Worried about overpaying on house purchase

eidand

ok, where are the mods?
Can you please stop derailing threads? We don't need a million threads about the same thing. Stop answering the troll, nobody cares what he says or clarifies. Stay on topic please. And  mods, for the love of god, can you not do something to clean up this mess?
People come here to get some help, so help them.

Davesnave

Yes, most people on this thread have suggested buying now could be OK if sufficient account is taken of the the property's long term suitability. Only the OP knows enough about their personal circumstances, so we cant comment on those. Seems a moderate response to me.

But now we have a suggestion that a major investment could return 11% at a time of world turmoil, instead of putting the money into a home. Well, sure, it could, for a time, but how lucky does the OP feel and is this a moderate, measured response, or just something thrown out here to impress? Will holding a portfolio of investments sit easily with the OP and make other things in their life possible? Perhaps that's something they can answer, but it's certainly something Crashy doesn't know.

Crashy_Time

Davesnave said:

Yes, most people on this thread have suggested buying now could be OK if sufficient account is taken of the the property's long term suitability. Only the OP knows enough about their personal circumstances, so we cant comment on those. Seems a moderate response to me.

But now we have a suggestion that a major investment could return 11% at a time of world turmoil, instead of putting the money into a home. Well, sure, it could, for a time, but how lucky does the OP feel and is this a moderate, measured response, or just something thrown out here to impress? Will holding a portfolio of investments sit easily with the OP and make other things in their life possible? Perhaps that's something they can answer, but it's certainly something Crashy doesn't know.

The point I made was that "putting your money into bricks and mortar" now is not a sensible alternative to a well structured diversified portfolio of equities, bonds, corporate bonds etc. with maybe some cash on hand ( I like to keep about 18 months living expenses in cash, many may disagree and say this is too much but the psychological benefits are excellent, especially in difficult times) Your original quote seemed very clear that this is what you were suggesting and all I did was challenge that type of thinking which does seem to get trotted out quite a lot on here you must admit? Someone worried about overpaying should monitor what the banks are doing and make their decision from there IMO.

badger09

badger09 said:

Crashy_Time said:

Davesnave said:

Crashy_Time said:

Davesnave said:

When we bought in the depths of the last recession (2009) it was because of doomsayers suggesting world finance was in a downward plunge from which there was no escape. We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites.

So, although it wasn't something we loved, we bought something with the potential to be a home for a long time. We're still here and although it's not perfect, our home's fine if the current crisis proves longer term than anyone in the mainstream supposes.

Two years? Pft! Imagine living there for at least 7 years and then decide.

When will you accept that you were wrong on that? Don`t think I have heard of anyone losing money from a bank since 2008, and they were all compensated in full? The problem with a house is that it is illiquid, unlike a bank account or investment account where you can for the most part get at the money when you need it, and IMO suggesting that putting money into a house can substitute for savings/diversified investments is poor financial advice.

I was pointing out that doomsayers have always been around, stirring-up fear. It's OK for you with your 20:20 hindsight, but having money in banks which crashed was extremely unsettling to the ordinary person. It was a novel situation and we were not taking much risk deciding to buy another long term home, as it's what most of us want anyway, particularly at our time of life.

Where did I suggest we bought a house as a substitute for savings, investments, pensions etc? We bought a place within our means and only used savings to develop it later when things were clearer; hence my emphasis on looking at potential for the longer term.We still have savings and some investments, but we all know what many of them are doing at the moment!

My main investment account is returning about 11% at the moment.

This suggested to me that the house was a substitute for savings..... "We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites."

Would you care to clarify that 11%?
Is that per annum? Since 1/1/2020? Total since 1/1/2015? Total since 1/1/2000?  Over what period?
Without context, that figure is meaningless.

@Crashy_Time

any chance of a reply?

Crashy_Time

badger09 said:

badger09 said:

Crashy_Time said:

Davesnave said:

Crashy_Time said:

Davesnave said:

When we bought in the depths of the last recession (2009) it was because of doomsayers suggesting world finance was in a downward plunge from which there was no escape. We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites.

So, although it wasn't something we loved, we bought something with the potential to be a home for a long time. We're still here and although it's not perfect, our home's fine if the current crisis proves longer term than anyone in the mainstream supposes.

Two years? Pft! Imagine living there for at least 7 years and then decide.

When will you accept that you were wrong on that? Don`t think I have heard of anyone losing money from a bank since 2008, and they were all compensated in full? The problem with a house is that it is illiquid, unlike a bank account or investment account where you can for the most part get at the money when you need it, and IMO suggesting that putting money into a house can substitute for savings/diversified investments is poor financial advice.

I was pointing out that doomsayers have always been around, stirring-up fear. It's OK for you with your 20:20 hindsight, but having money in banks which crashed was extremely unsettling to the ordinary person. It was a novel situation and we were not taking much risk deciding to buy another long term home, as it's what most of us want anyway, particularly at our time of life.

