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EmmaRoid

Boil My Head, Now.

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A house has just come on the market, not been touched in 30 years type but it does have some things going for it. Priced with the things going for it in mind not the not touched for 30 years part. Wife is smitten.

Just been press-ganged by a bunch of people how renting is dead money, housing is not an investment but you'll make money on it and best of all I've some sort of irrational/emotional problem with buying a house when really what price can I put on making my wife happy?

This sucker (property cycle) has a long way to go yet.

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Just been press-ganged by a bunch of people how renting is dead money, housing is not an investment but you'll make money on it and best of all I've some sort of irrational/emotional problem with buying a house when really what price can I put on making my wife happy?

This sucker (property cycle) has a long way to go yet.

Had a conversation with a family member today. My cousin with his partner are thinking of buying a 2 bed house here in Liverpool and I couldn't resist getting into an argument. Usually I don't bother as nobody listens but I was in a bad mood.

Apparently house prices are on the up and now is the time to jump on before people can't afford a roof over the head. :lol:

  • I pointed out that if interest rates returned to normal (say 5%) they wouldn't be able to afford the repayments. This was ignored.

  • I pointed out that the government (vie Help to Sell Buy) is pushing property prices higher than they should be. This was ignored.

  • I pointed out how strange it was that my cousin could only afford a 2 bed terrace when 2 generations ago a 3 bed semi-detatched was the norm. Apparently this is because my cousin is only restricting himself to a 80% LTV mortgage. He should get a 95% mortgage apparently and maybe think about interest-only.

  • Finally I pointed out that the economy was screwed as the government struggled to pump more money (debt) into the system and that with government borrowing costs rising we might see desperate times in the not too distant future. I pointed out that as both my cousin and his fiancee worked directly for the government (most people do here in Liverpool) they did not exactly have job security. Apparently I need not worry as the economy was booming. :blink: This is news to me. :P

Then I gave up. Usually I pull out the old "no asset always rises in price and that you have to buy an asset when it is undervalued and sell it when it is over-valued" but I couldn't be bothered.

This merry-go-round cannot go on forever. UK government borrowing costs are rising. Borrowing itself has not be reduced. Pension companies are in real trouble. We are coming to the end of the road. Patience is all you need my friend.

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Had a conversation with a family member today. My cousin with his partner are thinking of buying a 2 bed house here in Liverpool and I couldn't resist getting into an argument. Usually I don't bother as nobody listens but I was in a bad mood.

Apparently house prices are on the up and now is the time to jump on before people can't afford a roof over the head. :lol:

  • I pointed out that if interest rates returned to normal (say 5%) they wouldn't be able to afford the repayments. This was ignored.

  • I pointed out that the government (vie Help to Sell Buy) is pushing property prices higher than they should be. This was ignored.

  • I pointed out how strange it was that my cousin could only afford a 2 bed terrace when 2 generations ago a 3 bed semi-detatched was the norm. Apparently this is because my cousin is only restricting himself to a 80% LTV mortgage. He should get a 95% mortgage apparently and maybe think about interest-only.

  • Finally I pointed out that the economy was screwed as the government struggled to pump more money (debt) into the system and that with government borrowing costs rising we might see desperate times in the not too distant future. I pointed out that as both my cousin and his fiancee worked directly for the government (most people do here in Liverpool) they did not exactly have job security. Apparently I need not worry as the economy was booming. :blink: This is news to me. :P

and when it all goes tits up you cousin will deny your conversation took place.

Then I gave up. Usually I pull out the old "no asset always rises in price and that you have to buy an asset when it is undervalued and sell it when it is over-valued" but I couldn't be bothered.

This merry-go-round cannot go on forever. UK government borrowing costs are rising. Borrowing itself has not be reduced. Pension companies are in real trouble. We are coming to the end of the road. Patience is all you need my friend.

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Had a conversation with a family member today. My cousin with his partner are thinking of buying a 2 bed house here in Liverpool and I couldn't resist getting into an argument. Usually I don't bother as nobody listens but I was in a bad mood.

Apparently house prices are on the up and now is the time to jump on before people can't afford a roof over the head. :lol:

  • I pointed out that if interest rates returned to normal (say 5%) they wouldn't be able to afford the repayments. This was ignored.

  • I pointed out that the government (vie Help to Sell Buy) is pushing property prices higher than they should be. This was ignored.

