does buying at the top or bottom of a market really matter?

WTF?_2 · 9 May 2008 at 9:18AM

setmefree2 wrote: »

The only way you can gain financially is if you are paying (significantly) less to rent than you would on your own place.

Which, where I live anyway, is most certainly the case and has been for a couple of years.

WTF?_2 · 9 May 2008 at 9:24AM

setmefree2 wrote: »

The op didn't ask this question. They asked if over the last 20 years it made any difference today whether you bought at top or bottom of the market.;)

Just about the only way it isn't going to make a difference is if you are buying a 'house for life' that you don't change for 20 years and can comfortably afford the payments. PasturesNew's post outlined it quite well.

If you are going to participate in 'the housing ladder' it's absolute madness to buy at the top, even over the longer term. The only issue is calling the top as, such has been the craziness of the UK market, there were reasonable grounds to call it since about 2003 ... it just kept boosting higher and higher against all logic and reason.

going2die_rich · 9 May 2008 at 9:38AM

Depends on the person. If you are the sort to save away or invest the thousands you save in buying when property prices are low then you will be better off. But on the other hand, if you see these thousands as extra money to spend on a holiday or a lavish lifestyle then obviously at the end you aren't. Not that you didn't get to enjoy that extra money.

I think the best thing about buying at a low end is that it means you can afford more so can live in a better area which can improve your quality of life since you are less likely to be in the troublesome areas. But at the end of the day, when you sell up, you are just going to put that money in an equally sized house/area or upgrade again, so in financial terms you don't really gain anything there and then other than the quality. Although your family will when you die and they inherit it

setmefree2 · 9 May 2008 at 9:42AM

lethal0r wrote: »

thanks all. are there any national figures or large scale surveys on this topic?

I doubt it. I don't personally know anybody who is suffering from the effects of negative equity from the early 90's. The amounts now would seem quite small since property was so much cheaper then. I think the media would have found people like that if they existed. Over 20 years any differences just "ironed themselves out" as you would have being rent anyway.

setmefree2 · 9 May 2008 at 9:47AM

!!!!!!? wrote: »

Which, where I live anyway, is most certainly the case and has been for a couple of years.

I am probably alot older than you:eek:. It would cost me £1k a month more to rent my house than it costs me for my regular monthly mortgage payment. Over the years the rent versus mortgage argument changes too, as the more equity you have in your house the cheaper it becomes versus renting. By the way I am not suggesting that the op should buy a property now

, I'm merely answering the question he/she posed.

setmefree2 · 9 May 2008 at 9:50AM

!!!!!!? wrote: »

Just about the only way it isn't going to make a difference is if you are buying a 'house for life' that you don't change for 20 years and can comfortably afford the payments. PasturesNew's post outlined it quite well.

If you are going to participate in 'the housing ladder' it's absolute madness to buy at the top, even over the longer term. The only issue is calling the top as, such has been the craziness of the UK market, there were reasonable grounds to call it since about 2003 ... it just kept boosting higher and higher against all logic and reason.

Pasturesnew did not factor in the cost of rent, I don't think. Therefore, she's not comparing like with like. I wasn't saying buy at the top or buy now.:D I was just (trying) to explain why 20 years later a dip in the market has no impact now.

Turnbull2000 · 9 May 2008 at 10:22AM

setmefree2 wrote: »

Pasturesnew did not factor in the cost of rent, I don't think. Therefore, she's not comparing like with like. I wasn't saying buy at the top or buy now.:D I was just (trying) to explain why 20 years later a dip in the market has no impact now.

Though it would be a pity for your mortgage to be like a noose round your neck for those intervening years - an age when you may wish to have children and enjoy the prime of your life. Mortgage costs don't ease after a fews years anymore. 20 years is now the time it take for mortgage costs to half, not 5 or 7 like it used to.

dannyboycey · 9 May 2008 at 10:36AM

In response to the original question. Yes. It matters to me. Whether it matters to anyone else.... not my concern. Sorry if that sounds arrogant, but I think that's the kind of response that kind of question warrants.

John_Pierpoint · 9 May 2008 at 10:40AM

The switch between affluence and poverty depends on several factors:
* Poor Health of you or your partner.
* Having kids, they cost a fortune.
* Getting divorced - good way of making lawyers affluent.
* Being kept alive in a care home.

Oh, and somewhere in this list may be

* Losing your source of income while in negative equity.

Good luck everyone, we all need that.

borntobefree · 9 May 2008 at 11:07AM

I knew a number of people who had negative equity. Mostly they were living in flats. So they just made the next jump on the ladder and rented out their flats. They were the first "accidental" landlords, perhaps. They all the sold the flats in the mid 90's and made a packet. I remember feeling quite jealous:p. But don't suppose that is what !!!!!!? wants to hear - sorry:o