HPC thread of the week

westernpromise

Those people must be awful to live with: the endless stream of negativity about why things can't be done. Carpets every 10 years! Better not buy then! !!!!!!.

It's actually a zombie thread someone has dug up, "Wonder[ing] what happend to QEJunkie". I can tell them exactly what happened to QEJunkie: he got banned for disagreeing with Venger and being right.

If you look at HPC posters, people like QEJunkie - who suggest that buying is smart, or that the HPC massive are wrong about something - always have a post count of 40 or 50. That's how long they took to get banned. The crashtrolls meanwhile go on for thousands of posts.

thequant

westernpromise wrote: »

Those people must be awful to live with: the endless stream of negativity about why things can't be done. Carpets every 10 years! Better not buy then! !!!!!!.

It's actually a zombie thread someone has dug up, "Wonder[ing] what happend to QEJunkie". I can tell them exactly what happened to QEJunkie: he got banned for disagreeing with Venger and being right.

If you look at HPC posters, people like QEJunkie - who suggest that buying is smart, or that the HPC massive are wrong about something - always have a post count of 40 or 50. That's how long they took to get banned. The crashtrolls meanwhile go on for thousands of posts.

Funnily enough, around the same time I did a similar back of the envelope calculation about buying. When I did the figures it shocked me and made me realise that greater london was ultra cheap and another boom was on the horizon.

Not long after started looking and eventually bought, before the boom kicked in.

On a interest only V rent comparison, my place is £800 per month versus rental value of £1600.

interest would have been much lower if I hadn't locked in a 3.19% fix over 5 years.

forget all this crap about house price to wage ratio, the best measure of if a place is over/under priced is check the rental yield V interest payment.

Simple fact is if you dont buy the place to save money on the difference, someone else (aka LL) will buy the place to make money on that difference.

westernpromise

thequant wrote: »

Funnily enough, around the same time I did a similar back of the envelope calculation about buying. When I did the figures it shocked me and made me realise that greater london was ultra cheap and another boom was on the horizon.

Not long after started looking and eventually bought, before the boom kicked in.

On a interest only V rent comparison, my place is £800 per month versus rental value of £1600.

interest would have been much lower if I hadn't locked in a 3.19% fix over 5 years.

forget all this crap about house price to wage ratio, the best measure of if a place is over/under priced is check the rental yield V interest payment.

Simple fact is you dont buy the place to save money on the differnce, someone else (aka LL) will buy the place to make money on that difference.

Indeed, although another factor that drives rents is the direction of property prices. The alternative to renting is buying so if there are capital gains to be had renting looks less attractive whereas if losses look likely renting does well.

Your 3.19% is better than my 10-year 3.89%, but although I thought lower rates were imminetn I'd have had to wait to post MMR to apply and then I'd have had to disclose all the school fees I'm paying so I might not have got a rate as low as 3.89% by that point...

westernpromise

mwpt wrote: »

In the time I've owned my house (just under two yeas) I've spent:
- £180 to have some minor roof repairs done
- £100 on a ladder to fix a gutter which had sagged and was causing damp in the rendering
- £90 on drill and bits to do the job
- £0.53 on PTFE tape to fix a leaking radiator
- £150 on a lawn mower
- £500 on a fridge (estimated)
- £500 on a dishwasher (estimated)
- £10 on products to unblock my outside drain
- £200 on paint and tools
- £45 on saucepan rack
- £100 on gardening stuff (soil, gravel, tools, etc)
- A lot on furniture
- Must be a lot else I'm not remembering

(Oh and time to do the jobs, which I value highly, though fixing suff yourself is also rewarding)

So far, no big expenses, but the little stuff does add up. I budgeted £1500 pa (over long term) for housing maintenance when I costed everything making the decision to buy vs rent. Not sure if I over or under estimated.

So your house has been an appalling investment then. You have to spend literally hundreds of pounds on it, when you could have had a landlord doing it all for nothing apart from the rent - and you've got a huge mortgage debt over you, which is unfair on young people.

I think those are the main boxes ticked?

I PMSL at that new roof every 30 years thing too. My parents bought their 1928 house 45 years ago and the surveyor warned them then it needed a new roof. It's still going strong.

mwpt

thequant wrote: »

Funnily enough, around the same time I did a similar back of the envelope calculation about buying. When I did the figures it shocked me and made me realise that greater london was ultra cheap and another boom was on the horizon.

