Worried about overpaying on house purchase

grumiofoundation

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.

Investing in the stock market and owning a property (whether mortgaged or not) are not at all mutually exclusive.

I agree wholeheartedly with your point about diversification, and buying a property is part of this for a lot of people. 

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.

It also went down ~33% between late Feb - late March.

badger09

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.

Irrelevant.
And certainly doesn't provide an answer to my earlier question (but then I didn't expect a straight answer from you) 

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.

Davesnave

Crashy_Time said:

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?

 I know this isn't a comprehension test, but my personal story began from the premise that our distrust of the stuttering banking system proved unfounded. Surely you got that? It was 12 years ago. House Price Crash people were suggesting here that we shouldn't buy. Fortunately, we didn't listen to them, but we modified our search and made a cautious choice rather than park our lives in neutral.

On this thread I didn't advise people to distrust banks, stop holding savings or sell off investments. If you'd read what I said, it boils down to: "times are uncertain, so make sure that if you buy now, the property is capable of serving you for a good length of time." That seems to be broadly what others have said too.

Crashy_Time

Davesnave said:

Crashy_Time said:

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?

 I know this isn't a comprehension test, but my personal story began from the premise that our distrust of the stuttering banking system proved unfounded. Surely you got that? It was 12 years ago. House Price Crash people were suggesting here that we shouldn't buy. Fortunately, we didn't listen to them, but we modified our search and made a cautious choice rather than park our lives in neutral.

On this thread I didn't advise people to distrust banks, stop holding savings or sell off investments. If you'd read what I said, it boils down to: "times are uncertain, so make sure that if you buy now, the property is capable of serving you for a good length of time." That seems to be broadly what others have said too.

"We figured bricks and mortar were somewhat more substantial than pixels on the screens of various banking web sites." doesn`t quite say the same to me, sorry. As most chains will rely on people borrowing money from banks at some level most sellers will need to trust in the pixels on the screen if they hope to sell?

MaxJones

Davesnave said:

Crashy_Time said:

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?

 I know this isn't a comprehension test, but my personal story began from the premise that our distrust of the stuttering banking system proved unfounded. Surely you got that? It was 12 years ago. House Price Crash people were suggesting here that we shouldn't buy. Fortunately, we didn't listen to them, but we modified our search and made a cautious choice rather than park our lives in neutral.

On this thread I didn't advise people to distrust banks, stop holding savings or sell off investments. If you'd read what I said, it boils down to: "times are uncertain, so make sure that if you buy now, the property is capable of serving you for a good length of time." That seems to be broadly what others have said too.

12 years ago the fundamental problems were not solved but instead pushed into the future and made worse

Davesnave

MaxJones said:

Davesnave said:

Crashy_Time said:

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?

 I know this isn't a comprehension test, but my personal story began from the premise that our distrust of the stuttering banking system proved unfounded. Surely you got that? It was 12 years ago. House Price Crash people were suggesting here that we shouldn't buy. Fortunately, we didn't listen to them, but we modified our search and made a cautious choice rather than park our lives in neutral.

On this thread I didn't advise people to distrust banks, stop holding savings or sell off investments. If you'd read what I said, it boils down to: "times are uncertain, so make sure that if you buy now, the property is capable of serving you for a good length of time." That seems to be broadly what others have said too.

12 years ago the fundamental problems were not solved but instead pushed into the future and made worse

Which means what, exactly, for the average person on MSE?

AdrianC

Davesnave said:

MaxJones said:

12 years ago the fundamental problems were not solved but instead pushed into the future and made worse

Which means what, exactly, for the average person on MSE? 

Years more whinging by Crashy and friends?

Crashy_Time

Davesnave said:

MaxJones said:

Davesnave said:

Crashy_Time said:

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?

 I know this isn't a comprehension test, but my personal story began from the premise that our distrust of the stuttering banking system proved unfounded. Surely you got that? It was 12 years ago. House Price Crash people were suggesting here that we shouldn't buy. Fortunately, we didn't listen to them, but we modified our search and made a cautious choice rather than park our lives in neutral.

On this thread I didn't advise people to distrust banks, stop holding savings or sell off investments. If you'd read what I said, it boils down to: "times are uncertain, so make sure that if you buy now, the property is capable of serving you for a good length of time." That seems to be broadly what others have said too.

12 years ago the fundamental problems were not solved but instead pushed into the future and made worse

Which means what, exactly, for the average person on MSE?

My take would be that they are paying way way more than they should be for basic accommodation because instead of propping the bubble up with taxpayers money the government should have let it pop so that ordinary hard working key workers could afford a home without begging money from their family and taking HTB loans, although the big players that were saved back then are now taking a hit on commercial property, and no amount of money printing can make people go to closed shops in a retail park, so maybe there are Karmic forces at work after all?

Crashy_Time

pbhb said:

Houses prices are meaningless I’ve learnt. A house is worth what a buyer is willing to pay. If you are willing to pay £150k then the house is worth that. An end of terrace will always be far more desirable than a mid-terrace, well worth the extra money in my eyes. The valuation report also agrees with the price so I think it’s first time nerves clouding your potential excitement for the house 

Also be prepared for a future buyer to think it is worth 100k, this apartment has gone from 150k asking to 100k asking in quite a short space of time.
https://www.rightmove.co.uk/property-for-sale/property-63104766.html

jimbog

I paid off my mortgage within those 12 years