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Cash Buyers - What Are Your Thoughts Currently?

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Our cash in the bank might make us 3% after tax but thats only 1% in real terms so we would be around 4K per year worse off renting, plus the hassle of renting.

That 4k would be swallowed up with insurance, maintenance and opportunity costs. I do get your point, but I would think hard about sinking the vast majority of my cash into one big illiquid purchase. In any case, enjoy your trip, much more enjoyable thing to think about.

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I hsve done the sums for us (STR, will have 75% deposit, paying roughly 3% yield on rented house) and if we get more than 5% gross on our STR money then we are better off renting - assuming prices stay completely flat.

If prices fall by only 2% per annum then thats equivalent to 2/3 of our rent, and so we only need a return of more than 2.2% gross to be better of renting.

Assuming we can get 3.75% gross when our current 1 year bond (6.4%) matures in November, then provided house prices fall by more than 0.6% a year we are better off renting.

Edited to say that a decline of 3% per annum (quote above) would basically equate to our entire rent hence can't see why it isn't worth renting, especially as we love our rented house.

Your sums exclude income tax on the interest you receive

If you are a higher rate tax payer it makes quite a difference ;)

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We are renting and have been for three years, when bank interest rates were 5-6pc it all made sense, lived cheaply - rented a mate's place - saved plenty of money. Houses in London are still around 2007 levels minus 10pc maximum. Ive since moved as we've had a kid...

But I'm hoping to move abroad to Spain with my work next year, so I can quit renting this new place. If that doesn't happen I will probably start to look early in the year. I also see a slow long term decline and renting for ten years doesn't appeal.

I've also got a nice big pad paid for in cash abroad, in the EU, spent a fair bit having it all tarted up this year when interest rates disappeared, so we can always go there, although earning a living is a bit harder...

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[..]

Edited to say: I reckon our STR from Jul 2007 until Feb 2009 got us from a semi-detached with no land and a 75K mortgage to a mortgage-free detached with 10+ acres plus an additional 25k. Mission accomplished.

suspects there was a cash injection involved or you moved from the SE to somewhere cheaper... <_<

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Now your just trolling ;)

Not trolling as such but a bit tongue-in-cheek. To be honest I wouldn't rule it out. A cheap property fits nicely in a balanced investment portfolio.

I've already got an all-paid-for place abroad if I ever need anywhere to lie low for a few years.

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Not trolling as such but a bit tongue-in-cheek. To be honest I wouldn't rule it out. A cheap property fits nicely in a balanced investment portfolio.

I've already got an all-paid-for place abroad if I ever need anywhere to lie low for a few years.

I honestly think if you've got one UK property unlevered or not, unless its small or you are hugely rich, thats plenty of exposure to UK residential property for most people

Average UK house = c. £175k +/- (I think, give or take) :unsure:

For it to represent 25% of your assets you need to be a millionaire... :o

Really should you have more than 20% of your assets in one class - er, no <_<

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Bet you wish you'd had the Radon survey done then.

VMR.

Ha! You are quite right. We didn't go for that scam. It's not like we're sitting on top of Skiddaw or anything.

I have a relative who is a geologist and we assessed that the risk is very low.

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I also chose a house with decor I like so I see no need to change it.

Do you have a better reason to buy or is it so she stops nagging you?

We didn't have the luxury of plenty of time to chose a rental. I like this one but she isn't as keen. One advantage is that this one is opened ended, we can have it as long as we want, it's been a rental for years.

My only other reason for buying is a pile of sterling and nothing else supporting it. I feel like Mervyn King is playing mind games with me, trying to support a UK housing ponzi scheme. He's broken the will of lots of other people already and parted them from their cash.

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We didn't have the luxury of plenty of time to chose a rental. I like this one but she isn't as keen. One advantage is that this one is opened ended, we can have it as long as we want, it's been a rental for years.

My only other reason for buying is a pile of sterling and nothing else supporting it. I feel like Mervyn King is playing mind games with me, trying to support a UK housing ponzi scheme. He's broken the will of lots of other people already and parted them from their cash.

Thats up to you, there are plenty of other places to put it other than a UK house

(Looks around nervously waiting for the gold bugs to appear :unsure: )

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2 years and then I will probably capitulate (or celebrate)

If any f****r can keep the plates spinning for that long then I think they'll manage indefinitely

I like your thinking I would wait 2 years if I could but the missus would be fuming.

