lapal_fan Posted June 9, 2014 Share Posted June 9, 2014 Do you have the cash to buy a house for £60k+? If so, do it, talk to some builder friends if you have them, knowing people is half the job in construction, I got 80% off my kitchen buying it thtough a construction company. Although I want to redecorate my house now, I'd say it took about £5,000 to gut, knock down a few walls, put some up, knock out a chimney and redecorate the whole place, including kitchen/bathroom. My old man has similar skills to rob182's and my brother is in construction - I tell them all the time we should get some money together and buy a "do-er-upper" and my brother says times a problem and my old man would do it, provided he trusted me to help out. We're just lazy Link to comment Share on other sites More sharing options...
CVByrne Posted June 9, 2014 Share Posted June 9, 2014 Do not under any circumstances buy a house at age 25 when you are not settled in a career you are going to do long term. The world was ruined by people buying property when there was no need to. 1 Link to comment Share on other sites More sharing options...
Rob182 Posted June 9, 2014 Share Posted June 9, 2014 But surely it's better to be on the ladder, than wasting your money paying rent, irrespective of whether you are in a career you plan to do for the rest of your life? 2 Link to comment Share on other sites More sharing options...
CVByrne Posted June 9, 2014 Share Posted June 9, 2014 "The ladder" is the poison word that is used to get people to buy homes before they can afford to. It's built on the fundamental lie that house prices only go up at a higher rate than normal inflation. People buying homes out of fear they won't be able to in 3 or 4 years time. Destroyed the world and people never learn. Link to comment Share on other sites More sharing options...
Rob182 Posted June 9, 2014 Share Posted June 9, 2014 Oh okay. That's different to what you originally said. I agree, don't buy a house before you can afford to, or if you're looking to quit your job/ become unemployed for a while whilst you train for a new one. But I don't see anything wrong with buying a house while working somewhere that, though stable, you could happily change for another job. I bought my house when I was 25, 2 years ago, and I'm in a job that is stable, but not something I'm bothered about doing until I retire. If I get made redundant, I'll happily take the cheque and find something new. Link to comment Share on other sites More sharing options...
Stevo985 Posted June 9, 2014 VT Supporter Share Posted June 9, 2014 It's not cowardly and selfish to choose to do a job you love even if it pays less than another job you could do I'd say it's the exact opposite of cowardly. Link to comment Share on other sites More sharing options...
CVByrne Posted June 9, 2014 Share Posted June 9, 2014 People should buy a home when it is right for them that is the key, very few people in recent years have done this. The reason is because out false pressure / fear of rising prices that drives people. How many people really know the market dynamics of the current house bubble? I'd say far more people will see the year on year increase and falsely believe it will continue and they need to buy now than people who correctly see it's pent up demand released at the same time, combined with record low interest rates. Simple fact is house prices in east midlands have gone up 1.5% per year in the past 10 years. That's it. Buy when you are ready with a secure job and having saved for a couple of years what would be equivalent of monthly repayments. Then you'll already be used to the take home when you get a mortgage. Link to comment Share on other sites More sharing options...
Rob182 Posted June 9, 2014 Share Posted June 9, 2014 'When is right for them', is surely just when they can afford it? Or when they can save up a deposit? I don't think many people buy houses out of fear of prices rising. I think a lot of people just realise that the money they spend on rent, they could be spending on actually owning a house. But that's just my opinion. Link to comment Share on other sites More sharing options...
Seat68 Posted June 9, 2014 Share Posted June 9, 2014 Agree with Rob182, CVByrne is this your opinion or is it your profession? It seems completely off accepted thinking. If you are looking for your own place and you have the money, the best option surely is to buy over renting. Link to comment Share on other sites More sharing options...
Meath_Villan Posted June 9, 2014 Share Posted June 9, 2014 I self built my house at 28 ....no pressure to build/ buy ...just got sick of paying someone else's mortgage for a shit hole .....to be faire we didn't have to pay for the land to build on and we built when prices were low combined with a tracker mortgage its working out fairly well .......on the job front I have moved jobs to fit in with family life for less cash etc and I don't regret a single second Link to comment Share on other sites More sharing options...
lapal_fan Posted June 9, 2014 Share Posted June 9, 2014 I think it's difficult to save for a depoist if you're already renting. I know my friends are having some difficulty doing it. That said, I bought my house when I was 23 and just leaving home, so I haven't actually rented anywhere, although I imagine it is tougher. Saving up a deposit when you're living at home is waaay easier I think. Link to comment Share on other sites More sharing options...
CVByrne Posted June 9, 2014 Share Posted June 9, 2014 'When is right for them', is surely just when they can afford it? Or when they can save up a deposit? I don't think many people buy houses out of fear of prices rising. I think a lot of people just realise that the money they spend on rent, they could be spending on actually owning a house. But that's just my opinion. Yes but you could end up paying almost twice as much as your house costs due to the interest alone. So you end up with a home but you've paid over the odds ultimately for it. The best method is to save money and rent until you settle down. With a larger deposit you will be in a much better position then, no need for the "ladder" nonsense. Add to this your income most likely will improve as you get older. You can then again get a better mortgage as you are a much safer bet for a bank. Very few people really look at their finances properly, or factor in % of their income that goes on repayments etc.. or the idea that paying off a mortgage early sometimes is worse than simply investing your surplus earnings etc.. The drive to get young people to own property is a bad thing and is a symptom of this country. In Europe they have a much better developed and regulated rental market with property portfolios owned by pension companies etc.. The words "rent is dead money" and "property ladder" are poison words. They are vague half truths that don't give people the advice they really need. It saddens me to see so many people in negative equity due to these horrible words and society pressure to buy property. Link to comment Share on other sites More sharing options...
