Is buying a house a good idea?

Crashy_Time

Filo25 wrote: »

To be fair to the HPC crew they did successfully predict the last 2 house price crashes, admittedly they also predicted another couple of hundred crashes that didn't happen as well...

With regards to the original question, I think my only advice would be to save as if you were buying, having the flexibility of that cash in the future will only help even if you subsequently decide buying a house might not be for you.

If there is one piece of advice I wish I could give my younger self it would be to embrace the joys of deferred gratification, save more spend less and you open up a lot more options in your future.

They did also predict that the bailouts would have far reaching political/social effects, guy on Bloomberg just now saying that this fallout is just getting started. When rates are forced up house prices will be under pressure, so the OP should discount to get a sale now IMO.

Filo25

Crashy_Time wrote: »

They did also predict that the bailouts would have far reaching political/social effects, guy on Bloomberg just now saying that this fallout is just getting started. When rates are forced up house prices will be under pressure, so the OP should discount to get a sale now IMO.

Probably depends on how fast and how far you think rates are going up, as to how significant that impact is likely to be.....

Olon1974

It is so much easier when you realize the shortest possible term of you saving enough in order to buy a house is about 20 years lol
So I go travel and hope for a lottery.
BTW, I'm not strong in math, neither in finance, doesn't it look like renting an apartment is actually cheaper than owning it?

hazyjo

You're making too much out of it anyway Crashy. Most people fix their rates, and it's not going to jump to even 5% overnight. They'll fix for longer terms if it looks to be creeping up, banks will be more cautious as to what they lend in relation to salaries, and people do usually get payrises. In ten years' time I'll probably be earning another £10k-15k to what I am now despite not being a high earner (legal sec). It makes a massive difference to affordability.

hazyjo

Olon1974 wrote: »

It is so much easier when you realize the shortest possible term of you saving enough in order to buy a house is about 20 years lol
So I go travel and hope for a lottery.
BTW, I'm not strong in math, neither in finance, doesn't it look like renting an apartment is actually cheaper than owning it?

Are you talking buying cash? That's why most people buy with a mortgage (especially to start with)!

Crashy_Time

hazyjo wrote: »

You're making too much out of it anyway Crashy. Most people fix their rates, and it's not going to jump to even 5% overnight. They'll fix for longer terms if it looks to be creeping up, banks will be more cautious as to what they lend in relation to salaries, and people do usually get payrises. In ten years' time I'll probably be earning another £10k-15k to what I am now despite not being a high earner (legal sec). It makes a massive difference to affordability.

Again begs the question of why emergency rates for so long if affordability is so easy?

dunroving

Olon1974 wrote: »

It is so much easier when you realize the shortest possible term of you saving enough in order to buy a house is about 20 years lol
So I go travel and hope for a lottery.
BTW, I'm not strong in math, neither in finance, doesn't it look like renting an apartment is actually cheaper than owning it?

Well, my "rent" (mortgage interest) on a 3BR semi-detached for the past 10 years has been about £100 pcm. Obviously, when mortgages were at 15% interest, or whatever they were back in the 1980s (I did own a mortgage back then, but can't recall), the figures would have been different, but for anyone who either already "owned" (mortgaged) a house in the past 10 years, or like me, bought one just before the last "crash", it's been a no-brainer.

Just in the past 10 years, I'd probably have paid £84,000 in rent. Instead, when I complete on my house in about a month, I'll net over £90,000. I know which scenario I prefer.

Filo25

Crashy_Time wrote: »

Again begs the question of why emergency rates for so long if affordability is so easy?

Emergency rates because the broader economy remains relatively weak, we have never fully recovered from the GFC, also unlike in the US we have seen very signifcant fiscal tightening over the course of this decade, which helps to explain why the path for UK rates may not necessarily be the same as for the US.

I know over on HPC housing is the reason for everything, and cutting rates has been tantamount to fraud, but while it obviously is one driver its certainly not the only one for monetary policy.

That said if we did start to see the massive fall in house prices in response to rate rises that the HPC crowd continually salivates over, why wouldn't the bank just cut rates again?

buggy_boy

Filo25 wrote: »

Emergency rates because the broader economy remains relatively weak, we have never fully recovered from the GFC, also unlike in the US we have seen very signifcant fiscal tightening over the course of this decade, which helps to explain why the path for UK rates may not necessarily be the same as for the US.

I know over on HPC housing is the reason for everything, and cutting rates has been tantamount to fraud, but while it obviously is one driver its certainly not the only one for monetary policy.

That said if we did start to see the massive fall in house prices in response to rate rises that the HPC crowd continually salivates over, why wouldn't the bank just cut rates again?

No no, don't you know when rates fall its to fraudulently increase property prices, but when they rise there will be no stopping it because of [Insert crazy logic here]

Pupnik

I would say buy but buy sensibly, in an area that has not reached its cap (ie not London, not an expensive luxury new build), but only if you!!!8217;re intending on staying in that area. The thing to remember is house prices go up and down, if property prices crash they will stabilise and recover eventually (probably) so in the long term you are bound to get your money back. I!!!8217;d say make sure you can afford the mortgage repayments even if interest rates increase so give yourself some wiggle room, can you afford it on 5% interest, 7%? 10%