  • I pointed out how strange it was that my cousin could only afford a 2 bed terrace when 2 generations ago a 3 bed semi-detatched was the norm. Apparently this is because my cousin is only restricting himself to a 80% LTV mortgage. He should get a 95% mortgage apparently and maybe think about interest-only.

  • Finally I pointed out that the economy was screwed as the government struggled to pump more money (debt) into the system and that with government borrowing costs rising we might see desperate times in the not too distant future. I pointed out that as both my cousin and his fiancee worked directly for the government (most people do here in Liverpool) they did not exactly have job security. Apparently I need not worry as the economy was booming. :blink: This is news to me. :P

Then I gave up. Usually I pull out the old "no asset always rises in price and that you have to buy an asset when it is undervalued and sell it when it is over-valued" but I couldn't be bothered.

This merry-go-round cannot go on forever. UK government borrowing costs are rising. Borrowing itself has not be reduced. Pension companies are in real trouble. We are coming to the end of the road. Patience is all you need my friend.

No, our area is apparently hyper-immune and price increases come from 'demand', not wages or credit.

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And before I forget again, they building a HS2 station within walking distance so you can commute from Manchester to London in 50 mins

Yeah, and depending how old you are it's likely to be irrelevant to you. 2033 is the opening date, isn't it? - and my guess it could be at least a couple of years late.

People I knew pulled a similar stunt about trying to get me to buy in Leeds. I told them I wasn't going to stay in Leeds for 20 years on the off chance they might build a faster train.

Edited by StainlessSteelCat

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A house has just come on the market, not been touched in 30 years type but it does have some things going for it. Priced with the things going for it in mind not the not touched for 30 years part. Wife is smitten.

Just been press-ganged by a bunch of people how renting is dead money, housing is not an investment but you'll make money on it and best of all I've some sort of irrational/emotional problem with buying a house when really what price can I put on making my wife happy?

This sucker (property cycle) has a long way to go yet.

funny. I'm in almost exactly the same position. mrs desperate to buy - she's v emotional about it. I can only see the downsides (probably thanks to reading this site for the last 6 years). I've been lying awake imagining financial disaster for us. Interest rates shooting up a week after we buy, that sort of thing. We've looked at some places, some part of my brain keeps saying it's a big trick, everthing is twice as expensive as it should be. I thought she was being irrational about the whole thing but if I'm honest I'm just as bad with my obsession with imminent hpc which, where we live in London, never really happened. got some cognitive dissonance stress issues, let's say.

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Yeah, and depending how old you are it's likely to be irrelevant to you. 2033 is the opening date, isn't it? - and my guess it could be at least a couple of years late.

People I knew pulled a similar stunt about trying to get me to buy in Leeds. I told them I wasn't going to stay in Leeds for 20 years on the off chance they might build a faster train.

I replied with the most polite response I could muster which was that I didn't think it would get built.

2 more gems,

Buying is more secure than renting because the govt will pay your mortgage id you lose your job unlike renting where having a deposit in the bank and having to pay your own rent for a while is not at all secure. Ditto someone who has never private rented telling me how scary it is to only have 2 months notice.

And that id I am worried about buying a house like this I shoud speak to an expert like a financial advisor who can show me I can afford it. I am supposed to out aside my own feelings and subject myself to 35 years of debt slavery for my wife and kids' sake. No other way of living or providing for oneself.

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funny. I'm in almost exactly the same position. mrs desperate to buy - she's v emotional about it. I can only see the downsides (probably thanks to reading this site for the last 6 years). I've been lying awake imagining financial disaster for us. Interest rates shooting up a week after we buy, that sort of thing. We've looked at some places, some part of my brain keeps saying it's a big trick, everthing is twice as expensive as it should be. I thought she was being irrational about the whole thing but if I'm honest I'm just as bad with my obsession with imminent hpc which, where we live in London, never really happened. got some cognitive dissonance stress issues, let's say.

I'm so glad my wife sees things more or less as I do... She still thinks I'm a HPC obsessive, but she's no longer pushing to buy since she can see that things are currently insane... She dreams of having 'a little place of our own', but refuses to risk our hard earned savings on piling in at the top of the ponzi. Phew! She even told me the other day that she'd been advising her friend not to buy and to wait and reassess after the election, since the politicos are clearly doing everything they can to keep the plates spinning until then! :)

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And before I forget again, they building a HS2 station within walking distance so you can commute from Manchester to London in 50 mins

You'll love this one. Most every day, I drive past a new development, which is being built on a reclaimed open cast coal site. Within easy reach of M1 J33, major supermarket within walking distance, what could possibly go wrong?