Not long after started looking and eventually bought, before the boom kicked in.

On a interest only V rent comparison, my place is £800 per month versus rental value of £1600.

interest would have been much lower if I hadn't locked in a 3.19% fix over 5 years.

forget all this crap about house price to wage ratio, the best measure of if a place is over/under priced is check the rental yield V interest payment.

Simple fact is you dont buy the place to save money on the differnce, someone else (aka LL) will buy the place to make money on that difference.

While that is true, you are taking a relative gamble on interest rates. There is a reason prices can be many more multiples of wages higher but mortgage payments still roughly track rents. Extremely low rates. Which means asset prices are very sensitive to interest rates.

I took the gamble, but I'm aware that I'm doing it. I fixed at lower rate for two years instead of five because after looking at the amount of housing debt around London, Osborne needing growth, I figured the last thing he'd want is people paying higher mortgages just then. I have to reassess mid year and at this point I'm undecided. The BTL changes may be a warning that the housing market, and interest rates, are not untouchable. I'll probably go for a five year fix and forget about it.

Rich2808

Probably time to depart from the thread as it looks like the usual suspects have returned home from nursery school.

All terribly juvenile to be attacking posters on other forums or even other forums themselves. Shows you really can't have any sort of serious debate in this thread.

thequant

westernpromise wrote: »

Your 3.19% is better than my 10-year 3.89%, but although I thought lower rates were imminetn I'd have had to wait to post MMR to apply and then I'd have had to disclose all the school fees I'm paying so I might not have got a rate as low as 3.89% by that point...

I was in the similar boat, except my fear was remortgaging post MMR so a 2 year fix was risky (i essentially got a self cert mortgage), so took 5 year fix with higher rate.

thequant

mwpt wrote: »

While that is true, you are taking a relative gamble on interest rates. There is a reason prices can be many more multiples of wages higher but mortgage payments still roughly track rents. Extremely low rates. Which means asset prices are very sensitive to interest rates.
.

Indeed I was very much, hence also a factor in taking out a 5 year fix.Rates would have had to risen far higher than anyone was expecting for me to have been worse off in terms of expected rent rises over than time plus savings of interest against rent during that time.

ultimately at any time when buying we are taking a risk, but it does help to understand the fundamentals of what you are buying in terms of an asset and an implied income, to calculate if you are obtaining any "value"

cells

westernpromise wrote: »

Indeed, although another factor that drives rents is the direction of property prices. The alternative to renting is buying so if there are capital gains to be had renting looks less attractive whereas if losses look likely renting does well.

Your 3.19% is better than my 10-year 3.89%, but although I thought lower rates were imminetn I'd have had to wait to post MMR to apply and then I'd have had to disclose all the school fees I'm paying so I might not have got a rate as low as 3.89% by that point...

re mortgaging can be expensive especially if you jump lender I cant be bothered to go dig up the file but from memory the last one i did which was from one lender to another

solicitors ~£450
Old mortgage release fee ~£250
valuation and booking fees ~£600
Product fee on mortgage £2000

People can look at the headline interest rate figure on 2 year rates but forget they may need to jump lenders 5 times and those fees are not cheap plus the time and agro.

That does not mean 2 year rates are not worth it, just factor in everything

cells

thequant wrote: »

Funnily enough, around the same time I did a similar back of the envelope calculation about buying. When I did the figures it shocked me and made me realise that greater london was ultra cheap and another boom was on the horizon.

Not long after started looking and eventually bought, before the boom kicked in.

On a interest only V rent comparison, my place is £800 per month versus rental value of £1600.

interest would have been much lower if I hadn't locked in a 3.19% fix over 5 years.

forget all this crap about house price to wage ratio, the best measure of if a place is over/under priced is check the rental yield V interest payment.

Simple fact is if you dont buy the place to save money on the difference, someone else (aka LL) will buy the place to make money on that difference.

i was a member of a different forum credit crunch which discussed housing quite a lot and during 2011-2012 I also said buying makes a lot of sense as mortgages are half the price of rents.

most disagreed and like hpc said london prices were too high already.

3-4 years on and London prices have boomed in some cases nearly double what they were.


Going forward, mortgages are still cheaper than rents even if you lock in a more expensive 5 year fix