council dweller Posted September 26, 2011 Share Posted September 26, 2011 Fine, but I can live in a house, however much it is depreciating. It isn't an investment. It is a home even if it goes from 200k to 20k. You would be pig sick of course, but not as much as if you didn't buy the house AND your savings are trashed. This is the connundrum right now, it seems to me. If you can rationalise that one, I would be glad to hear it. Yes you are right but the thing is to to keep your finger on the button and make that call on a week by week basis. Okay, as a council tenant with cash that's easy for me to say..... Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted September 26, 2011 Share Posted September 26, 2011 (edited) a question for anyone except goldbugs: what will the value of my cash savings be relative to house prices in the future? if everything else is going to crash too, would my savings be worth more, less or the same if i held onto it for a year or two longer? i've been saving for most of my thirtar career and could now buy a house (in mainly the wrong areas) without a mortgage. so when would it get the most for its value? buy somewhere now and just be grateful that i won't be living in a bus shelter or hang on and find out that my money will somehow evapourate? and, yes, i'm aware of inflation but, won't that be countered by the presumed hpc? In times of high volatility cash is generally a good place to be. If buying property as an an inflation hedge (as opposed to just needing somewhere to live) the UK isnt a good place since were still near the top of our bubble. You could consider spreaking your currency risk. You havnt really got anything to gain by rushing into property now and risk being landed with an illiquid depreciating asset. Wait to see how current events play themselves out over the next year or so. Edited September 26, 2011 by goldbug9999 Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted September 26, 2011 Share Posted September 26, 2011 Fine, but I can live in a house, however much it is depreciating. It isn't an investment. It is a home even if it goes from 200k to 20k. You would be pig sick of course, but not as much as if you didn't buy the house AND your savings are trashed. This is the connundrum right now, it seems to me. If you can rationalise that one, I would be glad to hear it. Sorry dont follow your logic. Your savings, as a deposit for a house, can only get "trashed" if house prices storm up again, and they would have to print trillions to make that happen which isnt very likely even with the current nutters in charge. Quote Link to comment Share on other sites More sharing options...
Einstein71 Posted September 26, 2011 Share Posted September 26, 2011 Yes I definitely think it is time to buy. I have spent years expecting certain things to happen which clearly now will NEVER happen. I have listened to people on this forum who talk as if they clearly know what they are talking about and like all economists they do, but it is total theory. In practice the collective will to keep house prices high is just too strong. In my area (Sussex) we haven't seen drops at all but I understand in other areas there have been localised falls where it was just plain silly. If I look at in unemotional manner and in my area only which is the South East I see the following: Rental Market: Rents Rising every year since I entered in 2002 Supply increasing by about 20% Demand increasing by about 35% Conclusion: With big deposits required to buy and students leaving Uni with big debts + Increased living costs, FTB will be a thing of the past. Rental demand is therefore set to increase. With popularity of BTL this will increase but because of low housing stock supply may be restricted in the SE. Average Rents will rise by around 6% per annum with lower rises for low end flats and higher for Mid Level housing. Housing Market: Prices have just flatlined with people buying up and down the ladder with stored equity and BTL investors tempted into the traditional FTB market Conclusion: Prices will bounce along with no rampant rises but no dramatic falls Price of 3 bed semi in Sussex - £250k Rental Cost £1200 - £1500pcm Mortgage 80% £850pcm There are a large number of people on this forum who have started storing water and tinned food in their cellar (rented) expecting World War 3....... sometimes take a step back, take a deep breath and look around you with a clear head. Ask yourself if you want to still be renting in 2030, how much will rent be then? How much of your mortgage would you have paid off? Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted September 26, 2011 Share Posted September 26, 2011 There are a large number of people on this forum who have started storing water and tinned food in their cellar (rented) expecting World War 3....... sometimes take a step back, take a deep breath and look around you with a clear head. Ask yourself if you want to still be renting in 2030, how much will rent be then? How much of your mortgage would you have paid off? I'm certainly not storing food in my (rented) cellar and I dont think that a large number of people on this forum are, whatever picture you people may care to paint . Will I still be renting in 2030? Perhaps, if it still makes financial sense so to do, but I expect that it will become advantageous to buy before then. How much will the rent be in 2030? Well, my rent hasn't materially changed in the six years I've been renting and I could buy the house I'm renting now for £50K less than I would have had to pay in 2006. I'm well over £100k in pocket so far, compared to if I'd bought, for cash, in 2006. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted September 26, 2011 Share Posted September 26, 2011 Yes I definitely think it is time to buy. See ya Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted September 26, 2011 Share Posted September 26, 2011 (edited) Conclusion: Prices will bounce along with no rampant rises but no dramatic falls Its a possibility, but only one of several. In a years time the trends will be much clearer in the mean time liquidity is your friend. Really, you would have to have a very pressing reason to buy now in the midst off this uncertainty rather than wait a little longer. Edited September 26, 2011 by goldbug9999 Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted September 26, 2011 Share Posted September 26, 2011 Its a possibility, but only one of several. In a years time the trends will be much clearer in the mean time liquidity is your friend. LIQUIDITY, one of my favourite words at the moment. Quote Link to comment Share on other sites More sharing options...
