h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

All I hear at the moment is "the property prices this" and "the housing crisis that" and the like and its all sort of passing me by.

I have worked out that if I stretch myself to the limit (i.e. abandon the car restroation and cut back on the social stuff) I can afford to join this bunch - but should I?

Duncan, I gather you hang out in the Bay area, Dublin that is, rather than any similarly named Californian one. If so, I would not jump into house buying at the moment without careful thought. House prices in Dublin are ridiculously, ludicrously inflated. The big question is are they going to stay that way or will the bottom fall out of the market? If interest rates start to rise, people won't be able to afford the mortgages and house prices will have to fall. On the other hand, perhaps the time has come when Dublin will become a European city, with people living in apartments. In this case, you are never going to be able to afford a house. I don't know the answer. It's up to you.

I'm glad I got my house a number of years ago before all this started.

Duncan, I gather you hang out in the Bay area, Dublin that is, rather than any similarly named Californian one. If so, I would not jump into house buying at the moment without careful thought. House prices in Dublin are ridiculously, ludicrously inflated. The big question is are they going to stay that way or will the bottom fall out of the market? If interest rates start to rise, people won't be able to afford the mortgages and house prices will have to fall. On the other hand, perhaps the time has come when Dublin will become a European city, with people living in apartments. In this case, you are never going to be able to afford a house. I don't know the answer. It's up to you.

I'm glad I got my house a number of years ago before all this started.

Sorry about the double post, but it refused to show me the first one until I reposted it.

I actually looked at the appartments in Charlotte's Quay - very nice indeed, but at £200K they should be!
The house price crunch is already underway in that historically (i.e. over the last 2 years) in Ireland house price inflation has been approximately twice the base rate of inflation. However, at the moment base rate inflation is 6% but house price inflation is only about 4%...which means that there's better money to be made in other sectors of the economy, and the speculators are starting to move on....
However, some of us have got to live in this town, and if house prices are high so rent is also high. The difference is that rent is effectively 100% interest...what I spend on rent I will never see again.

P.S. You lucky so and so

Should you decide to do it, and I have no advice either way on that dilemma, take two tips from one who's been there, done that. Always buy in the very very best area you can. Even a tiny apology for a residence in a 'good' area will hold its value. A good area is that way for a reason, the cleanliness, the schools, the shopping etc etc. And, secondly, try, please try, and avoid a 'do-er up-perer'. It never ever gets anywhere near your original budget and time-frame. Never. Ever. So, if you find yourself attracted by a dilapidated 'Victorian' in a scruffy location, don't do it!

So would you count that as "something you learnt the hard way?".

I think our familial home (in Caistor - see guide entries around here someplace) was a bit of a fixer upper and that is now very nice. That said, there was a good decade of fixing up involved.

Yes, indeed, (fairly) bitter experience. A very long time ago, I could have, by begging, stealing and borrowing and stretching myself to the absolute limit, bought a house in a nice part of town which would now be worth some £600K. I shied off, and eventually bought within my means a smaller house elsewhere, which led on to a larger house (like the 'missed' one) but in a poor part of town which is now worth a third of that. So, capital appreciation, if that is important, has not been so good. Additionally, I have had to bring up little pherones with the help of not very good schools, dubious peer groups etc, which cuts a grade or two off their grades, which cuts their choices in life etc etc. Additionally, altho the house has been completed, it is a never ending maintenance job. Time and money. A bad decision, the lesson of which I am trying to pass on.

Mark Twain advised buying land because "they ain't making it any more".

People will talk about buying a house as an investment; but you have to ask what you want out of a house. (The dumb questions produce the most interesting answers)

Is it somewhere to live? Or a source of some income, if you have lodgers. Or maybe a method of making some capital, (buy a flat in London, make a killing, sell up, buy a castle in Scotland)? A temporary base? A foundation for a lifetime (as Pheronemous describes it)? Do you expect to be there a long time?

What is "best" best to do depends on what you want.

So what do you want?

Okay then, now that we´re on the topic of housing. If I was a student moving to Dublin and needed a place to live, do you have any good advice to what I might do? I´m looking for small apartment or room-for-rent-thing.

Hey, Duncan could buy the house, and Xanatic could rent a room from him!

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So Duncan, back to my questions. Why do you want to buy a house?

Is it somewhere to live?

