To buy a house, or not to buy a house?

Atomix

lookstraightahead said:

Atomix said:

Heres my 2p worth / opinion, this is what my own personal financial head tells me.
just on the monthly rent vs monthly mortgage payment.
For every month you are renting, you are not paying that money off your mortgage.
so therefore, lets assume its £1000 rent vs equivalent £1000 mortgage for arguments sake. after x1 year of renting costs £12k. That would mean, in order to be where you should have been if you had bought, you are £12k behind on you mortgage, so therefore that year you are 24k behind. Because you have spent 12k on rent (although i get that you have to live somewhere) and to be where you should have been with your mortgage is another 12k.
And it gets worse, because you will have yet another working year of your life, not paying the mortgage off, so add another year, assuming its 25 years, it would be 24... but it isnt... repeat the above, year after year until you buy....

So ....

what about the interest?
what if house prices come down?
what about short term buying?

im not disagreeing in just trying to balance things. You don't pay £12000 of your mortgage off in a year by paying £1000 a month.

Interest rates go up and down, just like your rent would.

House prices will go up and down over time, if you read my second sentence, it clearly says just on the monthly payment... ie no one has a crystal ball.

short term buying isnt mentioned at all by the OP. One would assume the OP is looking to buy a house to live in, rather than rent.

not once did I say £12000 would come off the capital owed, obviously the capital is payed off over the course of the morgage, assuming its not an interest only...

nicknameless

boxer234 said:

I am in the process of buying a house.  I’m 99% sure the market will plummet the day after I complete.

However; my mortgage is £200 a month less than my rent, I’ve not paid over the bank valuation and i think if prices drop mortgages will be harder to get.  Also interest rates are going up I have a good deal now 5 years fixed. 

Also it will be my house no more renting stress. 

Sorry but you are absolutely wrong there.





The market will plummet the day after we complete (doing the same presently)!

Francis63

Anyone who tells you the market is about to go up or down is guessing. 
No-one knows. 
You can look at what they have done historically, but doesn't guarantee anything. 
Prices are like water - they find their own level and it's always up to date as all the factors known at the time are factored in. 

All I can say is, if you need somewhere to live, all things being equal, buying is much better than renting if you can.

markin

The will be ups and downs but over 20 years its will trend up.

But the best time to buy a house was 77 years ago

lookstraightahead

markin said:

The will be ups and downs but over 20 years its will trend up.

But the best time to buy a house was 77 years ago

😂 to be fair though you can't really plan to live in the same house for that long, although my MIL spent her whole married life three doors down from where she was born, bought her house for cash. Never did experience much living though.

Spiderroo

TonyTeacake said:

It all depends on your personal circumstances, for example how secure are your jobs. If you can afford it I would go for it you are fully committed, but I would recommend taking out insurances to cover your mortgage and some of your expenses if you lose your jobs.

I was talking on here months ago about the damage this rampant inflation will to do the economy.  Many people argued this will be a temporary blip but we are now seeing this play out.

House price appreciation for April is 0.3%, this is the lowest it as been since last year and I can't see this going any higher, I believe we have hit the peak and prices will decline from here and I see a big crash playing out within the next 2 years.

Unfortunately to many red flags in the economy at the moment and it looks like we are heading into stagflation, which means a recession with high inflation and high unemployment.

I do believe a Black Swan event is coming.

Sorry to sound doom and gloom but everything I was saying months ago is happening now.

I wish you luck whichever path you decide to take.

The fact the world and their wife are talking about a potential financial crash means if we have one, it’s not a black swan event. It would need to be unexpected and hard to predict, Taleb has commented even COVID can’t be called a black swan event because a global pandemic was predictable before it impacted. 

Woolsery

eidand said:

do what's best for you mate, but most importantly do no listen to these spammers who think they have a clue what's going on with the market

This is the reason there are no debate sections on MSE now; people so invested in a particular view they resort to rudeness.

