I'm 20 and I own my own £250000 4 bed house
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And out crawl one or two housepricecrash nutters
Yeah, the kid is an estate agent, but he's certainly switched on! Help to Buy has indeed helped house prices grow faster (that's arguably it's whole purpose), so it's entirely rational to exploit it. History has proved time and time again, that the longer you hold off buying, the more you lose out. With prices predicted to grow at by least 25% over the next 5 years, that's over £60k he'll make by just by living in the property. The alternative is throwing away £60k on renting - a net wealth difference of £120,000!!!0 -
And out crawl one or two housepricecrash nutters
Yeah, the kid is an estate agent, but he's certainly switched on! Help to Buy has indeed helped house prices grow faster (that's arguably it's whole purpose), so it's entirely rational to exploit it. History has proved time and time again, that the longer you hold off buying, the more you lose out. With prices predicted to grow at by least 25% over the next 5 years, that's over £60k he'll make by just by living in the property. The alternative is throwing away £60k on renting - a net wealth difference of £120,000!!!
No, as he will pay lots of interest and not much capital in the first five years, so his profit will be the difference in house price inflation (£60,000) and five years interest on £238,000 (total of loans) say 5%, (5% of £238,000 x 5 = £59,500) so he will earn £500 in 5 years rather than paying £60,000 rent, so net difference of £60,500 compared to renting.
With the caveat that it's. Foolish to predict thes things, here's my opinion,
Interest rates can only go up, and higher interest payments will put a brake on house price inflation, so that £60,500 is very optomistic, but even half of it is better compared to renting.0 -
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And out crawl one or two housepricecrash nutters
Yeah, the kid is an estate agent, but he's certainly switched on! Help to Buy has indeed helped house prices grow faster (that's arguably it's whole purpose), so it's entirely rational to exploit it. History has proved time and time again, that the longer you hold off buying, the more you lose out. With prices predicted to grow at by least 25% over the next 5 years, that's over £60k he'll make by just by living in the property. The alternative is throwing away £60k on renting - a net wealth difference of £120,000!!!
You have a point in that he's not paying someone elses pension as he's not renting but you don't make £60k for as long as it's still the roof over your head. You could sell it but you still need the money to buy an equivalent property and would possibly need to borrow even more as the 25% increase you cite means the next larger/nicer property you want has gone up in price too. You'll only really make money if you have something over your main residence.0 -
And out crawl one or two housepricecrash nutters
Yeah, the kid is an estate agent, but he's certainly switched on! Help to Buy has indeed helped house prices grow faster (that's arguably it's whole purpose), so it's entirely rational to exploit it. History has proved time and time again, that the longer you hold off buying, the more you lose out. With prices predicted to grow at by least 25% over the next 5 years, that's over £60k he'll make by just by living in the property. The alternative is throwing away £60k on renting - a net wealth difference of £120,000!!!
Let me guess you did not last very long on HPC. Estate agent predictions are not always correct. Maths isn't your strong point if you seriously think they will pay back 60000 on their mortgage without overpayments - assuming they don't have an interest only mortgage. The article was a puff piece - we have no idea if the couple have other loans -payday, car etc.0 -
Further nitpicking.
That's an anomaly.derbyram59 wrote:Oh, and it's a HOUSE not a "property"
When you live in it it's a house, when you sell it it's a property
It's really only your property if you have paid it off in full.
Nitpicker.
It may not be my property, but it IS a property.
You are selling a bank's property. The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Further nitpicking.
That's an anomaly.derbyram59 wrote:Oh, and it's a HOUSE not a "property"
When you live in it it's a house, when you sell it it's a property
It's really only your property if you have paid it off in full.
Nitpicker.
It may not be my property, but it IS a property.
You are selling a bank's property.
OK, but my original comment (way back) was about the couples equity in the property, the difference between final sale price and the remainder of the mortgage owed.0 -
Smaller deposit means bigger exposure for your pound, on the upside and downside.
Depends on where you buy, but whenever you invest money in anything, you're taking a punt (educated or not) on the value going up or down.
Now, he won't have bought in London, not even an absolute dive, since it's a 4 bed house for less than £1-1.5m, so I'm not so familiar with his market, but presumably he's got better oversight of the market than most. If it was London, i'd be sceptical about how much higher the property value can climb given most properties are worth in excess of 20x the average wage, but he's not.
And since he's got a 4 bed, presumably he's thinking long term, in which case the value of the investment is less relevant. After all, there are really only two prices that matter in the real world; the price you buy and the price you sell at. The rest is all finger in the air stuff. If he's in it for 15/20 years, he won't notice 10 grand here or there.
So basically, he's made the most of the finance available and market conditions to allow him to incrementally buy pieces of his house until eventually he owns it; like some financed savings pot. Fair enough.
