Is buying a house a good idea?

buggy_boy

Crashy_Time wrote: »

Nah, they just encouraged people to keep on borrowing a while longer, making the eventual depression worse.

Really, cause the stats say the opposite....

https://tradingeconomics.com/united-kingdom/households-debt-to-income

Like all your predictions they are complete rubbish, yes we may "eventually" have a depression but thats like saying the stock market will crash... It is meaningless unless you put a timeframe its like predicting day will follow night.

buggy_boy

Crashy_Time wrote: »

I sometimes feel very humble in the shadow of the immense economic wisdom that is present on here sometimes, I really do.

Thank you for your ever so useful comments, if you had read the entire thread you would have seen it was a reference to previous advice of dont buy somewhere at the peak... If you have nothing useful to add don't add anything.... In actual fact do everyone here a favour and go back to HPC...

getmore4less

Long term even buying at a peak will be cheaper than renting.

Buying at a peak can have short term issue like moving but unless there is a crash in rents(which needs a crash in wages as rent is driven by earnings not borrowing) it will always be cheaper to buy long term.

Crashy_Time

getmore4less wrote: »

Long term even buying at a peak will be cheaper than renting.

Buying at a peak can have short term issue like moving but unless there is a crash in rents(which needs a crash in wages as rent is driven by earnings not borrowing) it will always be cheaper to buy long term.

Buying at peak (are we there yet? :rotfl:) and getting caught out as interest rates start rising will be a far far bigger headache than renting:eek:

shirlgirl2004

Crashy_Time wrote: »

Buying at peak (are we there yet? :rotfl:) and getting caught out as interest rates start rising will be a far far bigger headache than renting:eek:

You do know 80% of new mortgages are fixed don't you? It's possible to fix for 10 years now which would ride out any crash/interest rate rises.

buggy_boy

Crashy_Time wrote: »

Buying at peak (are we there yet? :rotfl:) and getting caught out as interest rates start rising will be a far far bigger headache than renting:eek:

The problem is trying to guess where the peak is, I bought a house 5 years ago for £166k, I thought that was crazy and was worried I bought at the peak, its now worth £240k. you thought the peak was years ago and have been spending a fortune on rent while prices have risen.

My recommendation buy when you can afford but don't stretch yourself too far, have a look at HPC for people that have been trying to guess the peak for a decade and are now buying, they have lost out by £200k+ (increase in house price and rent paid). Don't try to be too clever or you will end up on here trying in vein to create a crash being bitter and twisted... Better to be happy and get on with your life.

shirlgirl2004

buggy_boy wrote: »

The problem is trying to guess where the peak is, I bought a house 5 years ago for £166k, I thought that was crazy and was worried I bought at the peak, its now worth £240k. you thought the peak was years ago and have been spending a fortune on rent while prices have risen.

My recommendation buy when you can afford but don't stretch yourself too far, have a look at HPC for people that have been trying to guess the peak for a decade and are now buying, they have lost out by £200k+ (increase in house price and rent paid). Don't try to be too clever or you will end up on here trying in vein to create a crash being bitter and twisted... Better to be happy and get on with your life.

You can have an educated guess when the peak will be but that will differ in the different regions of the country. Also I'm confused when people say peak because it will peak for this property cycle before the next cycle starts. Historically the trough of each crash is still at a higher price than the last trough and similarly for the peak.

westernpromise

There's a discussion of this matter here:
https://forums.moneysavingexpert.com/showthread.php?t=5398321

Essentially the longer you rent for while waiting for a crash, the bigger the crash has to be. Eventually you will need a price crash of more than 100% in order to come out ahead through having rented.

Crashy sold to rent 22 years ago, and as far as we can tell, he needs prices to fall by about 130%. That is, he rents a place in Edinburgh that's worth about £50k. He has done so for so long that for renting rather than buying it to make sense now, he needs its price to fall to -£15,000. Put another way, he needs it to fall to £0, and for the seller to leave a brown envelope with £15,000 in cash inside in the house as part of the sale at £0. If he could buy it on those terms he would be at par with what he's spent on rent.

That's without considering that as a renter, he is still looking at a lifetime of rent - another 30 years or so. As a buyer, once the property is paid for, it's paid for, and you live in it for nothing.

shirlgirl2004

westernpromise wrote: »

There's a discussion of this matter here:
https://forums.moneysavingexpert.com/showthread.php?t=5398321

Essentially the longer you rent for while waiting for a crash, the bigger the crash has to be. Eventually you will need a price crash of more than 100% in order to come out ahead through having rented.

Crashy sold to rent 22 years ago, and as far as we can tell, he needs prices to fall by about 130%. That is, he rents a place in Edinburgh that's worth about £50k. He has done so for so long that for renting rather than buying it to make sense now, he needs its price to fall to -£15,000. Put another way, he needs it to fall to £0, and for the seller to leave a brown envelope with £15,000 in cash inside in the house as part of the sale at £0. If he could buy it on those terms he would be at par with what he's spent on rent.

That's without considering that as a renter, he is still looking at a lifetime of rent - another 30 years or so. As a buyer, once the property is paid for, it's paid for, and you live in it for nothing.

I do feel for anyone that bought into the hype that house prices would crash and they'd be able to buy a house for peanuts. The only place that is true is in a few places like Doncaster where jobs are sparse and low paid. It's not too late for Crashy to put his money into property and see a reasonable growth but of course he'll have needed to save for his deposit.

Crashy_Time

shirlgirl2004 wrote: »

You do know 80% of new mortgages are fixed don't you? It's possible to fix for 10 years now which would ride out any crash/interest rate rises.

Say there is a crash, and someone has a fixed rate, and interest rates have gone up to protect the currency, or to follow the U.S, or because countries want to leave the euro, or for another reason, and you want to sell and move in five years? Can you tell us how that works?