Who dares wins I say...!
If things go pear shaped again (deffo on the cards with Osbourne)
I think there is likely to be trouble ahead but not sure why you imply only if with a change of government.
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House buying - as expensive as possible or pay off the mortgage early?
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Posted 2 years ago #
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Friends bought a two bedroom flat in central London for 120k in 1998 interest only. Australians, said they weren't going to bother with a savings vehicle for it, they were going to sell it when they went back home. Oh how we laughed at their foolishness. For the first year, anyway.
Posted 2 years ago # -
That is true to an extent but there have been problems with government household statistics in the past as they did not factor in that some single people live together, I don't know to what extent these errors have been corrected, you may well do.
I just wonder whether we should look to Japan's experience post 1991 as a guide to what can happen to an economy that has suffered a severe asset bubble.
Posted 2 years ago # -
Japan may be an indication of our model to come..., but even though sterling was overvalued, I dont think it was as overvalued as the Yen prior to 91.
Posted 2 years ago # -
I agree I think their asset over-valuation and that of their currency was much larger, but their past is a possible future scenario for our economy as they had similar issues. There seem to be very few who recognise this.
Posted 2 years ago # -
but I dont think it will manifast itself as year on year devaluations. I see flat values for a number of years at least until interest rates start rising, by which time wage inflation should have caught up with asset affordability again and we'll start to see slow growth again.
Posted 2 years ago # -
Stoner - have you got a blog, or similar, for your build? Quite interested in following it.
Posted 2 years ago # -
MS YGM
Posted 2 years ago # -
Stonor - that is my gut feel as well, it would be pretentious to call it an analysis in my case but it does depend upon the right economic decisions being made.
Posted 2 years ago # -
Im not sure the right decisions need to be made neccessarily. Either the market and/or the IMF will do it for us if the next government dont get their finger out. It just may be an uglier sh1tstorm on the way through the trough.
Posted 2 years ago # -
Debt forces you into wage slavery. Decide what you want in 10 years - tied down with a fancy house, or free with a smaller house.
Posted 2 years ago # -
Your age is a factor, if say under 35 and with good income prospects tat maight point towards the interest only option.
Another point is that housing isn't the only or necessarily best savings vehicle. If mortage is smaller you can put more into ISAs and pension and they each have various tax and other advantages.
Or you could just blow it on bikes, holidays, eating out, fur coats whatever. I've got to 41 and the thought of a 4x salary mortgage fills me with dread.
Posted 2 years ago # -
Reached 50 last year. Retired from full time work. Paid off mortgage and now enjoying a part-time job in a bike shop. In a few years times, my daughter will leave High School and we'll sell the "family" house to buy something smaller.
That was achievable by making sure I didn't have a huge mortgage to pay off, so to me it's a no-brainer.
Posted 2 years ago # -
Consider a smaller house which has options to extend. That way your outgoings are initially low (small house) which may present the option of paying off the mortgage faster. In a few years should you find you need something bigger you can extend rather than move if it suits. Extending is a lot cheaper than moving!
Posted 2 years ago # -
We became mortgage free last year, me at the age of 39, wife at the age of 37, I'd like to say this was astute financial management, it wasn't but what the heck!
Much better to own house and be able to "enjoy" the money that would previosuly disappeared each month on the mortgage - even if enjoying it means stacking it in savings rather than spending it!!
Posted 2 years ago # -
Druidh - the 'smaller' retirement houses round ours are actually going for more than the bigger family house. The 2-bed bungalow beside me had a right old bun-fight going on, sold for £70K more than the next door 3-bed was going for!
Posted 2 years ago # -
I'm really surprised people still buy into the 'you can't lose buying property' line.
Interesting piece from the Economist suggesting UK property is still way overpriced
There are always a lot of people interested in talking up property prices and there are a lot of different metrics people use to justify their beliefs (first time buyers, prices to rents, average price as a multiple of average incomes etc) and by many of them prices still look high.
It's pretty evident that house prices are driven purely by supply, demand and sentiment - there's little link to any underlying asset - hence the rises of the last year while very little property was for sale.
When interest rates rise, and rise they will at some point, theres a whole great deal of buy-to-let fall out still to come. I've also read an interesting view regarding our aging population that says that as the baby boomers downsize and die off you'll get a big glut of property being sold and not enough buyers which will drive prices down.
Posted 2 years ago # -
Buy big, be a wage slave until you drop dead from stress and overwork age 64.
Buy adequate for your needs, lead a stress free life with knowledge your mortgage is affordale, have it paid off by age 45, semi-retire at 50, enjoy life, see the world, still be riding your bike at 80.
I'm defo on the later option
Posted 2 years ago #
Topic Closed
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