Where did I suggest we bought a house as a substitute for savings, investments, pensions etc? We bought a place within our means and only used savings to develop it later when things were clearer; hence my emphasis on looking at potential for the longer term.We still have savings and some investments, but we all know what many of them are doing at the moment!

My main investment account is returning about 11% at the moment.

This suggested to me that the house was a substitute for savings..... "We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites."

Would you care to clarify that 11%?
Is that per annum? Since 1/1/2020? Total since 1/1/2015? Total since 1/1/2000?  Over what period?
Without context, that figure is meaningless.

@Crashy_Time

any chance of a reply?

Well my FTSE position went up about 5% in five minutes today, how`s that for a timeline.

tom9980

Crashy_Time said:

badger09 said:

badger09 said:

Crashy_Time said:

Davesnave said:

Crashy_Time said:

Davesnave said:

When we bought in the depths of the last recession (2009) it was because of doomsayers suggesting world finance was in a downward plunge from which there was no escape. We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites.

So, although it wasn't something we loved, we bought something with the potential to be a home for a long time. We're still here and although it's not perfect, our home's fine if the current crisis proves longer term than anyone in the mainstream supposes.

Two years? Pft! Imagine living there for at least 7 years and then decide.

When will you accept that you were wrong on that? Don`t think I have heard of anyone losing money from a bank since 2008, and they were all compensated in full? The problem with a house is that it is illiquid, unlike a bank account or investment account where you can for the most part get at the money when you need it, and IMO suggesting that putting money into a house can substitute for savings/diversified investments is poor financial advice.

I was pointing out that doomsayers have always been around, stirring-up fear. It's OK for you with your 20:20 hindsight, but having money in banks which crashed was extremely unsettling to the ordinary person. It was a novel situation and we were not taking much risk deciding to buy another long term home, as it's what most of us want anyway, particularly at our time of life.

Where did I suggest we bought a house as a substitute for savings, investments, pensions etc? We bought a place within our means and only used savings to develop it later when things were clearer; hence my emphasis on looking at potential for the longer term.We still have savings and some investments, but we all know what many of them are doing at the moment!

My main investment account is returning about 11% at the moment.

This suggested to me that the house was a substitute for savings..... "We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites."

Would you care to clarify that 11%?
Is that per annum? Since 1/1/2020? Total since 1/1/2015? Total since 1/1/2000?  Over what period?
Without context, that figure is meaningless.

@Crashy_Time

any chance of a reply?

Well my FTSE position went up about 5% in five minutes today, how`s that for a timeline.

Well the good news also may mean jobs saved and sentiment may hold house prices or even allow for further rises. The FTSE 100 is still well below its peak in February.

Crashy_Time

tom9980 said:

Crashy_Time said:

badger09 said:

badger09 said:

Crashy_Time said:

Davesnave said:

Crashy_Time said:

Davesnave said:

When we bought in the depths of the last recession (2009) it was because of doomsayers suggesting world finance was in a downward plunge from which there was no escape. We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites.

So, although it wasn't something we loved, we bought something with the potential to be a home for a long time. We're still here and although it's not perfect, our home's fine if the current crisis proves longer term than anyone in the mainstream supposes.

Two years? Pft! Imagine living there for at least 7 years and then decide.

When will you accept that you were wrong on that? Don`t think I have heard of anyone losing money from a bank since 2008, and they were all compensated in full? The problem with a house is that it is illiquid, unlike a bank account or investment account where you can for the most part get at the money when you need it, and IMO suggesting that putting money into a house can substitute for savings/diversified investments is poor financial advice.

I was pointing out that doomsayers have always been around, stirring-up fear. It's OK for you with your 20:20 hindsight, but having money in banks which crashed was extremely unsettling to the ordinary person. It was a novel situation and we were not taking much risk deciding to buy another long term home, as it's what most of us want anyway, particularly at our time of life.

Where did I suggest we bought a house as a substitute for savings, investments, pensions etc? We bought a place within our means and only used savings to develop it later when things were clearer; hence my emphasis on looking at potential for the longer term.We still have savings and some investments, but we all know what many of them are doing at the moment!

My main investment account is returning about 11% at the moment.

This suggested to me that the house was a substitute for savings..... "We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites."

Would you care to clarify that 11%?
Is that per annum? Since 1/1/2020? Total since 1/1/2015? Total since 1/1/2000?  Over what period?
Without context, that figure is meaningless.

@Crashy_Time

any chance of a reply?

Well my FTSE position went up about 5% in five minutes today, how`s that for a timeline.

Well the good news also may mean jobs saved and sentiment may hold house prices or even allow for further rises. The FTSE 100 is still well below its peak in February.

Sentiment is only one part of the story, bond markets are signalling higher mortgage rates.

Davesnave

Crashy_Time said:

Davesnave said:

Yes, most people on this thread have suggested buying now could be OK if sufficient account is taken of the the property's long term suitability. Only the OP knows enough about their personal circumstances, so we cant comment on those. Seems a moderate response to me.

