House buying risks

Crashy_Time

AnotherJoe said:

OP, not sure if its come up before but your question is posed in a very one sided way.

What about "NOT buying a house" risks?

Long term, the near certainty of house price inflation pricing you out from EVER being able to buy a house.

Autonomy - do what you want to your house, not be forced to move on account off LL.

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation (eventually to zero)

Cheaper longer term.

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting where you have the flexibility to find cheaper accommodation and move to it very quickly. Recent events have probably got the message through to even the most "can`t ever move too far from London!" types for example that moving out of London is indeed possible and desirable.................unfortunately if you rushed into buying an overpriced apartment with the wrong type of cladding for example, or any type of housing that has fallen out of favour due to Lockdowns, you will be staying put most likely whether you want to or not? 

MobileSaver

Crashy_Time said:

AnotherJoe said:

What about "NOT buying a house" risks?

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting

More scaremongering fake news from someone who really should know better by now.

The vast majority of home-owners with a mortgage are on a fixed rate so their exposure to mortgage rate spikes over the next two, five, ten years or possibly even the entire twenty-five years or more mortgage term is zero.

Crashy_Time said:

if you rushed into buying an overpriced apartment with the wrong type of cladding for example, or any type of housing that has fallen out of favour due to Lockdowns, you will be staying put most likely whether you want to or not? 

What percentage of existing home-owners are affected by the "wrong type of cladding" or "housing that has fallen out of favour"? Perhaps 1% or less?

Even more pertinently, what percentage of people looking to buy now will be affected by the "wrong type of cladding" or "housing that has fallen out of favour" without knowing beforehand what they are getting in to? Probably zero or as close to it as you can get.

As usual you pick up on extreme examples of when things don't go to plan, completely ignoring that for the other 99% buying a home was the best financial decision they ever made.

Thrugelmir

Aliliva said:

Ramouth said:

Love these calcs you do!  Really informative!

I think we also need to consider that some people will be taking out a longer term mortgage because monthly outgoings are more important to them then overall cost.  Buying is generally cheaper and more secure than renting.

Not only this - but most people will get a very long term to lower the "fixed" monthly costs, but then overpay whenever they can. 

Often they don't. They might intend to. The financial discipline isn't there though. Tomorrow never comes. Was the same when interest only mortgages were all the rage pre 2007.  People prefer their annual holidays and shiny new metal on PCP first. 

Crashy_Time

MobileSaver said:

Crashy_Time said:

AnotherJoe said:

What about "NOT buying a house" risks?

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting

More scaremongering fake news from someone who really should know better by now.

The vast majority of home-owners with a mortgage are on a fixed rate so their exposure to mortgage rate spikes over the next two, five, ten years or possibly even the entire twenty-five years or more mortgage term is zero.

Crashy_Time said:

if you rushed into buying an overpriced apartment with the wrong type of cladding for example, or any type of housing that has fallen out of favour due to Lockdowns, you will be staying put most likely whether you want to or not? 

What percentage of existing home-owners are affected by the "wrong type of cladding" or "housing that has fallen out of favour"? Perhaps 1% or less?

Even more pertinently, what percentage of people looking to buy now will be affected by the "wrong type of cladding" or "housing that has fallen out of favour" without knowing beforehand what they are getting in to? Probably zero or as close to it as you can get.

As usual you pick up on extreme examples of when things don't go to plan, completely ignoring that for the other 99% buying a home was the best financial decision they ever made.

If mortgage rates spike the fixed rate of a person hoping to sell is meaningless, it is the rate a potential buyer can get that counts! In a rising mortgage rate environment people will be inclined to pay less and the banks lend less because the monthly payment will be much less favourable at bubble prices, or are you also trying to claim that 99% of people won`t ever try to sell their home? The problem with housing bubbles is that people need to stretch themselves into decades of debt for "starter" homes that people once could move on from easily when they needed a bigger/better place.

getmore4less

Crashy_Time said:

AnotherJoe said:

OP, not sure if its come up before but your question is posed in a very one sided way.

What about "NOT buying a house" risks?

Long term, the near certainty of house price inflation pricing you out from EVER being able to buy a house.

Autonomy - do what you want to your house, not be forced to move on account off LL.

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation (eventually to zero)

Cheaper longer term.

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting where you have the flexibility to find cheaper accommodation and move to it very quickly. Recent events have probably got the message through to even the most "can`t ever move too far from London!" types for example that moving out of London is indeed possible and desirable.................unfortunately if you rushed into buying an overpriced apartment with the wrong type of cladding for example, or any type of housing that has fallen out of favour due to Lockdowns, you will be staying put most likely whether you want to or not? 

The op is already at the bottom of the rental tree a studio.

next rung down is sharing.

Might as well be in his own 3 bed property (costing the same as the studio) than  someone else's property.

MobileSaver

Thrugelmir said:

Aliliva said:

Ramouth said:

I think we also need to consider that some people will be taking out a longer term mortgage because monthly outgoings are more important to them then overall cost.  Buying is generally cheaper and more secure than renting

Not only this - but most people will get a very long term to lower the "fixed" monthly costs, but then overpay whenever they can. 