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Renting for foreseeable-houseprices in NI are way over the 3.5 earnings level-also have to factor in impact of possible severe public sector job cuts on hp`s in my area.All in all i want to rent for 6-9 months minimum and reassess.My gut feel is that once the political brinkmanship ends over the election the public sector job cull will begin in earnest and that is when hp`s will hit reality prices.

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You'd have to be VERY brave to buy before the next GE in my opinion.

Personally, I'm waiting to see what happens to interest rates, taxes and (un)employment.

Buckers

Agreed; thats why the only offers i'm going to be making are 25% below asking.

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You'd have to be VERY brave to buy before the next GE in my opinion.

Personally, I'm waiting to see what happens to interest rates, taxes and (un)employment.

Buckers

Isn't it obvious

1) Interest Rates (Can't go any lower) UP

2) Taxes UP (The Government has no cash reserves after bailing out the banks )

3) Unemployment UP (The biggest ever Public Sector Job Cuts in History )

4) Petrol UP

Four UPs you are through to the next round not including UK Sterling is TOAST. As stated in many earlier posts you can only put so many band aids on . House Recovery ON HOLD whilst people worry if they have a future and a job and also can hold onto their home if they have one.

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Isn't it obvious

1) Interest Rates (Can't go any lower) UP

2) Taxes UP (The Government has no cash reserves after bailing out the banks )

3) Unemployment UP (The biggest ever Public Sector Job Cuts in History )

4) Petrol UP

Four UPs you are through to the next round not including UK Sterling is TOAST. As stated in many earlier posts you can only put so many band aids on . House Recovery ON HOLD whilst people worry if they have a future and a job and also can hold onto their home if they have one.

All the more reason to buy now with a low fixed rate and have an income in another currency, and hold a chunk of the yellow stuff.

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if i may respond in bold.

Isn't it obvious

1) Interest Rates (Can't go any lower) UP Not for quite some time.

2) Taxes UP (The Government has no cash reserves after bailing out the banks ) Not for quite some time. As long as you earn less than 150k a year.

3) Unemployment UP (The biggest ever Public Sector Job Cuts in History ) The latter......Not for quite some time. 2011 onward.......a lifetime away in house price terms.

4) Petrol UP. OK you got me there. But then as if anyone in the market to buy a house gives a shit about petrol prices. I'm convinced they don't even care that much about interest rates, let alone fooking petrol prices. jeeez.

Four UPs you are through to the next round not including UK Sterling is TOAST. As stated in many earlier posts you can only put so many band aids on . House Recovery ON HOLD whilst people worry if they have a future and a job and also can hold onto their home if they have one.

I make that one inconsequential UP. I've got major factor for you.......f00k all in the way of decent homes coming on the market and there are naff all forced sellers. Buyers blinking first for anything half decent is what's happening.

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Renting for foreseeable-houseprices in NI are way over the 3.5 earnings level-also have to factor in impact of possible severe public sector job cuts on hp`s in my area.All in all i want to rent for 6-9 months minimum and reassess.My gut feel is that once the political brinkmanship ends over the election the public sector job cull will begin in earnest and that is when hp`s will hit reality prices.

i think for NI thats spot on.

watching london tho for instance the further the £ collapses the cheaper it is for johnny foreigner.

not sure about other regions NI and London are all I have knowledge of.

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if i may respond in bold.

I make that one inconsequential UP. I've got major factor for you.......f00k all in the way of decent homes coming on the market and there are naff all forced sellers. Buyers blinking first for anything half decent is what's happening.

+1 for the not enough forced sellers, supply and demand my boy.

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Sold up in 07 and in cash & sitting out the market whilst working in Canada. No damn work in U.K, no smiley folk in U.K., dumb house prices, screwed economy. I'd like to return to U.K., but very much in two minds about it. Family are there, hence the pull but who knows

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Sold in Sept 07, bought in Aug 09. Made 30k in interest have since made 50k in notional house price increase. Am seriously considering STR again in late winter/early spring 2010 to see whether it's possible to crystalise the profit but am concerned about possible inflation next year so will only decide in Jan or Feb. Thanks.

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Accepted offer on house mid August (please let it go through)should be out a here in mid October. Bought a leasehold on a cafe on the south coast with accomodation above. Going to sit there for however long it takes and see what happens. If it looks like the markets going up we'll have the money in the bank and be ready to buy quickly.

The market aint going up yet though...........No Way !

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