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How Much Do You Think You Have Saved?

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At the start of summer 2007 I looked at a place in London for 340K, I thought it was a bit overpriced and lo and behold, it dropped to an asking price of 320K. I put an offer in, completely derisory and under 300K (estate agent all but refrained from laughing at me). And it sold pretty quickly afterwards and came up on land registry as having sold for 317K.

I saw a house in same road, with same sized garden, and what looks to be exactly the same house layout, asking price 300K. My mate, a non HPCer commented today that I could probably get it for 270K. I've been paying 14K a year on rent for the last two years. Less in 2008 and 2009. And I would have only paid off so much capital as I would have had to service interest. So even in "last to go down London". I'm still well up on the deal. Hurrah! May the second leg of the crash start hitting max crash speed!

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I looked at a house in a town not too far away . In April 2009 it was on sale at 360K --- now it is on sale at 165K and still not selling. I've spent about 25K in rent. I am winning big time.

This is in Northern Ireland

Crashtastic!

I see some of the tremendous bargains in places like California, Florida and Ireland, and wonder whether drops as juicy as that will come Londons way. House prices around here were more than double in 2007 than 2002, so here's hoping.

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At the start of summer 2007 I looked at a place in London for 340K, I thought it was a bit overpriced and lo and behold, it dropped to an asking price of 320K. I put an offer in, completely derisory and under 300K (estate agent all but refrained from laughing at me). And it sold pretty quickly afterwards and came up on land registry as having sold for 317K.

I saw a house in same road, with same sized garden, and what looks to be exactly the same house layout, asking price 300K. My mate, a non HPCer commented today that I could probably get it for 270K. I've been paying 14K a year on rent for the last two years. Less in 2008 and 2009. And I would have only paid off so much capital as I would have had to service interest. So even in "last to go down London". I'm still well up on the deal. Hurrah! May the second leg of the crash start hitting max crash speed!

Both landlords I've been forking out to have had greater than £100k price drops since I started renting in 2006 ... the eventually first sold for £380k, well under his iniital asking price of 499k, after two years of being on the market (only £3k more than what he paid new build in 2002). The second took her house off the market after dropping £100k in asking price to £500k over four months (after kicking us out to sell it :lol: ) as she is waiting for better times (again - she only rented to us in 2008 after not selling for £600k in 2007-8).

In the meantime I reckon paid something like half what a mortgage would have cost me (on 20% deposit) to live in these rather grand places. I thank them most sincerely for subsidising my lifestyle. :rolleyes:

Having said that I'd probably forked out over £65k in rent over almost five years.... not all of that would have come off the mortgage though (not sure what proportion is repayment vs interest in a standard, say, £400k mortage over 25 years).

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At the start of summer 2007 I looked at a place in London for 340K, I thought it was a bit overpriced and lo and behold, it dropped to an asking price of 320K. I put an offer in, completely derisory and under 300K (estate agent all but refrained from laughing at me). And it sold pretty quickly afterwards and came up on land registry as having sold for 317K.

I saw a house in same road, with same sized garden, and what looks to be exactly the same house layout, asking price 300K. My mate, a non HPCer commented today that I could probably get it for 270K. I've been paying 14K a year on rent for the last two years. Less in 2008 and 2009. And I would have only paid off so much capital as I would have had to service interest. So even in "last to go down London". I'm still well up on the deal. Hurrah! May the second leg of the crash start hitting max crash speed!

I would be looking at something in a similar price range in London. I sold (in Bristol) in 2007 - I didn't get the maximum I could have as my original sale fell through (due to a non-problem re insurance which did not resolve itself until I lost my first buyer), so I took a lower offer on the second sale. I invested the money 2/3 in deposits and 1/3 in the unmentionable metal. In 2008-9 i was still getting an average of 6% on my savings which more than covered my rent of £15k. Although the rates I am getting now are more like 3% so I'm not covering the rent on this the unmentionable has more than made up for that.. However I rent somewhere that is 30% bigger/nicer than I would be looking to buy so actually that comparison is a bit unbalanced.

Added to that, whenI factor in service charges that I don't have to pay, and general internal maintaining /decoration/furnishing etc that I also don't have and I would be out on top even if I hadn't bought the shiny stuff.

I still reckon prices just have to drop by 25% here to make it worth my while.

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I looked at a house in a town not too far away . In April 2009 it was on sale at 360K --- now it is on sale at 165K and still not selling. I've spent about 25K in rent. I am winning big time.

This is in Northern Ireland

lovely stuff.

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Not hpc friendly but the hpc is not the same everywhere...

