Is now a good time to buy a house outright?

Legacy_user

Anyone have a crystal ball...will prices increase/decrease in the next 5 years?


Not planning on buying in London...as I have a brain

N1AK

It seems like a very poor time to buy outright to me. Mortgages can be gotten with interest rates far below returns on other investments and even some savings.

As to whether it is worth having more property exposure I'm unsure. Owning property to reside in still seems like a good bet due to the relative savings vs renting. Further property investment seems less clear cut, prices are likely to rise (imo) but then so are interest rates (imo) and we've seen some anti-BTL measures already so who knows if more are coming.

TheeMaskedTurnip

Do you prefer to feel like a proud HO or a dejected RFL?

HappyMJ

berbastrike wrote: »

Anyone have a crystal ball...will prices increase/decrease in the next 5 years?


Not planning on buying in London...as I have a brain

Why discount London?

London property can give you better capital growth at the expense of income.

Taxes on capital gains are much more favourable than taxes on income so you could actually get more profit in London than elsewhere.

mwpt

HappyMJ wrote: »

Why discount London?

London property can give you better capital growth at the expense of income.

Taxes on capital gains are much more favourable than taxes on income so you could actually get more profit in London than elsewhere.

When yields are squeezed so badly, at what point do you cease to find the greater fool to provide the capital growth? I'm not saying it is now, but it must be at some point.

movilogo

Ask the question differently. Assuming you do have the money to buy outright, what rate of return you can get by investing the money in to some other scheme?


If that scheme offers better return than your mortgage interest payment, then don't buy outright and take mortgage.


Else buy outright.

CLAPTON

it seems to me house price will drop everywhere, other than London and the SE

HappyMJ

mwpt wrote: »

When yields are squeezed so badly, at what point do you cease to find the greater fool to provide the capital growth? I'm not saying it is now, but it must be at some point.

London will cease to find the greater fool when the greater fool is prevented from moving to London. As the UK government cannot stop immigration from the EU especially from skilled EU migrants who can find a decent well paying job in London and have absolutely no interest in claiming social welfare benefits then I personally can't see this happening any time soon.

cells

In my view if you live in the north or Midlands and are renting it looks like a very good time to buy. Prices in a lot of those places have been flat for a decade and affordability is good

westernpromise

It's only a good time to buy if you consider house buying to be financial speculation in which your wits and cunning will enable you to snap up a bargain either by waiting or by not waiting.

If you think of like an MSEer, any time is a good time tio buy because within a few years you overtake renting economically. By a few years I mean the time horizon appropriate to a decision of this magnitude.