But now we have a suggestion that a major investment could return 11% at a time of world turmoil, instead of putting the money into a home. Well, sure, it could, for a time, but how lucky does the OP feel and is this a moderate, measured response, or just something thrown out here to impress? Will holding a portfolio of investments sit easily with the OP and make other things in their life possible? Perhaps that's something they can answer, but it's certainly something Crashy doesn't know.

The point I made was that "putting your money into bricks and mortar" now is not a sensible alternative to a well structured diversified portfolio of equities, bonds, corporate bonds etc. with maybe some cash on hand

And the point I was making is that there is always someone like you on the forum saying, 'Don't buy; the economy's about to tank!".

Back in 2008/9, there were a few MSE posters who foresaw such catastrophes with the economy GB Plc would be plunged into chaos. It would be like Mad Max, but with crap British weather. Those people scared us so much  we thought "Cities are no place to be now; we'll get ourselves a property that we can future-proof, well out in the country."

So we bought rural and basic, which was easier and cheaper than looking for the 'forever' property we'd previously wished for closer to our business interests. We kept money in reserve and waited to see how things would play out.

In 2014 we sunk more money into the property, having discovered so many advantages with it that we no longer contemplated moving on. Now it's easy to maintain and heat. What's more, changes in the law mean we now have a site for two extra properties if we decide we want them here. It's not perfect, but it was a bloody good choice.

So, thanks to the doomsayers we made what turned out to be a very good decision. It was probably naive, but it was the sort of thing real people do, because there were many other considerations, beside the economic ones.

Yes, I'm sure there are optimum courses of action and 'sensible' choices to be made, but we're human. Stick your portfolio wherever you like. While you've waited, we've cracked on.

Crashy_Time

Davesnave said:

Crashy_Time said:

Davesnave said:

Yes, most people on this thread have suggested buying now could be OK if sufficient account is taken of the the property's long term suitability. Only the OP knows enough about their personal circumstances, so we cant comment on those. Seems a moderate response to me.

But now we have a suggestion that a major investment could return 11% at a time of world turmoil, instead of putting the money into a home. Well, sure, it could, for a time, but how lucky does the OP feel and is this a moderate, measured response, or just something thrown out here to impress? Will holding a portfolio of investments sit easily with the OP and make other things in their life possible? Perhaps that's something they can answer, but it's certainly something Crashy doesn't know.

The point I made was that "putting your money into bricks and mortar" now is not a sensible alternative to a well structured diversified portfolio of equities, bonds, corporate bonds etc. with maybe some cash on hand

And the point I was making is that there is always someone like you on the forum saying, 'Don't buy; the economy's about to tank!".

Back in 2008/9, there were a few MSE posters who foresaw such catastrophes with the economy GB Plc would be plunged into chaos. It would be like Mad Max, but with crap British weather. Those people scared us so much  we thought "Cities are no place to be now; we'll get ourselves a property that we can future-proof, well out in the country."

So we bought rural and basic, which was easier and cheaper than looking for the 'forever' property we'd previously wished for closer to our business interests. We kept money in reserve and waited to see how things would play out.

In 2014 we sunk more money into the property, having discovered so many advantages with it that we no longer contemplated moving on. Now it's easy to maintain and heat. What's more, changes in the law mean we now have a site for two extra properties if we decide we want them here. It's not perfect, but it was a bloody good choice.

So, thanks to the doomsayers we made what turned out to be a very good decision. It was probably naive, but it was the sort of thing real people do, because there were many other considerations, beside the economic ones.

Yes, I'm sure there are optimum courses of action and 'sensible' choices to be made, but we're human. Stick your portfolio wherever you like. While you've waited, we've cracked on.

Do you accept that your "bricks are safer than pixels on a screen" belief was completely wrong?

tom9980

Crashy_Time said:

Davesnave said:

Yes, most people on this thread have suggested buying now could be OK if sufficient account is taken of the the property's long term suitability. Only the OP knows enough about their personal circumstances, so we cant comment on those. Seems a moderate response to me.

But now we have a suggestion that a major investment could return 11% at a time of world turmoil, instead of putting the money into a home. Well, sure, it could, for a time, but how lucky does the OP feel and is this a moderate, measured response, or just something thrown out here to impress? Will holding a portfolio of investments sit easily with the OP and make other things in their life possible? Perhaps that's something they can answer, but it's certainly something Crashy doesn't know.

The point I made was that "putting your money into bricks and mortar" now is not a sensible alternative to a well structured diversified portfolio of equities, bonds, corporate bonds etc. with maybe some cash on hand ( I like to keep about 18 months living expenses in cash, many may disagree and say this is too much but the psychological benefits are excellent, especially in difficult times) Your original quote seemed very clear that this is what you were suggesting and all I did was challenge that type of thinking which does seem to get trotted out quite a lot on here you must admit? Someone worried about overpaying should monitor what the banks are doing and make their decision from there IMO.

You do realise most people who buy a house also invest?  You seem to suggest that homeowners mortgages prevent this when often rents cost more than typical mortgage payments.