have to do what feels best for you at the end.

You certainly do! You sound as though you're in a really favourable position too I've always been a believer in making your money work for you, rather than you working for the money. I look forward to the housewarming party

Tiger_greeneyes

meanmachine wrote: »

No, I'm merely asking you: is 4.5x a single income the same as 5 times a joint income?

Well? Is it?

Firstly, your aggression is bordering ridiculous - this is an internet forum! Additionally, this will be my last reply to you unless you grow up a bit.

My opinion is that a 4.5x single income is riskier than 5x joint, for the simple reason that with a joint mortgage, if one of the borrowers lose their job, they've still got one income coming in - hard as it may be to make ends meet. A single borrower simply doesn't have that luxury.

meanmachine_2

OK, let's call a truce.

I'm not being aggressive. My style is typically direct. But i'm rarely angry when posting.

I don't think borrowing 3.5x joint is risky, but I do think 5 times joint is, and would severely impact on the lifestyle of that couple.

If one of them fell pregnant, the couple would be in dire straits.

I do think you have every right to give advice.

I'm merely suggesting your experiences are coloured by you buying at - in hindsight - a very smart time in the property cycle.

That's all.

Is our truce maintained?

Tiger_greeneyes

I can deal with a truce

As for my buying at a good time in the property cycle - it was nothing to do with me biding my time and watching the market, it was more that I had got a job in a building society at better wages than I'd had before - it was the right time for me personally, rather than me looking at it being an investment.

mystic_trev

I'm a value Investor, which means I'll buy (almost) anything if I think it's a good Investment. This is how I've been making a living for the past 11 years and it's a hobby as well as a way of making money. I've two BTL properties with the first being bought when I gave up work. This has now almost quadrupled in value and my other trebled! They were purchased for income with long term growth. My view of the market is that it's very over hyped. At best people can expect much smaller returns in the future, at worst they'll be a slump. As meanmachine has mentioned, this is begining to feel like the late 80's all over again,and I've got a nasty feeling that our debt ridden Nation is about to come unstuck. It looks like IR could reach 6% by year end - which is what the money markets are pricing in.Nearly 40% of Fixed rate mortgages are due for renewal this year and many of those were stretched when they took the cheap deals out!

As I've said - I'm a Value Investor - there's no value in this current market.

All IMVHO

Edit - From todays Economist.

http://www.economist.com/world/britain/displaystory.cfm?story_id=9117024

kingkano

meanmachine wrote: »

If one of them fell pregnant, the couple would be in dire straits.

True. I'd never recommend somebody to do it as a FTB without a decent deposit and some savings behind them. I am probably looking at 5x joint for our house, BUT, we are keeping 15k in savings for any problems.

To be fair, birth control is fairly reliable now, and I think most people can capably plan when is the right time to start their family (if there ever IS such a right time!)