When the HS2 route was announced, I studied it carefully in my area and noticed it will be run immediately at the back of this development, at an elevated level, decelerating as the trains slow down for the stop at Sheffield or accelerating out on the way back to Birmingham. It's actually shown as nicking a corner off the end of the supermarket - that's how close it is. You'd be nuts to buy a house there.

After this monring's wobble on financial viability and bearing in mind that the NYMBYs down south seem to be getting quite a foothold, I wouldn't be surprised if some wag is saying this development is underpriced, because HS2 will never happen.

.

Edited by Stainless Sam

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funny. I'm in almost exactly the same position. mrs desperate to buy - she's v emotional about it. I can only see the downsides (probably thanks to reading this site for the last 6 years). I've been lying awake imagining financial disaster for us. Interest rates shooting up a week after we buy, that sort of thing. We've looked at some places, some part of my brain keeps saying it's a big trick, everthing is twice as expensive as it should be. I thought she was being irrational about the whole thing but if I'm honest I'm just as bad with my obsession with imminent hpc which, where we live in London, never really happened. got some cognitive dissonance stress issues, let's say.

The problem isn't even that extreme and I'd take a chance with say 15% off whatever it does sell for. Having watched the market closely for 3 years, it will be close to asking price (<5%).

Locally I am in a 'London-esque' market. The local area is sucking in the good money and people are over-competing for the property within it. In the short term, I can see it becoming further detached from the regional picture (North West England) so buying might make sense now longer term is a bigger risk - Haldane and his fat tails and short attention spans, H/T Monsieur Dish. Like London, you don't know how long people will be blinkered enough to just look at the prime bit and ignore the bigger picture of the British economy where there are clearly problems. The area hasn't seen the the extra HPI London has but prices (not volumes) have been very resilient since 2007. Where this market will lag or lead London, I don't know but I'm working on the basis it is a London type market not a UK regional one, will move on a timescale similar to London and it will remain irrational for longer than you would think possible. London is key.

Also told that property is far safer than cash in the bank, look at Cyprus - as if we have anywhere near that amount of money in total between the 2 of us in a couple of banks let alone in one name in one account. Not sure how true that would be when property is the only thing 'worth' anything that people have. When you consider how much residential property forms of the UK's accumulated wealth, when will it be focused on?

But buying would mean moving from a draughty rented house to a draughty mortgaged house and instead of having a comfortable lifestyle we would have to think twice about every penny. Repayment mortgage is about 50% more than rent. Last time I had a serious chat about this (a couple of weeks ago) the steer was that we should start enjoying ourselves rather than chasing the impossible dream. Seems someone, not me, is a dirty great big liar. And effectively we'd need to borrow 4x (my) single income.

Anyone feel my reticence is unfair?

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The problem isn't even that extreme and I'd take a chance with say 15% off whatever it does sell for. Having watched the market closely for 3 years, it will be close to asking price (<5%).

Locally I am in a 'London-esque' market. The local area is sucking in the good money and people are over-competing for the property within it. In the short term, I can see it becoming further detached from the regional picture (North West England) so buying might make sense now longer term is a bigger risk - Haldane and his fat tails and short attention spans, H/T Monsieur Dish. Like London, you don't know how long people will be blinkered enough to just look at the prime bit and ignore the bigger picture of the British economy where there are clearly problems. The area hasn't seen the the extra HPI London has but prices (not volumes) have been very resilient since 2007. Where this market will lag or lead London, I don't know but I'm working on the basis it is a London type market not a UK regional one, will move on a timescale similar to London and it will remain irrational for longer than you would think possible. London is key.

Also told that property is far safer than cash in the bank, look at Cyprus - as if we have anywhere near that amount of money in total between the 2 of us in a couple of banks let alone in one name in one account. Not sure how true that would be when property is the only thing 'worth' anything that people have. When you consider how much residential property forms of the UK's accumulated wealth, when will it be focused on?

