House buying risks

Crashy_Time

Mickey666 said:

Sunsaru said:

Mickey666 said:

getmore4less said:

There is no real issue for the OP,

They are looking at a 3bed house for studio money
they have around double that spare to do it up overpay etc.
They could get a lodger and smash the mortgage in a few years or cover it if they lost their job.

It would need every crash duck to line up in a row and topple like dominoes for the OP to be in trouble.

Seems the houses will be cheaper tomorrow is so intrenched that even when they do drop and bottom out they are so convinced they will drop again they mis the great opportunity to get in at the low or just after they start rising again

Yep.  Buying a home instead of renting one is so overwhelmingly advantageous over a lifetime (and we all need somewhere to live out our lives!) that the only real question is HOW MUCH financial advantage is gained.  Fact is, some home buyers will end up better off than others, depending on a whole load of parameters, but over the long term they'll ALL benefit financially.

Buying a home IS is big step, a daunting step, and for some people overwhelmingly so.  I well remember agonising over buying my first home - could I REALLY afford it?  What if this happened, what if that happened, what if something I hadn't even thought about happened?   But within a few years I couldn't believe I'd agonised over the decision.  After 3 years I was moved to a bigger house but with a proportionally cheaper mortgage . . . and so it went on.  I now wish I had committed earlier!   
If I hadn't bought my own home, I couldn't have afforded to retire early because I'd be needing to find around £3500 a month to rent the house I'm now living in . . . . which I would not have been able to afford anyway!

People need somewhere to live for their entire lives so THAT should be their planning timescale . . . not the next few months or even years.  What happens to house prices this year or next won't matter a jot in 20 years time.  What will matter in 20 years time is whether you're still paying rent or whether you're living in your own home with the end of your mortgage in sight and no further housing costs for the remainder of your life.

Although I wholeheartedly agree with everything you say, I must point out that buying a house is not for everyone. For some the risks are to great and/or they just don't want that responsibility.
Both options have their pros and cons, but for you,me and a whole host of others, the pro's outweigh the cons.
Buying a house for me has been a lifelong dream and ranks only second to being a dad.

I was focusing purely on the financial aspects because that's the focus for a money-saving forum, but you raise a very fair point that there are other non-financial considerations as well - if you can afford them

You would accept that buying property at the peak of a historic bubble at the lowest interest rates in history with massive government intervention to keep it all going isn`t very "money saving" though? You didn`t do that yourself did you?

getmore4less

Crashy_Time said:

Mickey666 said:

Sunsaru said:

Mickey666 said:

getmore4less said:

There is no real issue for the OP,

They are looking at a 3bed house for studio money
they have around double that spare to do it up overpay etc.
They could get a lodger and smash the mortgage in a few years or cover it if they lost their job.

It would need every crash duck to line up in a row and topple like dominoes for the OP to be in trouble.

Seems the houses will be cheaper tomorrow is so intrenched that even when they do drop and bottom out they are so convinced they will drop again they mis the great opportunity to get in at the low or just after they start rising again

Yep.  Buying a home instead of renting one is so overwhelmingly advantageous over a lifetime (and we all need somewhere to live out our lives!) that the only real question is HOW MUCH financial advantage is gained.  Fact is, some home buyers will end up better off than others, depending on a whole load of parameters, but over the long term they'll ALL benefit financially.

Buying a home IS is big step, a daunting step, and for some people overwhelmingly so.  I well remember agonising over buying my first home - could I REALLY afford it?  What if this happened, what if that happened, what if something I hadn't even thought about happened?   But within a few years I couldn't believe I'd agonised over the decision.  After 3 years I was moved to a bigger house but with a proportionally cheaper mortgage . . . and so it went on.  I now wish I had committed earlier!   
If I hadn't bought my own home, I couldn't have afforded to retire early because I'd be needing to find around £3500 a month to rent the house I'm now living in . . . . which I would not have been able to afford anyway!