I'd like to that, but then I live in London and have some standards about what neighbourhood I live in.
So I need to be able to borrow £1m odd for a nice 2 bed / small house, unless i'm willing to tolerate a less desirable neighbourhood and/or a long commute, which i'm not.
I figure my generation will be working till they're 70 anyway, so a few years renting in the grand scheme of things will not make any meaningful difference. I've still got 42 years to work & earn.0 -
And out crawl one or two housepricecrash nutters
Yeah, the kid is an estate agent, but he's certainly switched on! Help to Buy has indeed helped house prices grow faster (that's arguably it's whole purpose), so it's entirely rational to exploit it. History has proved time and time again, that the longer you hold off buying, the more you lose out. With prices predicted to grow at by least 25% over the next 5 years, that's over £60k he'll make by just by living in the property. The alternative is throwing away £60k on renting - a net wealth difference of £120,000!!!
Let me guess you did not last very long on HPC. Estate agent predictions are not always correct. Maths isn't your strong point if you seriously think they will pay back 60000 on their mortgage without overpayments - assuming they don't have an interest only mortgage. The article was a puff piece - we have no idea if the couple have other loans -payday, car etc.
They couldn't deal with opposing views and generally being catastrophically wrong, whereas I was right in stating the incoming Tory (coalition) government and BoE would intervene heavily to push prices upwards again, ownership will become increasingly inheritance driven, 'temporary' schemes will become permanent, and that interest rates will be held ultra low for a generation.
I'm not stating they'll pay back £60,000. I'm stating they'll gain £60,000 in equity through credit and subsidy driven growth. Through Help to Buy London, Help to Buy ISA, and the incoming Starters Homes scheme, this government is now effectively covering up to 53% of the cost of buying your own property. Think about that for a moment. I'm not arguing whether it's right or wrong or how broken the system is. Just that this is the reality of the UK housing market.0 -
Is the Government subsidising it, covering it against loses, or offsetting payments till later, that 53%?And out crawl one or two housepricecrash nutters
Yeah, the kid is an estate agent, but he's certainly switched on! Help to Buy has indeed helped house prices grow faster (that's arguably it's whole purpose), so it's entirely rational to exploit it. History has proved time and time again, that the longer you hold off buying, the more you lose out. With prices predicted to grow at by least 25% over the next 5 years, that's over £60k he'll make by just by living in the property. The alternative is throwing away £60k on renting - a net wealth difference of £120,000!!!
Let me guess you did not last very long on HPC. Estate agent predictions are not always correct. Maths isn't your strong point if you seriously think they will pay back 60000 on their mortgage without overpayments - assuming they don't have an interest only mortgage. The article was a puff piece - we have no idea if the couple have other loans -payday, car etc.
They couldn't deal with opposing views and generally being catastrophically wrong, whereas I was right in stating the incoming Tory (coalition) government and BoE would intervene heavily to push prices upwards again, ownership will become increasingly inheritance driven, 'temporary' schemes will become permanent, and that interest rates will be held ultra low for a generation.
I'm not stating they'll pay back £60,000. I'm stating they'll gain £60,000 in equity through credit and subsidy driven growth. Through Help to Buy London, Help to Buy ISA, and the incoming Starters Homes scheme, this government is now effectively covering up to 53% of the cost of buying your own property. Think about that for a moment. I'm not arguing whether it's right or wrong or how broken the system is. Just that this is the reality of the UK housing market.
Big differences in these three situations.
And when on their hospital bed they can reflect on their lives and say "Weren't we clever?".
Meanwhile, some of us have had lives to enjoy and reflect on.
My problem isn't what they have done, it is what they have sacrificed and going by the report, they will be in debt for a very, very long time so that is sacrificed too. So their future outlook is fairly boring.
Each to their own.
Any elderly, wealthy family members?The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
I bought my place 20 years ago, it's now worth about 7 times what I paid. The old guy that used to live next door had lived in the same house all his life. His Mum bought it new for £200 in 1891, it's now on the market for £725,000. Houses are ridiculously expensive now I grant you, but the trend is very much in the upwards direction over time. If you'd bought rather than rented maybe you're cup wouldn't be quite so empty."It is very unusual to lose out once you are in a property for five or more years." FACTS and FIGURES please.
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"renting dead money"? Ha ha. On the contrary, I have financial freedom. I have physical freedom. I have savings to spend on having fun (and to desperately try and get this forum back on topic - spent on MOUNTAIN BIKING :-)).
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PPS> Noggibob: cup half empty? You misread me of course, the cup is TOTALLY empty! And about to be dropped on the floor and break into numerous small pieces.0 -
Oh!
I forgot what I was originally going to post.