But buying would mean moving from a draughty rented house to a draughty mortgaged house and instead of having a comfortable lifestyle we would have to think twice about every penny. Repayment mortgage is about 50% more than rent. Last time I had a serious chat about this (a couple of weeks ago) the steer was that we should start enjoying ourselves rather than chasing the impossible dream. Seems someone, not me, is a dirty great big liar. And effectively we'd need to borrow 4x (my) single income.

Anyone feel my reticence is unfair?

The big factor for us is we have a 2 year old. Wife says we need to live in the same area until he gets into a good school, it's a problem in London. Our rental place is good but each year the rent goes up and we know the LL bought it to move into himself when he downsizes, just don't know when that will be. Mrs. feels the 'instability' acutely. So I've just caved in. Honestly, it really hurts looking at the prices people are asking in London. Some nutters selling a place we looked at have actually added 75% to what they paid in 2010. Agent says it will go in a week (we'll see about that, we're not offering on this one, but she was pretty confident). Makes me feel sick but my feelings on all that are less important than my mrs' mental welfare. Another v. big factor is we luckily have a pretty good deposit and qualify for the current 5 year fixes that are around 2.7, 2.8%. Repayment mortgage will actually be lower than our current rent ... and crucially, fixed for 5 years. no more b*stard rent rises. That leaves one big risk left - interest rates are a lot higher when our 5 year fix ends (and prices have crashed).

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But buying would mean moving from a draughty rented house to a draughty mortgaged house and instead of having a comfortable lifestyle we would have to think twice about every penny. Repayment mortgage is about 50% more than rent. Last time I had a serious chat about this (a couple of weeks ago) the steer was that we should start enjoying ourselves rather than chasing the impossible dream. Seems someone, not me, is a dirty great big liar. And effectively we'd need to borrow 4x (my) single income.

Anyone feel my reticence is unfair?

Just to add - given that your mortgage will be a lot more than your rent, which makes your situation different to mine - try pointing out to her that the difference could buy you a really bloody nice family holiday every year or something like that. Put it in terms of what you'll be giving up as a family to buy that house, because she might not really have thought about that side of it, dazzled by the prospect of your dream home as it sounds like she is.

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Just to add - given that your mortgage will be a lot more than your rent, which makes your situation different to mine - try pointing out to her that the difference could buy you a really bloody nice family holiday every year or something like that. Put it in terms of what you'll be giving up as a family to buy that house, because she might not really have thought about that side of it, dazzled by the prospect of your dream home as it sounds like she is.

No, she knows alright.

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Just been press-ganged by a bunch of people how renting is dead money, housing is not an investment but you'll make money on it and best of all I've some sort of irrational/emotional problem with buying a house when really what price can I put on making my wife happy?
2 more gems,

Buying is more secure than renting because the govt will pay your mortgage id you lose your job unlike renting where having a deposit in the bank and having to pay your own rent for a while is not at all secure. Ditto someone who has never private rented telling me how scary it is to only have 2 months notice.

Sighh*. So long like this with other owners. Are they well meaning? I think of them as rampers, trying to ensure a non-owner is always buying at high prices to keep their own homes elevated in value. A secret fear; reluctance of people to buy could escalate, meaning their own homes fall in value. Ramp ramp. And despite it all, it plays on you, because of all that's happened with reflating prices under QE ect, issues that can come with renting, and because you do want to buy a home, for obvious reasons.

Sounds like a house I've seen come to market recently. Apart from a nice back garden, asking way too much, and needs a lot of money spent doing it up from 30+ years untouched. The sellers/downsizer/inheritors probably feel they've done enough to get over quarter-million because the only thing they have done is paint the front door a shade of cool Farrow & Ball, from the white since Streetview passed. From that alone I've got a bad feeling they'll hold out for a price, or 'what it is worth'. Know oldies buy flats by seaside outright whilst leaving their main homes on the market for 18 months+, only selling when young-mid 30s couple buy (with baby/child) and move their mother in with them who contributed heavily to the purchase price.

Also I note a house 3 doors away, tried to sell at a £300K in 2011. Unmodernised again, although perhaps only 15/20 years untouched. Didn't get their price so removed it from market. Got to be quite a few owners wanting to move. A HPC would bring them sharp back to market, I'd hope. Risk of them losing ever more in value, signal to encourage them to sell up quicker.

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Sounds like the one, silver 206 outside on streetview.

