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Bumped into a neighbour yesterday who said "still renting? I think you are very courageous, I would be afraid house prices would move too far away"

I am begining to believe him, here are the circumstances:

Sold in July 2005 £480K

Paid agent £5K

Put £475K in bank

Interest earned £44K

Rent paid £29K

Current net house buying fund £490K

House sold in 2005 now "worth" £554K (8% per annum I think)

Add stamp duty plus expenses I would need £584K to buy it back

16% fall in price needed to be back where I was 2 years ago

What should I do? I feel I must continue renting and hope for price reductions, I know I am in a far better position than many on the forum but we all have different circumstances.

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Guest Cletus VanDamme
What should I do? I feel I must continue renting and hope for price reductions, I know I am in a far better position than many on the forum but we all have different circumstances.

At this stage of the game I don't think you have any option but to stay out of the game for another year or two to see what happens. Prices can't rise much higher, unless you're looking to buy in prime London, where even if the elites desert it, the growing army of public sector fat cats (for whom 500K is barely 3 times salary) will ensure prices stay high.

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Makes sense to stay put where you are for sure. £490k buys a very nice house in 99% of the country still. Price risks are to the downside at the moment. With the rise in base rate over the last year you must be getting at least 5% at the moment on your 490k you have saved, you are in a very good position and would be mad to rejoin the market now.

Is there any reason why you have to but again now?

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If you adhere to the well worn principle of 'a house is a roof over your head' (and not an investment) then i dont quite understand the point of view here.

Why did you STR in the first place? Was it to jump out of a bubble market, ride a crash and then rebuy something even bigger using your 'bubble cash' ? ...... or did you want to free yourself of mortgage debt, and buy something that suited you and your needs adaquately?

Im not intending to be judgemental here - but your motivations seem to be very much based on trying to extract profit in some way, shape or form here .... and to another extend - keep up with the jones's.

Theres nothing wrong at all with investing or wanting to do better for yourself - but this isnt a forum dedicated to that .... most people will never have the luxury of being able to sit on a 500 grand pot of cash wondering just how big a house they can buy.

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Bumped into a neighbour yesterday who said "still renting? I think you are very courageous, I would be afraid house prices would move too far away"

I am begining to believe him, here are the circumstances:

Sold in July 2005 £480K

Paid agent £5K

Put £475K in bank

Interest earned £44K

Rent paid £29K

Current net house buying fund £490K

House sold in 2005 now "worth" £554K (8% per annum I think)

Add stamp duty plus expenses I would need £584K to buy it back

16% fall in price needed to be back where I was 2 years ago

What should I do? I feel I must continue renting and hope for price reductions, I know I am in a far better position than many on the forum but we all have different circumstances.

Why the need to pay 29K rent?have you got ten kids or something.I similarly sold up a year ago,assets then 294K ,assets now 308K( despite hardly working ,I just do enough to pay NIC )because I only pay just over 1K in rent in shared place with my girlfriend(a half share of £55 p/w).Down size mate and relax.That 15K advance isn't even keeping pace with RPI in the last two years.

Edited by crashmonitor

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Guest Cletus VanDamme
Why did you STR in the first place? Was it to jump out of a bubble market, ride a crash and then rebuy something even bigger using your 'bubble cash' ? ......

Theres nothing wrong at all with investing or wanting to do better for yourself - but this isnt a forum dedicated to that .... most people will never have the luxury of being able to sit on a 500 grand pot of cash wondering just how big a house they can buy.

eh? This was the whole raison d'etre of this site, was it not? It was set up by STRs who wanted to do exactly this, if I recall.

There's many on here who have a big pot, either STR fund or saved deposit, who are itching to get back in at the bottom and get a great place at a big discount.

Edited by Cletus VanDamme

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anybody with over £100K of profits in the bank should be very happy. Its takes an age for somebody on basic wages to save that up.

the most expensive ways to make money by jumping in and out of markets is trying to catch the top and botttoms especially in illiquid assets - only a select lucky few of will ever catch the very top and very bottom - and its more likely to be luck than skill....

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Bumped into a neighbour yesterday who said "still renting? I think you are very courageous, I would be afraid house prices would move too far away"

I am begining to believe him, here are the circumstances:

Sold in July 2005 £480K

Paid agent £5K

Put £475K in bank

Interest earned £44K

Rent paid £29K

Current net house buying fund £490K

House sold in 2005 now "worth" £554K (8% per annum I think)

Add stamp duty plus expenses I would need £584K to buy it back

16% fall in price needed to be back where I was 2 years ago

What should I do? I feel I must continue renting and hope for price reductions, I know I am in a far better position than many on the forum but we all have different circumstances.

When a market 'turns' the difficulty in selling is equivalent to an overnight drop of 10% to 20%.

Your interest is 50% higher than your rent.

You have half a million in the bank to buy.

In a year's time you are going to be feeling very smug indeed.

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<br />eh? This was the whole raison d'etre of this site, was it not? It was set up by STRs who wanted to do exactly this, if I recall.<br /><br />There's many on here who have a big pot, either STR fund or saved deposit, who are itching to get back in at the bottom and get a great place at a big discount.<br />
<br /><br /><br />

Fair enough then, if thats how it started.