So far I am massively out of pocket.

Obviously I am still waiting and as an str am in no rush but the facts are as they are

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A life time of debt misery?

I can say to 'home owners'

I am mobile smart, capable, and most importantly, I am free in all the ways that you are not."

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I'm definitely better off for not buying, though lost a fair chunk through share dealing, d'oh.

Friend of mine only now realising how awful it is that a house costs so much. I've been to Egypt, Austria, Germany, Spain in the last two years and his lot have had no holidays whatsoever! Plus I still have the remaining wad in index-linked. His mortgage is £155k for a flat and it's 40 years!!!!!! It's definitely a shackle. Wouldn't take out a mortgage myself unless it could be paid off within a decade/15 years at max.

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155k and 40 years? Wonder what the repayment total is. That's just nuts.

Just plugged it into an online calculator. With rates at 6%, he has to pay back £360k over the 40 years!!!!!

Much different story is rates are held lower (but for 40 years!?)

You know the funniest thing? His mum was a mortgage advisor. I was hailed as the doom merchant every time I visited as I strongly recommended AGAINST buying. Whose laughing now?

Edited by guitarman001

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Just plugged it into an online calculator. With rates at 6%, he has to pay back £360k over the 40 years!!!!!

Much different story is rates are held lower (but for 40 years!?)

You know the funniest thing? His mum was a mortgage advisor. I was hailed as the doom merchant every time I visited as I strongly recommended AGAINST buying. Whose laughing now?

Not any of his good mates :)

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many DIY free weekends.

I hear ya. Before we STR'd the missus was always dreaming up things for me to do around the house. No longer while we're renting :lol:

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Crashtastic!

I see some of the tremendous bargains in places like California, Florida and Ireland, and wonder whether drops as juicy as that will come Londons way. House prices around here were more than double in 2007 than 2002, so here's hoping.

IMO - they look like 'bargains' when compared to bubble prices. After a few years of seeing prices at these levels, this will become the norm and we will look back at the madness and shake our heads in disbelief, particularly those who have bought into the nonsense and enslaved themselves in one way or another.

What we see in California, Florida and Ireland are how much houses should cost without a (finance industry planned) credit boom artificially inflating them.

Everyone needs a life outside of paying for their shelter, so the cost of shelter should be kept as low as possible to allow as much disposable income as possible. This disposable income needs to find a home somewhere and should benefit the many when spent in the wider economy. of course, there is no disposable income as it's going straight to the banks.

I guess posting this on HPC is like teaching your nan to suck eggs - we're ahead of the curve in terms of mindset and many other people will have to learn this the hard way.

HPI = bad

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Saving implies not spending.

Some people spend money on housing by getting a mortgage.

Others (like me) spend money on housing by renting.

The only way to truly "save" money is to not spend it - i.e. sponging off someone else (parents, friends, the state)

What I can say that I am definitely relatively better off than I would have ben if I'd have bought.

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I see some of the tremendous bargains in places like California, Florida and Ireland, and wonder whether drops as juicy as that will come Londons way. House prices around here were more than double in 2007 than 2002, so here's hoping.

Central London probably can't even be considered British anymore, seeing how the market is dominated by bankers and the global rich. Its more like a super-rich tourist Disneyland.

Other parts of London - I can see dropping. But rental demand is currently quite high in London. Rents have increased over the last two years (e.g. I'm paying £270pw since August 2009 and similar apartments in my building are now going for £310pw). Fundamentally, there's still a huge shortage of housing in London - due to a combination of zombie housebuilders who can't raise money to build, lack of land, NIMBYism, and long-winded planning process. Rents in London are now reaching 5-6% yield on average (up from about 3-4% in the boom), and if they rise any further into the 7-8% region, many professional BTL investors will be tempted to get into the market.

I don't see there being a big risk of house prices in London declinging 15%+. But I don't see it rising either - nothing to stoke more demand. Probably will stagnate for the next 5-10 years is my view, which will be a loss once you take inflation into account.

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Had I bought when I was first able in 2006/2007 I would have bought a larger house than I rent now so my costs would have been higher. I would also have suffered capital losses on my home value.

You could argue that I could have bought a house similar to the flat I rent and have paid off part of a mortgage.. but then I would now be in a position of having to sell to purchase a larger house.. which would incur stamp duty costs, EA fees legal fees driving me further into the red.

Overall I think I have done better by renting, with the bonus that I have saved towards a deposit meaning my eventual mortgage will be part paid off.. plus home prices may be lower still by then.