Rob182 Posted June 9, 2014 Share Posted June 9, 2014 (edited) I disagree. I think 'rent is dead money' and 'property ladder', are only poison terms if you don't prepare properly for home-owning. When I was looking into buying a house, I researched and read that your mortgage should not be more than a third of your monthly income (or something like that). Following that rule, as long as your mortgage doesn't triple (which, I would have thought, is pretty unlikely), you'll have enough money to put some aside, live comfortably and also have enough wiggle-room for any (reasonable) increases in expenditure. I think the whole 'you could end up paying XXX times more than your house costs', applies to everyone, whatever your age, career or personal circumstances. Edited June 9, 2014 by Rob182 Link to comment Share on other sites More sharing options...
CVByrne Posted June 9, 2014 Share Posted June 9, 2014 Agree with Rob182, CVByrne is this your opinion or is it your profession? It seems completely off accepted thinking. If you are looking for your own place and you have the money, the best option surely is to buy over renting. That's what saddens me, Accepted thinking. ie vested interests wanting you to do xyz. All property price increases are hyped up by the people who want to profit from it. Nobody has learnt any lessons from the crash. Link to comment Share on other sites More sharing options...
CVByrne Posted June 9, 2014 Share Posted June 9, 2014 Let me point out a wee bit of simple maths. Say a 200k mortgage you want to take out over 30 years at an avg 4% per year. That's £956 per month = £344,160 in total If you were to rent for £500 per month and could afford to save £800 per month also then in 2 years including interest you'd have ~ £20k Now you get a mortgage of £180k and your repayments are £860 per month. £309,600 in total. So rent and savings cost £31,200 for the two years so in total £309,600 + £31,200 = £340,800 £344,160 - £340,800 = £3,360 savings you've made. This kind of maths is the numbers people don't make. Because to do so would undermine the people who want you to buy homes so they can make money. People say rent is dead money, no rent could be saving you from real dead money which is the interest portion of a mortgage. People should run the numbers. But they don't. Buying a property is the biggest financial decision a person will make in his or her life, it should be give a huge amount of thought and planning. Link to comment Share on other sites More sharing options...
Stevo985 Posted June 9, 2014 VT Supporter Share Posted June 9, 2014 There's a lot of assumptions in that maths. Shouldn't you factor in the 2 years worth of rent free living at the end of that period for scenario A because they paid off their mortgage 2 years early? Link to comment Share on other sites More sharing options...
Seat68 Posted June 9, 2014 Share Posted June 9, 2014 Let me point out a wee bit of simple maths. Say a 200k mortgage you want to take out over 30 years at an avg 4% per year. That's £956 per month = £344,160 in total If you were to rent for £500 per month and could afford to save £800 per month also then in 2 years including interest you'd have ~ £20k Now you get a mortgage of £180k and your repayments are £860 per month. £309,600 in total. So rent and savings cost £31,200 for the two years so in total £309,600 + £31,200 = £340,800 £344,160 - £340,800 = £3,360 savings you've made. This kind of maths is the numbers people don't make. Because to do so would undermine the people who want you to buy homes so they can make money. People say rent is dead money, no rent could be saving you from real dead money which is the interest portion of a mortgage. People should run the numbers. But they don't. Buying a property is the biggest financial decision a person will make in his or her life, it should be give a huge amount of thought and planning. 800 a month, minus the 500 that you will pay in rent would be 7200, unless you are saying that 800 is in addition to 500 paid in rent. Your figures arent clear, and this seems to be your opinion, not based on any professional guidance. The over riding thing is 2 years and you dont own jack, you will have nothing to show for it at all. 1 Link to comment Share on other sites More sharing options...
samjp26 Posted June 9, 2014 Share Posted June 9, 2014 I'd love to know where I could rent somewhere decent in Birmingham for £500 a month. Link to comment Share on other sites More sharing options...
Stevo985 Posted June 9, 2014 VT Supporter Share Posted June 9, 2014 I bought my house when I moved out of home. I was 24 I regretted it for a while as it was really hard to manage with money for the first 12-18 months. But once I got a lodger and a bit of a payrise at work it was much more comfortable. I still have a few regrets that I didn't live in like a city centre apartment for a while. But I'm comfortable with my decision. Link to comment Share on other sites More sharing options...
Seat68 Posted June 9, 2014 Share Posted June 9, 2014 mid nineties we bought our first house, me and my wife and we probably earned 22k between us, we bought off the council in one of the worst parts of the town we lived in, this "ladder" has enabled us to have our own place, getting a bit better each time, no one goes in for their first house buying a 400k property, a lot of people dont even go for a 200k, you buy what you can afford. We didnt rent as that is purely putting off the inevitable. Link to comment Share on other sites More sharing options...
Recommended Posts