Or a source of some income, if you have lodgers.

Or maybe a method of making some capital, (buy a flat in London, make a killing, sell up, buy a castle in Scotland)?

A temporary base?

A foundation for a lifetime (as Pheroneous describes it)?

Do you expect to be there a long time?

This wasn't casual conversation here - if you can work out some of the answers to these questions, then you can get nearer to working out if you should buy a house. I take it you are a UK contractor? How long have you been contracting?

Definitely I would be buying a house to live in, basically because I am becoming rather sick of renting. Its not really a capital building idea, but the fact that I would not be loosing all my money as rent does appeal.

That said, I am renting in a superb location and it is unlikely that I could afford the same house size/location...one in the same development went for IR£250K which is pretty steep for a 2 bedsemi.

I was a UK contractor, but thanks to a few odd random chances and some ludicruous decisions by the UK inland revenue I was blown ashore in Dublin and am now an Irish based contractor.

Factors against buying a house are that I am quite footloose and a house might tie me down against my nature, it is a lot of money/commitment and there is some uncertainty about the future of the Celtic tiger and its ability to support my ever growing rates .

I gotta go to lunch, but I too am an IR35-exile, but I already have a home and a mortgage in the UK.

Footloose, but not wanting to lose out.... If you do buy, buy something which is very rentable. That way if/when you finish in Dublin you can decide to keep or sell the house depending on the balance between the rental and purchase markets at the time.

Let me mull...

*goes off to a girlie lunch, before retail therapy and a gig*
*can't post till tomorrow, now*
*enjoying time off before new contract starts on the 6th*

Definately some good posts here. I would agree that you have to know why you want the house, and what for, before you buy. That said, as long as you can rent it out (I would assume that is very possible in Dublin) there is no reason not to be footloose. Of course I speak as someone who bought a flat in Glasgow as a student and then got a job in the South of England, where I have no intention of buying/staying for any length of time. Hence I rent out the Glasgow flat, which pays for itself, meaning that I can live in my poky wee room down here, pishing money away on rent, but (and this is the bit I like) eventually can return to a payed off flat in Glasgow, where I can then live rent/mortgage free (Woohoo). {Or sell it and buy a cardboard box down here }
On the down side, all those bits I want the Landlord to fix in rented accomodation, I had to do myself when I lived there, and I now have to do for some snotty nosed student who complains about MY house!!
I best end soon, before you die of boredom, so I say, go for it, provided you know you can afford it not now, but if/when interest rates double. If you can afford it then, most days should be a doddle.

Munchkin has actually given all the good advice I would have given - and from first person experience too.

For your info, my domestic arrangements are changing here in the UK (as a result of the Big D coming through); I intend to buy a house here where I live, because this is very much where I want to have a base and come back to again and again through the rest of my life. I may get a lodger/house sitter, but I won't rent out the whole house, because it will be where I keep my things, and where I come home to when I come home.

I also intend to buy what they call an Investment Property, also near here, because I understand the local market better. This will be rented out from day 1; and the plan is that it should eventually pay for itself, and give me some income later on. Also maybe some capital gain; but I am doing it for the future income.

I guess it is different if you have nowhere that you want to be when you aren't somewhere else, in the way that I want to be here when I am not away on a contract. But I still think that buying property is IN THE LONG TERM a good idea; and that if you are flexible about the kind of property (one you could bear to live in, one which is easy to rent) then you are even more likely to be pleased you did it.

Hope this helps. What are your plans?

gcB

Yes buy a house,or two.
Can we rent part of a house? Is that what you did in Nottingham. Please email your phone no so that I can talk to you about this asap.

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Speaking as houseowner(the morgage is up next year)yes,you don't have the pain of paying rent and yes,you will own it one day but in the meantime any spare money has to be spent on the upkeep of said property.Not only the normal wear and tear but storm damage of the sort from this weekend.This is money that bleeds from your pocket and you will not get back unless the insurance covers it.If the outside doesn't need painting some thing inside will.In other words a house is an ongoing hole in ones pocket and you need to be sure that you really need a house just now.Don't overstretch your resources to buy either as many will testify from the 80's that when rates went up they were so overstretched on repayments that surviving on what was left became impossible.Having said that I'd rather own my own house as I never liked having a landlord giving me a hard time about the way I lived in the property and giving me the runaround about repairs.