...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

Re: pedantry alert (sorry)

[ajva.livejournal.com]

OK, I certainly won't object to your basic points but answer me this:

If one loses ones job in a major slump following on from a housing market crash, why would it be better to be carrying an enormous mortgage debt than not?

[ergotia.livejournal.com]

Well, it never makes sense to be carrying an enormous housing debt, hence standard advice to put down the biggest deposit you can, not commit more than a third of your salary to the repayments, and go for a straight reepayment mortgage, but I think my basic point is that in a worst case scenario none of it makes much difference. If you can keep scraping together your mortgage payments you can sit out a slump, which is why your most basic calculation should be the third of your salary one (on the basis that if you lose your well paid job which allows you to live comfortably on that ratio of disposable income to mortgage payment you will struggle through with a job that tips the ratio nastily). If you cant you are fucked and have to live in rented property on housing benefit.