Best option finically

Sarah1Mitty2

sim2335 said:

Thanks for the input, I’m gona try, for a flat, that’s my only and best option.

Other then fiancé that’s lots of reason I need to move out.

Can’t fit a double bed in my room.

Never lived outside parents house.

I want to move out.

I agree progress is  better then nothing

For example I would love a different job doesn’t mean I shouldn’t work until I get a different one.

Taking out mortgage debt now on a flat that will be cheaper when interest rate rises feed through with savings and borrowed money isn`t progress sorry to say, it will set you back financially, some of the advice on here about S/O for example is dreadful in my opinion and your thinking about BTL says to me that you need to step back and think things through a bit more. Get a cheap room in a shared flat and experience living away from home for a while and keep saving, remember you can always walk away from a rental but you can`t walk away from a mortgage debt, even a 130k one, what happens if interest rates are even higher when you come off your fix for example?

Martico

Sarah1Mitty2 said:

Inflation is also devaluing your house or flat as interest rate rises make mortgage debt more expensive.

One counter argument to that, of course, is that inflation is eroding your savings, while mortgage debt (the principal) isn't subject to inflation, reduces as a share of your income assuming your income rises at least partly in nominal terms, and reduces over time as you make your payments. 

billy2shots

Mutton_Geoff said:

MobileSaver said:

then wonder why they end up in their fifties renting a bedsit in an undesirable part of the city.

Talking of which, where is Crashy?

Crashy is Sarah1Mitty2.
Sarah1Mitty2 is Crashy. 

They can not win. They have been wasting so much money on rent over the past 15 years they need a 70% market drop to break even. 

Everyone can make their own mind up to rent or buy but please nobody listen to CrashyTime/Sarah. Their view is warped due to their individual situation. 

Schwarzwald

Sarah1Mitty2 said:

No, that isn`t correct, but as I stated when interest rates are coming off historical lows for the first time in many people`s working lifetimes after being at rock bottom for so long that isn`t an ordinary event and people should wait to see where interest rates settle in my opinion.

So "how long should people wait" exactly?
The problem is just, you will only know in hindsight ... or in investing language: "it's time in the market, not timing the market".

Generally in these times, absolutely approach the next 6-9 months cautiously, but definitely dont sit here waiting until the HPC comes and only then make a move, central banks and monetary policies are not easily predictable, if you take the waiting for a HPC-approach, you might end up sitting still for the next 5 years again ....

Sarah1Mitty2 said:

Inflation is also devaluing your house or flat as interest rate rises make mortgage debt more expensive.

How is inflation devaluing your house? Real estate is generally seen as a hedge against inflation

Raising interest rates might result in decreasing real estate prices, but not inflation (if not driven by mortgage rates)

Sarah1Mitty2

Martico said:

Sarah1Mitty2 said:

Inflation is also devaluing your house or flat as interest rate rises make mortgage debt more expensive.

One counter argument to that, of course, is that inflation is eroding your savings, while mortgage debt (the principal) isn't subject to inflation, reduces as a share of your income assuming your income rises at least partly in nominal terms, and reduces over time as you make your payments. 

The price to rent the money that makes up the principle changes as interest rates move, that is why it is better to get the property as cheaply as possible at the start, smaller principle - less to pay to rent the money, and of course the principle doesn`t reduce just because your house price drops, you still pay off the principle of course, but not so much in the early years of the mortgage. The main point I was making though is that once you put your savings into a mortgage/house it is gone until you sell that house for a profit or to break even, both looking pretty unlikely for recent buyers in this market? And of course you have paid interest on your mortgage debt with no guarantee that you will get the savings portion back, unlike a stock/bond/savings account which is liquid and may beat inflation (especially if you are creating your own deflation by living at home, rent free?, like the OP)

The danger triangle is -  High Principle (buying at peak of market) + Rising rates due to inflation + House value falling due to rising rates = House value falling while price to rent the principle rising.

Sarah1Mitty2

Schwarzwald said:

Sarah1Mitty2 said:

No, that isn`t correct, but as I stated when interest rates are coming off historical lows for the first time in many people`s working lifetimes after being at rock bottom for so long that isn`t an ordinary event and people should wait to see where interest rates settle in my opinion.

So "how long should people wait" exactly?
The problem is just, you will only know in hindsight ... or in investing language: "it's time in the market, not timing the market".

Generally in these times, absolutely approach the next 6-9 months cautiously, but definitely dont sit here waiting until the HPC comes and only then make a move, central banks and monetary policies are not easily predictable, if you take the waiting for a HPC-approach, you might end up sitting still for the next 5 years again ....

Sarah1Mitty2 said:

Inflation is also devaluing your house or flat as interest rate rises make mortgage debt more expensive.

How is inflation devaluing your house? Real estate is generally seen as a hedge against inflation

Raising interest rates might result in decreasing real estate prices, but not inflation (if not driven by mortgage rates)

Not when interest rate policy has shifted like it has, no, too many people have bought with debt or are relying on new debt to get a certain value for their house, you can`t discount borrowing rates, this is not the 1970`s. The best hedge against inflation is to have in demand work skills and to have a widely diversified stock/bond/savings portfolio, not to borrow large sums at increasing interest rates for property.

user1977

Sarah1Mitty2 said:

Martico said:

Sarah1Mitty2 said:

Inflation is also devaluing your house or flat as interest rate rises make mortgage debt more expensive.

One counter argument to that, of course, is that inflation is eroding your savings, while mortgage debt (the principal) isn't subject to inflation, reduces as a share of your income assuming your income rises at least partly in nominal terms, and reduces over time as you make your payments. 

principle principle principle principle Principle principle 

Do you mean "principal"?

(yes, it may seem petty, but it's the principle of the thing...)

Sarah1Mitty2

Yes, principal, but as the thread title is mis-spelt it doesn`t really matter too much, the OP is going to attempt to buy the flat anyway, they will probably be back when it gets down valued.

sim2335

How strange, I had appointment with halifax now they can only offer me £50000 and my circumstances have not chnaged only improved, in May they could offer me £110000

Gycraig

sim2335 said:

How strange, I had appointment with halifax now they can only offer me £50000 and my circumstances have not chnaged only improved, in May they could offer me £110000

Seems about normal tbh my mortgage is going up 50-60 percent when I come off my fixed term