House price crash-don't make me laugh

manhattan

Actually i dont know why im getting all worked up here?

I pay £290 a month rent for a house that would cost around £800 to buy at the minute.
We are able to purchase the house at a discount (homebuy) and we have a 25+% deposit waiting for the right time to go ahead and buy it!

GreyPilgrim

I spent ages getting rid of all my debts (had a great time building them up, i admit!), and the future goal was to eventually save enough to be able to buy a house eventually. I've spent ages thinking that I'm some sort of failure because everyone around me seems to own rather than rent. But to be honest, I'm not really bothered anymore. I live in a (admittedly crappy) area, but the rent is cheap and it's letting us save. Its a housing association property, so it's slightly more secure than a private landlord.

Right now I'm happy to be ploughing as much as I can into my ISA's and saving accounts and to just 'see what happens' over the next couple of years.

If the ar*e falls out of the market, I'll buy my seven bedroom country pad for £7.50, and if it doesn't I'll still be living in my rented house for the next couple of years but with a decent pot of money in the bank.

It's kind of funny watching the homeowners denying all possibilty of a house price crash, and then watching the wannabee owners saying it's a 100%. Surely there's no way of predicting either, and everyone is just trying to convince themselves?

Lavendyr

Turnbull2000 wrote: »

Rent: £500pm, fully furnished and excellent maintenance from landlord.

To Buy (going by other listings in area - Tynemouth): 135K, 25 years @ 6.5% IR £922pm

*nods*

Identical property in area currently on market for £219,950.

To rent:
- £750pcm, unfurnished but excellently maintained and managed.

To buy: 198k (assuming 10% deposit) borrowed over 25 years @ 6%:
- Interest Only: £990
- Repayment: £1291
- Maintenance & repair costs

With a disparity like that, it's pretty clear why OH and I prefer to rent?

GreyPilgrim

manhattan wrote: »

I pay £290 a month rent for a house that would cost around £800 to buy at the minute.
We are able to purchase the house at a discount (homebuy) and we have a 25+% deposit waiting for the right time to go ahead and buy it!

Thats pretty much the same figures as I'm working on. Our rent is £270 a month, but we only pay it for 11 months a year (we get a free 'month' if there are no arrears). if we bought, we would have to cancel the idea of saving anything. That just doesn't seem sensible to me at the moment.

Lavendyr

silvercar wrote: »

If you keep waiting those "few years" you will never be in a position of having a 25 year repayment mortgage and owning your own home outright before retirement.

I'm 24, I've got a fair few years in front of me yet before that becomes an issue. Not to mention that if OH and I ever do buy, we will take an option where we can overpay and overpay - and of course will have to borrow less in the first place because we will have put together a much bigger deposit than we would be able to if we were to try and buy now, so we could potentially borrow over 20 or even 15 years instead.

GreyPilgrim

Lavendyr wrote: »

I'm 24, I've got a fair few years in front of me yet before that becomes an issue. .

You've got 9 years advantage over me you young whippersnapper.

Still, in the absence of a time machine, whinging aint going to make things better, is it

nicola1982_2

silvercar wrote: »

Two reasons to buy your home:

1) so you don't have to move every 6 months/ year on a landlord's whim;

2) so you have a cost free place to live in retirement.

And two reasons to rent:

1) Your life is likeley to change in 6-12 months (addition to family, job transferring you elsewhere etc)

2) Buying would result in you being unable to afford repayment resulting in possible bankruptcy and leaving you worse off than if you had waited until you got a better job/partner to share the mortgage with/prices go down

I don't think either is 'better' than the other, different people have different lives and I've seen way too many people make their own lives difficult by trying to fit into somebody else's mould.

baby_boomer

Yes.

Time to move away from the home owning democracy that all three political parties support because they want to be the heirs to Maggie..

GreyPilgrim

The one other thing that makes me nervous of buying a place, is suddenly finding out:

a) there's something seriously wrong with the house that wasn't noticed and isn't covered by your insurance
b) a bunch of Clampetts move in next door to you and make your life a nightmare
c) the area suddenly degenerates into some kind of Hell's Kitchen.

At least with renting, it's someone elses responsibility and you can up sticks and leave rather quickly. Saw a chap on the news last night whose nice clifftop house is going to be a halfway across the Irish Sea in about six months due to coastal erosion.

Poor Sod

nicola1982_2

baby_boomer wrote: »

Yes.

Time to move away from the home owning democracy that all three political parties support because they want to be the heirs to Maggie..

Lol - whenever I hear her called Maggie it makes me think of that Maggie May song!