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

Of course, when I originally started this thread I wasn't planning on getting married next summer - so I suppose that makes a difference to the buy/don't buy scenario?

Definately buy, honey.
My mortgage is also almost paid up.
I am always paying out for stuff to be done, but at least the place is mine.
A young man on the same road as myself, bought a dormer bungalow approx. 4 years ago. The previous owners were selling up & moving to be with their only son in another part of the country. No chain involved. He got the house for a snip at £48,000 and promptly set about doing it up {it was very old fashioned}.
I knew the couple and I also knew the new occupant so I saw the house at various stages.
A new bathroom suite, re-modelled living room, new kitchen units...all made a tremendous difference.
This year, said young man's girlfriend {a divorcee} and her daughter, sold her home & moved in with him.
He put the small dormer on the market & the first viewer purchased, for the full asking price of £64,995.
With their joint kitty the young couple have purchased a large detached bungalow, in the neighbouring village.
A lucky couple?
Yes, some would say.
I'd call them shrewd.
I don't know what my house is worth.
But if I'd been renting for 25 years, it would be worth ~nothing~ to me.
Buy, buy, buy. What you pay out in maintenance, you at least have the satisfaction of knowing it's *yours*. Get adequate house & contents insurance, try & pay a little bit more of what the Building Society asks from you each month. You will pay your mortgage up sooner & therefore pay a lot less interest.

AGB is right on all counts SpearCarrier.
Buy buy buy.......

agcB

DJ's problem is that with house prices as they are at the moment in Dublin, a small house similar to the one you describe will cost him about £250,000, unless he wants to move to somewhere more than 50 miles from Dublin and spend 3 - 4 hours commuting each day. Loans are cheap these days, so a loan for 250,000 shouldn't cost too much, but if the Irish economy ever flags, as it must inevitably do eventually, interest rates will rise and our friend will be in dire straits.

But house prices will not - in the long term - ever go down.

The best time to buy a house is always at least five years ago.

B

Actually it was better to buy a house 6 and a half years ago, than five years ago Fortunately I did. It's risen by about 80% since then. Unfortunately so have all the other places. House prices in the South-east are crazy.

BBS

I would echo many of the comments made earlier. It is of course horses for courses. My thoughts are given from Brit market POV.

What I would say is that house prices have almost reached the point where first-time buyers cannot get into the market. That was when the market collapsed last time. It took about 8 years before they'd recovered to their previous high because by then wages had risen and people could start to afford to buy again. In the meantime many were stuck with negative equity (mortgage less than house price) and therefore could not afford to move.

If you're going to buy, you may want to consider what the effects of being stuck with the same house for the next 5 years are. If you're only contracting, could that become an issue in moving on?

Bit more house-price history. Part of the reason why house prices rose so quickly in the late 1980s was because of the chancellor's decision to abolish double tax-relief in April 1989. Therefore people rushed into buying houses together. Market forces dictated lots of gazumping and prices rising. These people then experienced problems when a) they decided they didn't want to live together anymore, but neither could afford to buy the other out. b) when interest rate rose to 15% in 1992 due to a decision to choice the ERM (exchange rate mechanism).

Even more history ... there is a popular misconception that house prices had never fallen before the 1989 crash. This is not actually true. It also occurred twice during the 1970s. However the effects of high inflation masked this and house prices appear to continue to rise, although in real terms they didn't.

BBS

PS If you do decide to buy, get as big as you can possibly afford.

DJ

The thing to think about is how long are you intending to stay in one place, the costs of selling one house buying another and moving are crippling unless you have spent a reasonable amount of time there.

That is of course assuming that you have no intention of becoming a part time builder, buying a tip doing it up and selling on to increase your capital.

My only advice would be to watch how much you borrow, Lenders seem to be happy to lend an excessive amount to people because they know that if you fail to pay up they get the house and you end up with nothing.

Excepting those who suffered the double whammy of being made redundant as well, The people who got into serious trouble in the last UK reccession were those who had followed the advice to borrow as much as you can to get into or move up the housing market during the boom and ended up with too much debt to be able to ride out the storm when interest rates rose and house prices fell back.

So don't borrow more than you feel confident of being capable of keeping up the payments on if rates rise.

The turn of this thread is extremely worrying to your Wand'rin ma. You do realise that your present Dublin address is the longest you have stayed in any one house so far in your life? (unless you were more than 3 years in the same school boarding house?) Maybe you ought to be looking for conversions in Smithfield? ()

I'm only 2 years in the current house.
Cost to me £9,0000
Asset value £0.

Makes my car look like a good investment .

£90000?!! That's a lot of rent

I'm a first time buyer (or I was 9 months ago) and I could afford it. They told me then that the market was essentially out of the reach of first time buyers - tosh! Only if you are too picky on where you want to live.
The old adage about location, location, location is soooo true when buying a house.
What they never say is that its your budget that is the prime factor in choosing a location.
I had a choice of living in the area of Birmingham I really wanted to (Harborne for anyone who knows it) or somewhere a bit further away - my budget would *just* stretch to a one bedroomed flat in Harborne. In fact I now own a three bedroomed end terrace (essentially a semi as there's only three in the terrace) with a driveway, conservatory and nice backgarden - I also think I did well on location as there is an old filled in canal directly behind my backgarden that is scheduled to be redeveloped soon. That means that when they finish doing up the canal I can take my back fence down and have a garden overlooking the canal and park behind - added equity there methinks. This house is only 30 minutes walk from central Harborne - what a difference in house price!

I think what I'm trying to say is that the house market is does not necessarily move up to nightmare levels en-bloc. Some so-called less desirable areas remain cheap and in fact can turn out to be fine after all and (hopefully) a better investment than the current most popular areas which may well have reached their current peak.

Sorry - that should be £9,000...
Still, my rent for the house is now £850pcm (that's Irish punts, btw.)

However, my _main_ problem is that I have expensive tastes due, in part, to the fact that I am renting in an area where I could not afford to buy.

I figure a "decent" 2 bed flat is in the £175,000 to £250,000 range. Hmmm....

Well, you're going to have to make a hard decision then.

Remember that you are a first time buyer - assuming the doom-mongerers on this thread are wrong (which they may not be of course) remember that you are only on the first rung of the house buying/selling market. When after a time you decide to sell you will have almost certainly built up a fairly good wedge of equity (in this respect the difference between your mortgage value and the actual house value) and this can be put on top of a new mortgage and likley you will be able to afford a *much* better property. Unless you have a rich girlfriend you're unlikely to get your dream house in your first buy.

Please let us know what you decide to do, DJ!

Well, I am good at doling out advice, but now I am facing the same dilemma.

I had thought I would be a European nomad, with the UK as my one fixed location.

But it looks like Stockholm may be my other fixed point.

Decsions decsions decsions....

a nomad called Ben

I've put the decision on the back burner for (yet) another year as I've to save money for weddings and the associated bits and pieces.
That said I am reasonably confident that the Irish house market will remain stable for the duration and that the interest base rate will be low for a good while to come so I'm targetting some of my savinbgs toward a deposit.
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Great!

How many weddings are you planning on?

Yes, I don't think you need to subscribe to the family bigamy tendency

I'm groom in one and drunk friend in one other next summer
(OK the latter only involves travelling to the other end of Ireland, but it's still a cost).