Cash buyer near completion... brexit housing crash fears..?

Rosieandjim

Why spend the whole 170,000 on a house could you maybe buy a cheaper property outright and leave yourself a buffer for when/if times become hard?

jonnygee2

I appreciate I have been left a great gift and want to ensure my mother's money is spent as wisely as possible. I wholeheartedly wish i had my mum here and no money, but that isn't the situation i am in.

You get a house that you can live in, rent and mortgage free, with your new family.

In uncertain times few people could say they have this level of security. What more could your mother have wanted?

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House prices could crash. Or they could rise. You don't know. Even if they did crash, say, 10%, then it won't affect you much. You might say 'well we could have bought the house for 10% less', but then finances are always like this (I 'could' have bought £100 worth of bitcoins in 2010 and be a billionaire, I 'could' have invested all my savings in the stock market in 2008 and be 300% up etc). Nothing worth worrying about.

stehouk

I'm in a similar situation but i'm sitting it out until after brexit, i rent but have had mortgages in the past, never really made any profit from property when you add up all the cost's involved, ie:maintenance/repairs, refurbishments, conveyancing/estate agency fees, interest on mortgages, life insurances, buildings/contents insurance, it seems every man and his dog is after my money when iv'e had a mortgage, i'm quite content renting, i have a big chunk of my money on p2p earning between 6-9% and the rest in 3-5% reg savers and 1.5% easy access, coupled with several bank account switches i'm not in a hurry to throw it all in another property in the hope it will increase in value.

andrewf75

stehouk wrote: »

i'm not in a hurry to throw it all in another property in the hope it will increase in value.

That’s not why most people buy a house though. They buy because for roughly the same monthly cost you eventually reach an end-goal of freedom once the mortgage is paid off. Couldn’t care less if my house halves in value as long as every other house does.

lisyloo

it seems every man and his dog is after my money when iv'e had a mortgage, i'm quite content renting

The big difference though is after 25 years (or whatever period) youre costs reduce dramatically and you have an asset.
You can then live rent free for the rest of your life (although insurance, repairs still remain) and if it's a family property you can also avail yourself of downsizing and releasing equity later in life.


So it's in no way equivalent because you missed out the mortgage repayment part which effectively remains your capital.

Herzlos

Yeah it's worth bearing in mind that for almost all mortgages, the payment is split between interest and equity, if the values don't go down much you can take the equity back out. Rent payment will likely be slightly higher but it's all sunk money - there's no equity to get back later.


You can also save a bit by not having to move very often. On the flip side you've got maintenance to deal with (and all too regular big bills - boilers, windows, appliances, etc), and moving takes a lot more time/money since you've normally got to sell the old one first.


I've always viewed buying like renting except I get to stop paying before I retire.

lisyloo

and all too regular big bills - boilers, windows, appliances, etc

I replaced my boiler last year after 14 years.
Replaced a CRT TV that was about 20 years old recently.


Otherwise I haven't had any of these all too regular bills for the last 15 years.


If you move into a victorian house or want to change your decor then that is discretionary.


I don't think you should include life insurance.
That is for paying the mortgage in future so no different to getting life insurance to pay your rent in future.
Contents insurance is also needed in both situations (although may be lower if furnished).



I don't dispute any of these bills exist but do dispute which apply and the size of them. For example £200 building/contents insurance annually isn't very big in the scheme of things.

Herzlos

I've maybe been unlucky but I've replaced more or less my entire (1960's built) house in the last 10 years, so I usually budget/brace for a biggish bill every year.

stehouk

There will always be winners and losers when it comes to property ownership, and i won't argue that if you pay off the 25 year mortgage or 35 years that it takes for today's buyers you may then be able to downsize to a bedsit with the equity and live rent free.

lisyloo

you may then be able to downsize to a bedsit with the equity and live rent free

Not sure why you went a bit extreme to the bedsit there.
My FIL and MIL downsized from a very normal 3-bed semi to a 2-bed retirement flat.
They needed to do this anyway for mobility reasons but it also freed up some cash so they could enjoy a few cruises in their retirement.


No need to go to the extremes of a bedsit/tent :-)
and most people may need something that is easier/cheaper to clean and perhaps without stairs in their 70s/80s perhaps with company, on-site manager, pull cords etc. so it's not just about money but moving to somewhere more safe and suitable.
Most people won't be able to do a lot of DIY in their 80's so might be better of with somewhere easier to maintain/clean etc.


Also if you don't have to commute to work it does open up the possibility of living somewhere cheaper (for housing).


I would say though the main benefit is living rent free for a few decades.