It is called a property ladder for a reason.
You start small and build up as you can afford.
This couple have dived straight into the deep end with both hands tied and could easily be drowning in debt very soon.
Yes, i have mixed my metaphors. I am trying to keep it simple.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
"Reporting...Reg.
jeez...infact i might be a rather tall and shapely female for all you know
Fancy a shag?
I cba to read the rest of this thread. Can someone summarise things for me?
Please someone point 'Reg' to the CC please.seanoconn - gruagach craic!0 -
"Reporting...Reg.
jeez...infact i might be a rather tall and shapely female for all you know
Fancy a shag?
Let me get back to you on that one :shock: 0 -
I cba to read the rest of this thread. Can someone summarise things for me?
Somebody took out a mortgage.0 -
I'm puzzled. Is this a good thing, or a bad thing?I cba to read the rest of this thread. Can someone summarise things for me?
Somebody took out a mortgage.Ecrasez l’infame0 -
Depends on whether enjoying life is a priority, or possessions.[url=http://www.bikeradar.com/forums/viewtopic.php?p=19754256#p19754256]BelgianBeerGeek[/url] wrote:
I'm puzzled. Is this a good thing, or a bad thing?I cba to read the rest of this thread. Can someone summarise things for me?
Somebody took out a mortgage.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Rent pay a fortune and lack of stability, Mortgage, prob pay less per month and have some stability.
best option stay at home for nothing and live off mum and dad
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Who wants stability when in their 20s?Rent pay a fortune and lack of stability, Mortgage, prob pay less per month and have some stability.
best option stay at home for nothing and live off mum and dad
Youth is wasted on the young.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Nobody "owns" their house until the mortgage is paid off0
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With net immigration 300,000 a year, house prices are sure as fark not going down in the long term.Is the gorilla tired yet?0
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Who wants stability when in their 20s?Rent pay a fortune and lack of stability, Mortgage, prob pay less per month and have some stability.
best option stay at home for nothing and live off mum and dad
Youth is wasted on the young.
Additionally I have had to move repeatedly for work (I'm 27) and sadly none of the places I have had to move to are where my parents live, so staying at home for free has never really been an option. Kudos to them for saving £500 a month off an apprentice wage or whatever she said she was on but unless you're able to live rent free at home that's going to be impossible for many people.
Did consider getting a buy to let in Manchester (so at least we had the asset to balance against everything we're spending on rent) but Help to Buy doesn't apply for that, plus I've decided to spend all my money on doing an MBA anyway...
Also, moving around has been good fun and the ability to up sticks and move for interesting opportunities when you're in your twenties definitely gets my recommendation.0 -
Let me clarify.They can't win; renting is evil, mortgages are a trap, what if this or that happens tomorrow, yadda yadda.
Good on them. They seem (overly) sensible so I suspect they've mitigated some of life's risks with a fixed term mortgage/life insurance etc.
They are on the housing ladder, great.
But at what cost?
They have sacrificed their youth and will probably be in debt the rest of their days.
Financially sound, but a sad existence in my opinion.
Each to their own but FWIW all 3 of my stepsons have bought houses in the past 5 years at 3x joint annual income and 20% down.
That is the way to do it.
I concur, personally wouldn't swap the years of pissing it up the wall (aka Uni) for a mortgage but if that's what they want then good on em.
Yep, best years of my life... Wouldn't trade it for anything.
Also wouldn't have my current job without it so would probably be earning a lot less, but that's just a side effect.0 -
Diff''rent strokes for diff'rent folks.0
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They wouldn't let me take out a mortgage on the room I had at the Hammersmith and then they eventually turfed me out back into the 'real world'. Bast@rds.seanoconn - gruagach craic!0
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More importantly, 4 bed for £250,000?
Where does he live? Outer hebredies?
£250k would buy a lot of house in Scotland, parts of the North of England, Wales, Northern Ireland.seanoconn - gruagach craic!0 -
More importantly, 4 bed for £250,000?
Where does he live? Outer hebredies?
£250k would buy a lot of house in Scotland, parts of the North of England, Wales, Northern Ireland.
Would buy a housing estate in SoT.0 -
More importantly, 4 bed for £250,000?
Where does he live? Outer hebredies?
Exactly my initial thoughts, they have three more bedrooms more than me and a lot less debt.
As for their age, well they have a 'Live Love Laugh' heart shaped bit of wood in the hallway and my money says they have 'Home is where the heart is' written on a piece of slate in the kitchen, so they don't strike me as the kind of people looking for much adventure in their 20s.0 -
The joys of not being within the M25.More importantly, 4 bed for £250,000?
Where does he live? Outer hebredies?
£250k would buy a lot of house in Scotland, parts of the North of England, Wales, Northern Ireland.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0