Why is it impossible for you to say,"I don't believe anyone here is able to read the financial situation ahead accurately, so you must take your own view on whether buying into the current market would be wise."  ?

What you haven't said is who the OP might seek advice from. There are plenty of analysts out there. I follow a wide range of them, but for easy understandability and a British POV Neil McCoy-Ward on You Tube is a resonable starting point. Perhaps the OP could note that before the thread disappears..... any time now!

Woolsery

theoretica said:

How many properties are there on the market that you really like?  I would say definitely start looking - but don't put pressure on yourself to buy in a particular time frame.

Wise words. We bought in the last recession and got a bargain, but it wasn't planned that way. Had there been something right in the period before, we'd have grabbed it. There again, we were mortgage-free. The property we bought wouldn't have been available to someone needing a mortgage, nor did we need to worry about employment in the new location.

There are many considerations. In a downturn flexibility can make a huge difference to one's prospects.

markin

Spiderroo said:

TonyTeacake said:

It all depends on your personal circumstances, for example how secure are your jobs. If you can afford it I would go for it you are fully committed, but I would recommend taking out insurances to cover your mortgage and some of your expenses if you lose your jobs.

I was talking on here months ago about the damage this rampant inflation will to do the economy.  Many people argued this will be a temporary blip but we are now seeing this play out.

House price appreciation for April is 0.3%, this is the lowest it as been since last year and I can't see this going any higher, I believe we have hit the peak and prices will decline from here and I see a big crash playing out within the next 2 years.

Unfortunately to many red flags in the economy at the moment and it looks like we are heading into stagflation, which means a recession with high inflation and high unemployment.

I do believe a Black Swan event is coming.

Sorry to sound doom and gloom but everything I was saying months ago is happening now.

I wish you luck whichever path you decide to take.

The fact the world and their wife are talking about a potential financial crash means if we have one, it’s not a black swan event. It would need to be unexpected and hard to predict, Taleb has commented even COVID can’t be called a black swan event because a global pandemic was predictable before it impacted. 

How many have to predict it for it not to be a 'Black Swan event' ? Almost certainly someone did, And with covid most of the general population insisted it would not ever happen with today's tec, And the same with 2008

Wiki is mostly dominated by a book.

"Black swan events were discussed by Nassim Nicholas Taleb in his 2001 book Fooled By Randomness, which concerned financial events. His 2007 book The Black Swan extended the metaphor to events outside of financial markets. Taleb regards almost all major scientific discoveries, historical events, and artistic accomplishments as "black swans"—undirected and unpredicted. He gives the rise of the Internet, the personal computer, World War I, the dissolution of the Soviet Union, and the September 11, 2001 attacks as examples of black swan events"

"His claim is that almost all consequential events in history come from the unexpected – yet humans later convince themselves that these events are explainable in hindsight."

https://en.wikipedia.org/wiki/Black_swan_theory

TonyTeacake

eidand said:

do what's best for you mate, but most importantly do no listen to these spammers who think they have a clue what's going on with the market

Actually, I spend a lot of time understanding the markets, am I right or wrong? Who really knows.

If the OP is comfortable buying a property now I would say go for it as we know long term house prices will always go up over a long period of time. If you take the time and read posts on here from around 2007-2008 a few were predicting a crash but were being laughed at, well we know a crash did happen in 2008.

I was talking about inflation on here months ago and how bad it is for the economy and we are seeing this play out now. I also mentioned this won't go away overnight and could be with us for years but many are saying things will be back to normal in a year or 2, I don't really think so, you just have to look at the late 60s, 70s and early 80s when we had high inflation.

The stock markets have had their worse start since 1939 and billions are being wiped off company values, the meltdown has wiped off more than 7 trillion dollars from the market value. So we can see all is not good in the economy so I would say this could be a very volatile time to buy into property or stocks.

So are you calling anyone who predicts a crash a spammer? 
Also if you have all the answers to what is going on in the markets please give me your explanation?