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If I'd bought in 2007 at 90% LTV I would have lost all my deposit, and then a little more.

Alot of the mortgage deals on offer were 2-3 fixed rates reverting to svrs so I would have definately ended up on the variable rate.

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A redundant question really in the sense that up to and including 2007 I simply couldn't afford to buy, back then waiting for the HPC was a financial neccessity rather than a decision based on prudence.

Now it's a matter of timing...

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Genuine question, no sub-text!

With so many reports of saving money by renting (STR or otherwise), how many of you anticipate never buying a house or do the figures only stack up in the present financial climate?

Personally, I’ve paid off my mortgage but I would be happy to rent permanently if I could find the right property on a very long-term basis. Problem is, everything on offer in my area seems to be from amateur landlords looking for a succession of AST’s to pay their mortgage until the market picks up.

Are any of you long-term tenants with no aim to buy in the foreseeable (10 years +) future?

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Nothing.

Most of the places that I am looking, asking prices are at or above 2007 levels.

Nothing is selling at that price, but if you put in a low offer you get knocked back so it isn't worth it.

Some stuff comes to auction at more sensible prices but, so far, I have yet to see an auction property that matched enough of my "must haves", except for one which went for 150% over guide.

tim

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Genuine question, no sub-text!

With so many reports of saving money by renting (STR or otherwise), how many of you anticipate never buying a house or do the figures only stack up in the present financial climate?

Personally, I’ve paid off my mortgage but I would be happy to rent permanently if I could find the right property on a very long-term basis. Problem is, everything on offer in my area seems to be from amateur landlords looking for a succession of AST’s to pay their mortgage until the market picks up.

Are any of you long-term tenants with no aim to buy in the foreseeable (10 years +) future?

For me owning is the eventual aim, who wants to be paying rent to some spiv who might take your home out from under you at any moment when you're in your dotage? For those born at the wrong time with nothing to inherit this is their unfortunate future, it's very sad. I'll buy when it's worth it. I'm sure a lot of us have the back up plan default of inheriting our folks places should this madness last much longer, we will all get there one way or another, but certainly not by taking someone elses debt off their hands for them by buying a house for a stupid amount. I think a lot of sellers don't realize this, many of us have an alternative... We will rent in the meantime but when we need it we'll have somewhere.

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I would be looking at something in a similar price range in London. I sold (in Bristol) in 2007 - I didn't get the maximum I could have as my original sale fell through (due to a non-problem re insurance which did not resolve itself until I lost my first buyer), so I took a lower offer on the second sale. I invested the money 2/3 in deposits and 1/3 in the unmentionable metal. In 2008-9 i was still getting an average of 6% on my savings which more than covered my rent of £15k. Although the rates I am getting now are more like 3% so I'm not covering the rent on this the unmentionable has more than made up for that.. However I rent somewhere that is 30% bigger/nicer than I would be looking to buy so actually that comparison is a bit unbalanced.

Added to that, whenI factor in service charges that I don't have to pay, and general internal maintaining /decoration/furnishing etc that I also don't have and I would be out on top even if I hadn't bought the shiny stuff.

I still reckon prices just have to drop by 25% here to make it worth my while.

Maybe the title of this thread should be "How Much Do You Think You Have Saved by selling (or not buying) and investing the equity in something else?"

Personally I didn't sell during the build up to the 2007 peak (although I was tempted) and got lucky by being moved onto a tracker just when IRs were slashed. So the money I've saved from having my mortgage payments reduced by 600/month has been invested elsewhere. Overall I think I'm better off by not having sold - but it's more by luck than judgement. I thought I was going to take a hit, but it hasn't come (yet).

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Personally I didn't sell during the build up to the 2007 peak (although I was tempted) and got lucky by being moved onto a tracker just when IRs were slashed. So the money I've saved from having my mortgage payments reduced by 600/month has been invested elsewhere. Overall I think I'm better off by not having sold - but it's more by luck than judgement. I thought I was going to take a hit, but it hasn't come (yet).

+1

When interest rates went south, so did my mortgage payments, as luckily I signed up to a tracker with no arrangement fee. Not buying last year saved me £30K plus in fees and taxes, and probably a bit more in falling value (maybe up to £50K). Doubtless my house has eased off in value a bit (maybe around £20K) in the last twelve months, but still less than the expenditure of moving.

Not buying nor selling seems to be the best policy, hence the lack of a market.

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Maybe the title of this thread should be "How Much Do You Think You Have Saved by selling (or not buying) and investing the equity in something else?"

My answer to that question would be well in excess of £100K over the last six years.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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