efdemin Posted September 26, 2011 Share Posted September 26, 2011 I'm certainly not storing food in my (rented) cellar and I dont think that a large number of people on this forum are, whatever picture you people may care to paint . Will I still be renting in 2030? Perhaps, if it still makes financial sense so to do, but I expect that it will become advantageous to buy before then. How much will the rent be in 2030? Well, my rent hasn't materially changed in the six years I've been renting and I could buy the house I'm renting now for £50K less than I would have had to pay in 2006. I'm well over £100k in pocket so far, compared to if I'd bought, for cash, in 2006. Yes, but if I'm not mistaken you're not really the typical FTB are you? You're only in the UK for maybe up to 6 months a year and spend the rest in France or elsewhere and have £100k's saved up so can pick and choose the best deals. It's all great for you but it's misleading for anyone who might otherwise be swayed by what you post. Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted September 26, 2011 Share Posted September 26, 2011 Anyone else notice that the OP has only ever posted once and disappeared. Other forums usually require a posting history before being allowed to start new topics. Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted September 26, 2011 Share Posted September 26, 2011 Yes, but if I'm not mistaken you're not really the typical FTB are you? You're only in the UK for maybe up to 6 months a year and spend the rest in France or elsewhere and have £100k's saved up so can pick and choose the best deals. It's all great for you but it's misleading for anyone who might otherwise be swayed by what you post. This thread is titled "Buy House Now With Savings Or Wait?". Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted September 26, 2011 Share Posted September 26, 2011 Yes I definitely think it is time to buy. .. There are a large number of people on this forum who have started storing water and tinned food in their cellar (rented) expecting World War 3....... sometimes take a step back, take a deep breath and look around you with a clear head. Ask yourself if you want to still be renting in 2030, how much will rent be then? How much of your mortgage would you have paid off? Let us know how that works out for you Seriously, it might make sense to buy depending on local prices. Here in NI they are about 50% off what they were at the peak of the mass insanity so one could make a case for buying a well priced house if you could do so without taking on a large negative asset/debt balance, especially given the likelihood of the ongoing monetary debasement being kicked up into a much higher gear. Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted September 26, 2011 Share Posted September 26, 2011 (edited) Let us know how that works out for you Seriously, it might make sense to buy depending on local prices. Here in NI they are about 50% off what they were at the peak of the mass insanity so one could make a case for buying a well priced house if you could do so without taking on a large negative asset/debt balance, especially given the likelihood of the ongoing monetary debasement being kicked up into a much higher gear. Buying in a country that has had a crash makes alot of sense ... so long as the local currency is sound ... ehem ... Edited September 26, 2011 by goldbug9999 Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted September 26, 2011 Share Posted September 26, 2011 Buying in a country that has had a crash makes alot of sense ... so long as the local currency is sound ... ehem ... Buy something that you could afford to get for cash but use a 60% LTV loan. Use your cash to buy appropriate investments: PMs, energy, agricultural land, supermarkets. Sit back and wait for the money printing necessary to save the rotten system, you'll be quids in. I'm really thinking of doing this myself right now but the drawback is that I'd be living in a less than optimal place (2 up, 2 down terrace in a so-so area) and if I'm buying a place to live in I want it to be a nice place. Quote Link to comment Share on other sites More sharing options...