People need somewhere to live for their entire lives so THAT should be their planning timescale . . . not the next few months or even years.  What happens to house prices this year or next won't matter a jot in 20 years time.  What will matter in 20 years time is whether you're still paying rent or whether you're living in your own home with the end of your mortgage in sight and no further housing costs for the remainder of your life.

Although I wholeheartedly agree with everything you say, I must point out that buying a house is not for everyone. For some the risks are to great and/or they just don't want that responsibility.
Both options have their pros and cons, but for you,me and a whole host of others, the pro's outweigh the cons.
Buying a house for me has been a lifelong dream and ranks only second to being a dad.

I was focusing purely on the financial aspects because that's the focus for a money-saving forum, but you raise a very fair point that there are other non-financial considerations as well - if you can afford them

You would accept that buying property at the peak of a historic bubble at the lowest interest rates in history with massive government intervention to keep it all going isn`t very "money saving" though? You didn`t do that yourself did you?

The swing in price cycle is quite long as you well know as you have missed enough of then.

The right time to transition into ownership comes and there is often no point in delaying just in case there is a dip.

Some get lucky some don't.
Trying to time the market is hard but once in you do ok long term no need to get out.

Volunteering  to exit back into rental looking to catch a dip to get back is bonkers as it needs timing the market twice.

No doubt there may be stall and a few bargains about pretty predictable you won't be spotting them as every day property will be cheaper tomorrow

Crashy_Time

getmore4less said:

Crashy_Time said:

Mickey666 said:

Sunsaru said:

Mickey666 said:

getmore4less said:

There is no real issue for the OP,

They are looking at a 3bed house for studio money
they have around double that spare to do it up overpay etc.
They could get a lodger and smash the mortgage in a few years or cover it if they lost their job.

It would need every crash duck to line up in a row and topple like dominoes for the OP to be in trouble.

Seems the houses will be cheaper tomorrow is so intrenched that even when they do drop and bottom out they are so convinced they will drop again they mis the great opportunity to get in at the low or just after they start rising again

Yep.  Buying a home instead of renting one is so overwhelmingly advantageous over a lifetime (and we all need somewhere to live out our lives!) that the only real question is HOW MUCH financial advantage is gained.  Fact is, some home buyers will end up better off than others, depending on a whole load of parameters, but over the long term they'll ALL benefit financially.

Buying a home IS is big step, a daunting step, and for some people overwhelmingly so.  I well remember agonising over buying my first home - could I REALLY afford it?  What if this happened, what if that happened, what if something I hadn't even thought about happened?   But within a few years I couldn't believe I'd agonised over the decision.  After 3 years I was moved to a bigger house but with a proportionally cheaper mortgage . . . and so it went on.  I now wish I had committed earlier!   
If I hadn't bought my own home, I couldn't have afforded to retire early because I'd be needing to find around £3500 a month to rent the house I'm now living in . . . . which I would not have been able to afford anyway!

People need somewhere to live for their entire lives so THAT should be their planning timescale . . . not the next few months or even years.  What happens to house prices this year or next won't matter a jot in 20 years time.  What will matter in 20 years time is whether you're still paying rent or whether you're living in your own home with the end of your mortgage in sight and no further housing costs for the remainder of your life.

Although I wholeheartedly agree with everything you say, I must point out that buying a house is not for everyone. For some the risks are to great and/or they just don't want that responsibility.
Both options have their pros and cons, but for you,me and a whole host of others, the pro's outweigh the cons.
Buying a house for me has been a lifelong dream and ranks only second to being a dad.

I was focusing purely on the financial aspects because that's the focus for a money-saving forum, but you raise a very fair point that there are other non-financial considerations as well - if you can afford them

You would accept that buying property at the peak of a historic bubble at the lowest interest rates in history with massive government intervention to keep it all going isn`t very "money saving" though? You didn`t do that yourself did you?

The swing in price cycle is quite long as you well know as you have missed enough of then.

The right time to transition into ownership comes and there is often no point in delaying just in case there is a dip.

Some get lucky some don't.
Trying to time the market is hard but once in you do ok long term no need to get out.

Volunteering  to exit back into rental looking to catch a dip to get back is bonkers as it needs timing the market twice.