Often they don't.  People prefer their annual holidays and shiny new metal on PCP first. 

I agree. There's a whole younger generation that in the main appears to have been brought up believing they are entitled to pretty much anything they want and shouldn't have to make any sacrifices to have it...

MobileSaver

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting

The vast majority of home-owners with a mortgage are on a fixed rate so their exposure to mortgage rate spikes over the next two, five, ten years or possibly even the entire twenty-five years or more mortgage term is zero.

If mortgage rates spike the fixed rate of a person hoping to sell is meaningless,

Who said anything about "hoping to sell"?!?!

The context was a home-owner having control over their monthly payments; when your claims were proven to be false, you've now suddenly introduced something completely different...

Crashy_Time said:

people need to stretch themselves into decades of debt for "starter" homes

As has been proven repeatedly, there are plenty of "starter" homes available all over the UK where people have no need whatsoever to stretch themselves into decades of debt.

The fact that most people don't want a basic starter home but want a nice newly-built home with shiny new appliances in a nice area (and which not surprisingly cost a lot more than simple basic shelter) is an inconvenient truth that you just aren't prepared to admit to isn't it?

Crashy_Time

MobileSaver said:

Crashy_Time said:

MobileSaver said:

Crashy_Time said:

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting

The vast majority of home-owners with a mortgage are on a fixed rate so their exposure to mortgage rate spikes over the next two, five, ten years or possibly even the entire twenty-five years or more mortgage term is zero.

If mortgage rates spike the fixed rate of a person hoping to sell is meaningless,

Who said anything about "hoping to sell"?!?!

The context was a home-owner having control over their monthly payments; when your claims were proven to be false, you've now suddenly introduced something completely different...

Crashy_Time said:

people need to stretch themselves into decades of debt for "starter" homes

As has been proven repeatedly, there are plenty of "starter" homes available all over the UK where people have no need whatsoever to stretch themselves into decades of debt.

The fact that most people don't want a basic starter home but want a nice newly-built home with shiny new appliances in a nice area (and which not surprisingly cost a lot more than simple basic shelter) is an inconvenient truth that you just aren't prepared to admit to isn't it?

But we know that it isn`t as straightforward as you have presented it, the idea that mortgage debt holders can have "control over their monthly payments"?
https://www.moneysavingexpert.com/news/2018/08/considering-a-10-year-mortgage-fix-here-are-the-pros-and-cons/
The deals people can access will depend a lot on their equity, credit score, deposit amount etc.? And if like most people they hope to sell at some point it is the deals their potential buyers can access that are the key to the value of their home.

Can you post a link to a good starter home in a good area where there are jobs that you think represents value?

Crashy_Time

getmore4less said:

Crashy_Time said:

AnotherJoe said:

OP, not sure if its come up before but your question is posed in a very one sided way.

What about "NOT buying a house" risks?

Long term, the near certainty of house price inflation pricing you out from EVER being able to buy a house.

Autonomy - do what you want to your house, not be forced to move on account off LL.

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation (eventually to zero)

Cheaper longer term.

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting where you have the flexibility to find cheaper accommodation and move to it very quickly. Recent events have probably got the message through to even the most "can`t ever move too far from London!" types for example that moving out of London is indeed possible and desirable.................unfortunately if you rushed into buying an overpriced apartment with the wrong type of cladding for example, or any type of housing that has fallen out of favour due to Lockdowns, you will be staying put most likely whether you want to or not? 

The op is already at the bottom of the rental tree a studio.

next rung down is sharing.

Might as well be in his own 3 bed property (costing the same as the studio) than  someone else's property.

But he needs a lodger to do it, isn`t that sharing? You could have a better quality of life in a studio where you control who visits than in a lodger situation gone bad in a bigger property.

getmore4less

Crashy_Time said:

getmore4less said:

Crashy_Time said:

AnotherJoe said:

OP, not sure if its come up before but your question is posed in a very one sided way.

What about "NOT buying a house" risks?

Long term, the near certainty of house price inflation pricing you out from EVER being able to buy a house.

Autonomy - do what you want to your house, not be forced to move on account off LL.

More control over how much you pay, since mortgage debt is gradually erased by payments and inflation (eventually to zero)

Cheaper longer term.

Not really, you are much more tied to a mortgage (and mortgage rate spike) than you would be with renting where you have the flexibility to find cheaper accommodation and move to it very quickly. Recent events have probably got the message through to even the most "can`t ever move too far from London!" types for example that moving out of London is indeed possible and desirable.................unfortunately if you rushed into buying an overpriced apartment with the wrong type of cladding for example, or any type of housing that has fallen out of favour due to Lockdowns, you will be staying put most likely whether you want to or not? 

The op is already at the bottom of the rental tree a studio.

next rung down is sharing.

Might as well be in his own 3 bed property (costing the same as the studio) than  someone else's property.

But he needs a lodger to do it, isn`t that sharing? You could have a better quality of life in a studio where you control who visits than in a lodger situation gone bad in a bigger property.

Your point was they would need to go down a notch cheaper on the rental stakes not stay in the studio.

That would be to shared.

no different to getting a lodger in there own 3 bed

Do keep up with your own nonsense.