...or perhaps not buying a house after all

[ciphergoth]

...at least for a while.

Met up with babysimon at BU last night. He made a *very* persuasive case that now is not a good time to buy. Various folk made the opposite case, but his was backed up with detailed quantative historical data. I'm sore about it, but I'm convinced. It's sad but at least it means I'll be able to get a rather better property for the same money when the crash comes.

Just spoke to an investment advisor, who said if I was only investing for a year or so and then hoping to buy property, I should put my deposit in bonds. I'll also of course put the maximum I can into an ISA. It'll keep 'till I need it.

So I guess I'm looking to rent once again... but we're not in a hurry.

Comments

[chillies.livejournal.com]

I just think renting is crazy, constantly throwing away money to pay your landlord's mortgage.

The upside is one doesn't have to sleep on the street :)

What annoyed me over the last couple of years were adverts selling mortgages for buy-to-let properties. As a renter, seeing claims that rents from buy-to-let can cover the mortgage and provide some income started to piss me off when it was impossible to get a foot on the ladder in London.

[babysimon]

claims that rents from buy-to-let can cover the mortgage and provide some income started to piss me off

Fair enough. The fact that this is unlikely to be true may provide soem consolation.

[ergotia.livejournal.com]

Why do you say that? Rent for a property the same size as ours in Streatham is currently between 3 and 4 hundred a month more than our monthly mortgage payments.

[boyofbadgers.livejournal.com]

When did you buy your property?

[ergotia.livejournal.com]

1995, but I have to be honest and say we did not think of it as an investment in any way - just really fed up with renting and finally had a deposit together!

That graph again

[babysimon]

1995 was, of course, a very good year to be buying. This year isn't. In my opinion of course, and I disclaim all responsibility if Paul is reduced to penury by this decision. Of course, I will be too ;)

Re: That graph again

[ciphergoth.livejournal.com]

Eh, could you decipher the X-axis of that for me? Ta!

Re: That graph again

[babysimon]

From left to right, First Quarter 1970, First Quarter 1973, etc. With the unlabelled ticks being in really stupid places...

[purplerabbits.livejournal.com]

Is your flat mortgaged up to its current sale value, though?

And landlords have other expenses, in theory (though lots try to minimise them), and even the singiest will have months when the property is empty and generating nothing.

[ergotia.livejournal.com]

Nope, not mortgaged up to current value, prob worth twice the mortgage.

Yes landlords have other expenses but I think buying to let probably does cover your mortgage depending on equity in mortgaged property and other variables.

[ciphergoth.livejournal.com]

Note, though, that because house prices have gone up so much since you bought, someone buying now would have much higher payments to make.

Not saying you're wrong, just factoring it in.

[valkyriekaren.livejournal.com]

Yes, but presumably if you were letting that place, you'd have to be living somewhere else and paying rent/mortgage on that, unless you owned it outright.

[ergotia.livejournal.com]

Yes, that is one of the variables.

[juliet]

But you bought that a while back, no? If we were to buy our place in Bermondsey now, I reckon it'd cost around 1-200quid a month *more* to make mortgage repayments than it costs us to rent it (based on a fairly conservative estimate of the value of the house gleaned from local estate agents, & a repayment mortgage rather than interest-only). And then there'd be maintenance costs on top of that. Rental prices have definitely been falling - the landlord didn't even *try* to put ours up this year, which tbh rather surprised me (& it was fairly low to start with).