Apparently 4 asking price offers already, best offers by Thursday lunchtime. She's viewed it and loves it.

And I'm probably close to being divorced.

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And another thing, because my parents only own one house (their former council house) I don't understand property.

That's apparently why I don't want to buy a house

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We're saved! A 2 yr fix at 2.59% will only cost 50% more than current rent absolutely no idea on the fees or the lender (& consequent SVR)

If that's not the height of affordability, I don't know what is and with mortgage advisor acquaintances like that, who needs enemies?

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We're saved! A 2 yr fix at 2.59% will only cost 50% more than current rent absolutely no idea on the fees or the lender (& consequent SVR)

If that's not the height of affordability, I don't know what is and with mortgage advisor acquaintances like that, who needs enemies?

The only thing I can suggest is renting a nicer house that's say 50% more expensive than the house you're currently paying in rent.. for say 2 years. Have the pleasure of that, and perhaps your wife happier, and can turn it around on all those giving you the buy advice on some draughty house some old people haven't touched for 30 years that needs loads of money spent on it.

It would also be a run on how it would be for your finances to buy something average in today's local market where you've been looking.

This is not bad advice (below), depending upon how it was said, and how it's interpreted. Except not impossible, just having to wait it out till something gives. The banks will eventually be looking to lend in volume on all these fully-outright owned houses, imo, requiring lower prices for younger buyers. Something I've learned with women is when you give in on something important (I'm thinking of a few non-house purchases), against your better judgment, it's all forgotten anyway if/when it goes wrong, and you get all the blame again. Tougher situation with housing though, given the London mirroring(ish)-effect with house prices.

Last time I had a serious chat about this (a couple of weeks ago) the steer was that we should start enjoying ourselves rather than chasing the impossible dream.
Despite recent price appreciation, many potential sellers remain reluctant to put homes on the market, hoping to make better deals by waiting. "They want to see where this market is going," he said, "and whether they can get even higher prices."

Ok that's for USA, but seems the same situation here. Need something to jolt supply to market, and then into a pricing war (lower) from sellers.

Edited by Venger

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I have suggested another rental but that draws out "renting is dead money" as I'm not even close on the rent = mortgage interest front. Despite the security of holding enough money to provide anything we need at a moments notice as a tenant, it is apparently a fate worse than death. I am not meeting her needs apparently. Maslow take note, you missed decoration off the bottom of your triangle.Interest returns on deposits don't help though.

As we know some Cypriots, that is coming up in conversation too, bail-ins. This is despite her being Greek and actually having to pay spurious property taxes they invent when strapped for cash. I honestly don't think it is me suffering the extreme cognitive dissonance. Property is clearly a one way bet, prime areas are immune and it is safer than anything else in the known universe

As for the 'advice', I as a man took it at face value. She, as a snake with tits, said it and didn't mean it. I've told her she has 2 choices, bring some meaningful contribution to make it affordable or there's the door. It is not going well. I've also told her to put an asking price offer in because if she ever says I cost her the 'dream' house I will be out the door. I don't think we have a cat in hells chance of winning the bid so I'm not overly concerned but I'm not taking the fall for not getting it.

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I have suggested another rental but that draws out "renting is dead money" as I'm not even close on the rent = mortgage interest front. Despite the security of holding enough money to provide anything we need at a moments notice as a tenant, it is apparently a fate worse than death. I am not meeting her needs apparently. Maslow take note, you missed decoration off the bottom of your triangle.Interest returns on deposits don't help though.

As we know some Cypriots, that is coming up in conversation too, bail-ins. This is despite her being Greek and actually having to pay spurious property taxes they invent when strapped for cash. I honestly don't think it is me suffering the extreme cognitive dissonance. Property is clearly a one way bet, prime areas are immune and it is safer than anything else in the known universe

As for the 'advice', I as a man took it at face value. She, as a snake with tits, said it and didn't mean it. I've told her she has 2 choices, bring some meaningful contribution to make it affordable or there's the door. It is not going well. I've also told her to put an asking price offer in because if she ever says I cost her the 'dream' house I will be out the door. I don't think we have a cat in hells chance of winning the bid so I'm not overly concerned but I'm not taking the fall for not getting it.

I really hope your situation can be sorted out SYNT. No-one deserves to be put under that sort of pressure, especially from friends/acquaintances.

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