Its always going to be difficult to call a top, or a bottom ..... but i'd say anyone who sold in the past year or so, has a good 3-7 year wait before buying becomes a profitable option.

It feels like the final gasps for air at the minute, if sites like property snake are anything to go by.

In the meantime - i'd look at renting as the RIGHT choice, instead of something being done just to 'get through' - as time goes by i become more and more chuffed with my nice 800 pound rent (and my landlords 1500 pound mortgage). It sure does allow a life spent enjoying more of the good things..

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Guest Skint Academic

Personally I wouldn't try selling at the top of the bubble. Throw a ball up into the air and it slows down as it nears its highest point before falling again. You can't ever tell when the bubble will burst and the nearer the top you are the greater the risk that you won't be able to sell in time. I'd personally be looking for the sweet spot where mass sentiment is only just starting to change but the risk is minimal and you can still sell and make a decent enough profit. If I had bought a house and sold in 2004 or 2005 then I would still be content with my decision. Lowering interest rates in 2005 certainly wasn't the wisest decision the MPC made and it would have been very risk to rely on that happening!

Edited by Skint Academic

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I don't believe you.

If you had £500k in the bank your bank manager would have been round you house to personally sell you some investment products that without even taking much risk would have earned nearer 8-9% minimum in the current market.

What gives?

.

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I don't believe you.

If you had £500k in the bank your bank manager would have been round you house to personally sell you some investment products that without even taking much risk would have earned nearer 8-9% minimum in the current market.

What gives?

.

And could have easily lost 8-9% if the Bull in equities hadn't persisted,hindsight is great,but hey 5% (net) in safe deposits aint bad especially if you are living in Notts where houses cost the same as 2004.

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If you adhere to the well worn principle of 'a house is a roof over your head' (and not an investment) then i dont quite understand the point of view here.

Why did you STR in the first place? Was it to jump out of a bubble market, ride a crash and then rebuy something even bigger using your 'bubble cash' ? ...... or did you want to free yourself of mortgage debt, and buy something that suited you and your needs adaquately?

Im not intending to be judgemental here - but your motivations seem to be very much based on trying to extract profit in some way, shape or form here .... and to another extend - keep up with the jones's.

Theres nothing wrong at all with investing or wanting to do better for yourself - but this isnt a forum dedicated to that .... most people will never have the luxury of being able to sit on a 500 grand pot of cash wondering just how big a house they can buy.

Was made redundant and decided to move back "home" had'nt seen this site at the time, not trying to keep up with anyone, not expecting any sympathy, cant help when I was born, just trying to give an insight into my situation, I've worked all my life and the house money is the outcome.

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I bought some shares yesterday for 7.68p, sold for 10.05p today, could've sold for 11p though, now worth 9.5p.

Same goes for houses, you'll be EXTREMELY lucky to exit at the perfect time.

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Why the need to pay 29K rent?have you got ten kids or something.I similarly sold up a year ago,assets then 294K ,assets now 308K( despite hardly working ,I just do enough to pay NIC )because I only pay just over 1K in rent in shared place with my girlfriend(a half share of £55 p/w).Down size mate and relax.That 15K advance isn't even keeping pace with RPI in the last two years.

Started renting a typical BTL apartment that was furnished, our "stuff" was in storage costing quite a bit per month, now renting larger unfunished house with our "stuff" out of storage for about £30/month more

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I don't believe you.

If you had £500k in the bank your bank manager would have been round you house to personally sell you some investment products that without even taking much risk would have earned nearer 8-9% minimum in the current market.

What gives?

.

This is "house" money which I am not prepared to risk--had no approaches from the bank

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Bumped into a neighbour yesterday who said "still renting? I think you are very courageous, I would be afraid house prices would move too far away"

I am begining to believe him, here are the circumstances:

Sold in July 2005 £480K

Paid agent £5K

Put £475K in bank

Interest earned £44K

Rent paid £29K

Current net house buying fund £490K

House sold in 2005 now "worth" £554K (8% per annum I think)

Add stamp duty plus expenses I would need £584K to buy it back

16% fall in price needed to be back where I was 2 years ago

What should I do? I feel I must continue renting and hope for price reductions, I know I am in a far better position than many on the forum but we all have different circumstances.

Sorry, no sympathy for you here.

You took a chance - in other words gambled with the roof over your head.

Were you hoping to pick up on some other poor bugger's misfortune/repossession in the event of a crash and get a bigger/more expensive house at rock bottom?

When markets crash they are rarely in isolation and a huge recession will come with a HPC. IMO many will inevitibly suffer terribly.

Stop begging for a crash, why not wish for sensibly priced housing for all instead and hope we all get a soft landing? Stop sitting in your rented accomodation watching house prices like the vulture you are and get a camper van and have some fun.

Oh and by the way, yes you are in a MUCH better position than the majority so stop winging! <_<

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I bought some shares yesterday for 7.68p, sold for 10.05p today, could've sold for 11p though, now worth 9.5p.

Same goes for houses, you'll be EXTREMELY lucky to exit at the perfect time.

Not forgetting the fact that it's far easier (and cheaper) to buy and sell shares than a house.....

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