No doubt there may be stall and a few bargains about pretty predictable you won't be spotting them as every day property will be cheaper tomorrow

Sounds like you recently bought?

MobileSaver

Crashy_Time said:

I am saying that we have an obvious property bubble ... for property that may be cheaper in future, that`s all.

The thing is when you first joined this site you said we were in a property bubble and that it was "going to collapse in the near future" in 2014... You said the same in 2015 and 2016... And again in 2017, 2018, 2019, 2020 and now 2021.

Over the years the reason why the bubble is about to burst has changed from liar loans to IO mortgages to BTL to Brexit to near zero rates to Coronavirus; the list of excuses goes on and on and on and yet here we are seven years later (after probably the biggest black swan event in a generation) with house prices 30% higher.

Anything you buy, from a sandwich to a washing machine to a car to a house may be cheaper in the future... does that mean you should hold off buying all of those things even if you need one and can afford one now?

SpiderLegs

MobileSaver said:

Crashy_Time said:

I am saying that we have an obvious property bubble ... for property that may be cheaper in future, that`s all.

The thing is when you first joined this site you said we were in a property bubble and that it was "going to collapse in the near future" in 2014... You said the same in 2015 and 2016... And again in 2017, 2018, 2019, 2020 and now 2021.

Over the years the reason why the bubble is about to burst has changed from liar loans to IO mortgages to BTL to Brexit to near zero rates to Coronavirus; the list of excuses goes on and on and on and yet here we are seven years later (after probably the biggest black swan event in a generation) with house prices 30% higher.

Anything you buy, from a sandwich to a washing machine to a car to a house may be cheaper in the future... does that mean you should hold off buying all of those things even if you need one and can afford one now?

So you are saying that the plummeting value of Bitcoin will have no effect on mortgage rates??????????

https://www.mumsnet.com/Talk/am_i_being_unreasonable/3111130-To-think-a-lot-of-folk-are-going-to-get-their-fingers-burnt-by-Bitcoin?pg=2&order=

Slithery

SpiderLegs said:
So you are saying that the plummeting value of Bitcoin will have no effect on mortgage rates??????????

I have around 5 bitcoin that I've had stashed away for years now. I think they cost me around £2 each. I'm really not looking forward to the CGT bill when I sell them....

SpiderLegs

Slithery said:

SpiderLegs said:
So you are saying that the plummeting value of Bitcoin will have no effect on mortgage rates??????????

I have around 5 bitcoin that I've had stashed away for years now. I think they cost me around £2 each. I'm really not looking forward to the CGT bill when I sell them....

So you are saying that Bitcoin inflation is going to force IR rises??????????

Slithery

God no. Just showing off

Crashy_Time

MobileSaver said:

Crashy_Time said:

I am saying that we have an obvious property bubble ... for property that may be cheaper in future, that`s all.

The thing is when you first joined this site you said we were in a property bubble and that it was "going to collapse in the near future" in 2014... You said the same in 2015 and 2016... And again in 2017, 2018, 2019, 2020 and now 2021.

Over the years the reason why the bubble is about to burst has changed from liar loans to IO mortgages to BTL to Brexit to near zero rates to Coronavirus; the list of excuses goes on and on and on and yet here we are seven years later (after probably the biggest black swan event in a generation) with house prices 30% higher.

Anything you buy, from a sandwich to a washing machine to a car to a house may be cheaper in the future... does that mean you should hold off buying all of those things even if you need one and can afford one now?

The Black Swan that bursts the bubble will be a stock market/credit market event IMO, a real Black Swan, Covid isn`t a Black Swan, Covid or similar was on the radar of many scientists way before it happened, we should have been better prepared that`s all. Being able to "afford one now" doesn`t mean you can still afford it if mortgage rates rise, that is the problem with excessive debt for basic shelter!

Slithery

Crashy_Time said:
Being able to "afford one now" doesn`t mean you can still afford it if mortgage rates rise.

Of course it does. Why do you think that lenders legally have to stress-test customers against higher interest rates?