Actual benefit of rising prices - a bulls view

Windofchange

Jack_Johnson_the_acorn wrote: »

You posted this in December 2014..... keep the predictions coming. How much have prices risen since you posted this garbage?????

Yup, Ive been wrong on that one. Reckon we'll have another 12 - 24 months of big gains? It's possible of course but we have Brexit looming and the fed is getting twitchy on interest rates. Guess time will tell.

Jack_Johnson_the_acorn

Windofchange wrote: »

Yup, Ive been wrong on that one. Reckon we'll have another 12 - 24 months of big gains? It's possible of course but we have Brexit looming and the fed is getting twitchy on interest rates. Guess time will tell.

Regarding interst rates I've just fixed for 5yrs at 2.39%.

I don't particularly care about big hpi gains. I'm happy with 0-1% a year, but I've been the recipient of much more than that, but I didn't buy my place primarily as an investment but rather as a home to call my own.

Financially it would of been disastrous to rent rather than buy.

On avg my mortgage payments have been £500 (£425 at present), to rent somewhere similar would have cost more like £700pcm.

I should clear my mortgage and therefore be rent/mortgage all within 10-15 yrs. Leaving me with no housing costs for a likely *hopefully 50yrs.

Why would anyone rent in similar circumstances.....

Windofchange

Jack_Johnson_the_acorn wrote: »

Regarding interst rates I've just fixed for 5yrs at 2.39%.

I don't particularly care about big hpi gains. I'm happy with 0-1% a year, but I've been the recipient of much more than that, but I didn't buy my place primarily as an investment but rather as a home to call my own.

Financially it would of been disastrous to rent rather than buy.

On avg my mortgage payments have been £500 (£425 at present), to rent somewhere similar would have cost more like £700pcm.

I should clear my mortgage and therefore be rent/mortgage all within 10-15 yrs. Leaving me with no housing costs for a likely *hopefully 50yrs.

Why would anyone rent in similar circumstances.....

I'd agree. There are certainly many who will have done very nicely out of all this. I suppose this goes back again to my original moral point though in that are people buying in now going to have a decade of emergency interest rates in order to pay down their mortgage and live freely for 50 years, or are they going to take on a mountain of debt and either take 30 - 40 years to clear it, or get shafted badly IF interest rates go up / house prices come down. Will interest rates stay this low for a decade? Two decades? I'd suggest that even the most optimistic person can't think that is going to happen?

The question is, if you were starting again now, would you buy? To be more precise, would you buy in London? You can rent a decent room in a house share for £650 - £750 a month, or you can pay twice that for a mortgage on a 1 bed, assuming you have a big deposit and a £100k a year job in order to finance it / get accepted in the first place. You then need money for bills and everything else ontop.

You could look at renting currently as a hedge against falling prices. That is still my conviction despite being wrong for the last couple of years. A renter may pay 9k or so a year, but a home owner may lose two, three, four times that if prices go south. You pay your money, you make your choice hey.

economic

Windofchange wrote: »

I'd agree. There are certainly many who will have done very nicely out of all this. I suppose this goes back again to my original moral point though in that are people buying in now going to have a decade of emergency interest rates in order to pay down their mortgage and live freely for 50 years, or are they going to take on a mountain of debt and either take 30 - 40 years to clear it, or get shafted badly IF interest rates go up / house prices come down. Will interest rates stay this low for a decade? Two decades? I'd suggest that even the most optimistic person can't think that is going to happen?

The question is, if you were starting again now, would you buy? To be more precise, would you buy in London? You can rent a decent room in a house share for £650 - £750 a month, or you can pay twice that for a mortgage on a 1 bed, assuming you have a big deposit and a £100k a year job in order to finance it / get accepted in the first place. You then need money for bills and everything else ontop.

You could look at renting currently as a hedge against falling prices. That is still my conviction despite being wrong for the last couple of years. A renter may pay 9k or so a year, but a home owner may lose two, three, four times that if prices go south. You pay your money, you make your choice hey.

renting is also being short housing so you lose if prices gp up. with a large deposit the mortgage of a one bed is no way twice the rent of a flat share. plus flat shares are horrible.

if you have a decent deposit and you found a property you like and will stay there for a while, then theres no better time to buy then today.

westernpromise

Bear in mind that for blindingly obvious reasons rents go up when house prices fall, and vice versa. Renters pay up in a crash, big time

Windofchange

economic wrote: »

renting is also being short housing so you lose if prices gp up. with a large deposit the mortgage of a one bed is no way twice the rent of a flat share. plus flat shares are horrible.

if you have a decent deposit and you found a property you like and will stay there for a while, then theres no better time to buy then today.

If you have a large deposit good for you. As per previous post I don't argue that some people have gained a huge amount from property ownership.

Take the sort of new build one bed London flat for 500k. 20% deposit of 100 grand leaves you a 400k mortgage. According to this site at 3% for the term it will cost you £1897 a month, so nearly three times as much as renting a reasonable room.

This will be different outside of London of course, but this is where I am based and this is the area I know.

Jack_Johnson_the_acorn

Windofchange wrote: »

If you have a large deposit good for you. As per previous post I don't argue that some people have gained a huge amount from property ownership.

Take the sort of new build one bed London flat for 500k. 20% deposit of 100 grand leaves you a 400k mortgage. According to this site at 3% for the term it will cost you £1897 a month, so nearly three times as much as renting a reasonable room.

This will be different outside of London of course, but this is where I am based and this is the area I know.

If you can't afford prime London don't buy in prime London. Simple.

Windofchange

Jack_Johnson_the_acorn wrote: »

If you can't afford prime London don't buy in prime London. Simple.

Is there anything but prime London? What will 300k get you in Zones 1 - 4? Might find yourself a studio.

I agree anyway. I want to get out of London as stated. Other half doesn't, but I want out. Give me a garden, 5 bedrooms and a 45 min commute over where I am now anyday.

economic

Windofchange wrote: »

Is there anything but prime London? What will 300k get you in Zones 1 - 4? Might find yourself a studio.

I agree anyway. I want to get out of London as stated. Other half doesn't, but I want out. Give me a garden, 5 bedrooms and a 45 min commute over where I am now anyday.

you can get a 1 bed in zone 2/3 for 400k. stop making up numbers and look at the facts.

ukcarper

economic wrote: »

you can get a 1 bed in zone 2/3 for 400k. stop making up numbers and look at the facts.

Less than that in zone 3