efdemin Posted September 26, 2011 Share Posted September 26, 2011 This thread is titled "Buy House Now With Savings Or Wait?". True, but for a lot of people they will be their first significant savings of any kind and all going towards a house. It's a very different calculation compared to someone who has STR or otherwise has a hefty deposit waiting in the bank/investments. You always post as if your situation is the only situation that matters. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted September 26, 2011 Share Posted September 26, 2011 (edited) I've been thinking about this today....buy now or wait. Looking at today's asking prices i'd rather loose everything in a collapse than risk giving to to someone tying to downsize ( i.e. take their ill got gains ) or retire to spain ( with their ill gotten gains ) with my hard earned cash. They can inflate it away all they like, I'd rather they did this than take any of it in stamp duty ( £25K+ in tax to buy a nice house, no thanks ). I'd rather not have the threat of extra taxation hang over me just because I bought a bigger house. I'd rather be in a position to leave the UK at the drop of a hat and go elsewhere to live without having to worry about "selling my house", "loosing money on the deal", "renting it out". I'd rather stick too fingers up at the E.A.s who are desperate for you to buy so they can get their commission and you can get your "dream home". I'd rather not have to go to B&Q every week, paying 20% VAT for home improvements. I'd much rather see the country fall into decline than buy a house and help keep this charade going. I'd rather pay rent, so I can move for work if/when I need to. If that' means paying someone else's interest only mortgage than I don't mind that, they're only renting off the banks anyway but they can't walk away as easily. I'd rather not have to wake up every morning and think I must go to work and pay the mortgage or I will loose my house. Home ownership is a great idea when you can afford it, can afford to own it outright, can afford to up-keep it, when prices are rising ( steadily or otherwise ). Right now, home ownership is a liability that one can afford to be without. Will I loose money with this attitude....YES....but I'll be happier Edited September 26, 2011 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted September 26, 2011 Share Posted September 26, 2011 True, but for a lot of people they will be their first significant savings of any kind and all going towards a house. It's a very different calculation compared to someone who has STR or otherwise has a hefty deposit waiting in the bank/investments. You always post as if your situation is the only situation that matters. The VIs are currently pulling out all the stops to convince cash buyers to buy back into the market. I am a cash buyer, therefore I post from that perspective. This is housepricecrash.co.uk not buyanoverpricedhouseandlosealoadofmoney.com Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted September 26, 2011 Share Posted September 26, 2011 This is housepricecrash.co.uk not buyanoverpricedhouseandlosealoadofmoney.com Nor is it...www.giveacodgerallyourmoneyforatinyfallingdownshoeboxofahousesohecanretireandlivethelifeofreilly.com Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted September 26, 2011 Share Posted September 26, 2011 True, but for a lot of people they will be their first significant savings of any kind and all going towards a house. It's a very different calculation compared to someone who has STR or otherwise has a hefty deposit waiting in the bank/investments. You always post as if your situation is the only situation that matters. The OP said that they had enough savings to buy a house without a mortgage. It appears you have wandered into the wrong thread. Quote Link to comment Share on other sites More sharing options...
Einstein71 Posted September 26, 2011 Share Posted September 26, 2011 Sour mash I wandered in to an EA today in a busy town in NI. I was the only one there looking and there was literally hundreds of brochures on stands all round the office. I picked several reasonable priced ones and none had an offer. There are several other EAs in this town with even more stands with brochures. I won't be buying yet. We are in the big standoff just now with new properties coming on at just above rateable value (our only guide) and the dusty ones on the shelves will need to drop to that level if they want to sell before the new ones. My take on NI is that it was all a big Nu Labour experiment. TB rode into town, unleashed a Mowlam and a shed load of cash and promises. Here you are Gerry, nice little wage, position in power and some international credibility for you and McGuiness. Mowlam even did deals with the Ulster Loyalists in the Maze. Everyone was paid off but then there was the bigger problem which was poverty created by unemployment. NI was a place no one really wanted to invest in because of the troubles....not to worry Mr Blair will bring us the money and so it came via the Public Sector. Close to 40% of all employment as it stands. And then you have the Victoria Quarter and Titanic Quarter, 1 Billion pounds invested in Belfast...private investors....who are you kidding, read the small print and you'll see it is Laganside Corporation who were publicly funded and all the work has now been taken over by the Dept of social development. Billions of investment. So basically you suddenly get investment in property and everyone is so excited because they believe that this new improved infrastructure means that NI is a wonderful place buzzing with new opportunity and growth. The unfortunate reality is that everything was paid for, it could have been Kosovo, with 2 billion thrown at it and you'll make anywhere appear succesful for a few years. The experiment was propped up by the Celtic Tiger over the border. So when all of a sudden you get BOOM, no more money in the UK PLC Coffers and then BOOM Eire going under it really is going to hit the fan and that is why such HUGE drops have been witnessed in NI. It was its very own bubble which was always going to burst when the money machine ran dry. The experiment ended with Nu Labour, completely polar opposite of the South East of England. Quote Link to comment Share on other sites More sharing options...
tricksters Posted September 26, 2011 Share Posted September 26, 2011 Sorry dont follow your logic. Your savings, as a deposit for a house, can only get "trashed" if house prices storm up again, and they would have to print trillions to make that happen which isnt very likely even with the current nutters in charge. Northern Rock 2008 x (choose a number). People queuing round the block to get their money. Banks can't cope, shut their doors. We weren't a million miles away from that, were we. You think your savings are safe now? Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted September 26, 2011 Share Posted September 26, 2011 Northern Rock 2008 x (choose a number). People queuing round the block to get their money. Banks can't cope, shut their doors. We weren't a million miles away from that, were we. You think your savings are safe now? Safer, from financial loss, than having them tied up in an illiquid, depreciating, asset such as a house. I didn't have any savings in NR prior to the collapse because I considered it unsafe. Although, after the government guarantee was in place, I deposited enough money to buy a four bed detached house in NR at 6.9% Quote Link to comment Share on other sites More sharing options...
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