Someone on this forum just bought his first house (me :D )

[IBM]

Sorry, am I the only one to wonder at the use of the word 'rubbishrubbishrubbishrubbishrubbish' as a verb?

It's just not right.

You can rubbishrubbishrubbishrubbishrubbish £100k's on a Ferrari

[JPreston]

As in 'to spend money wastefully', i.e. liberally and carelessly splashing it around. Is that not in common use then?

[Clunk]

To liberally and carelessly splash rubbishrubbishrubbishrubbishrubbish around is probably illegal and almost as antisocial as smoking

[JPreston]

Buy your own house, you can do whatever you want in it...

[manwithnoname]

...
Place i viewed earlyer this week. Currently let at 1300PCM, asking price of 250k (would offer just under stamp threshold).

...

Is stamp duty paid at 125K - or 150k for a 'regenerated area', am I missing something - has something changed?

[TheAnimus]

Is stamp duty paid at 125K - or 150k for a 'regenerated area', am I missing something - has something changed?

There are some expemtions for certain areas, but i'm not aware of any of this information, i'd imagine that getting these exeptions is damn hard, and is only for the super rich developer types. Not that i'm disalusioned with the notion of stamp duty.

But it always anoys me, because the rate of stamp duty jumps up at 250k. 7.5k, vrs 2.499k for 249,999£ house.

Flat rate tax really does make sense.

[manwithnoname]

ouch didn't know it jumped to 3% at 250k, mind you that at bit out of my price range...

[Rave]

Rave, You seem to be forgetting what you get when you buy a house is the land, as well as the building materials and labour. That's the reason property insurance is for much less than the cost of the house itself - you can rebuild the house if it explodes etc. It's also the reason that prices will tend to go up over time. No one is making land anymore, and the people demanding it is increasing.

There's no shortage of land in this country. We're one of the most densely populated countries in Europe, and yet percentage wise more of our land area is undeveloped than any other country in Europe. Something like 89% of our land area is undeveloped; thanks to crazy EU subsidies, much of it is just sitting there.

As for demand increasing- that depends on whether immigration continues to fill the gaps created by our declining birthrate. As taxes continue to rise to pay for our increasingly aging population's pensions, are immigrants going to keep on coming here to work, or are they going to go where they can keep more of what they make? Or stay in their own developing countries? Who can say. There's certainly no guarantee that our population will keep increasing.

I bought my first place in 2001 with a 102% mortgage. It wasn't in the best area it wasn't exactly what I wanted. It needed some cosmetic work. 3 years later, the equity in there allowed me to buy the perfect house in the perfect location.

...well, it allowed you to put a deposit down on your perfect place, surely? Anyway....so what? 2001-2004 was when rampant house price inflation really took off. Of course you made loads of equity as prices went through the roof. It's unlikely that anyone who buys now will not make anything like the same gains in the next three years. IMO they'll make a loss.

You must have a very accomodating landlord if he/she is prepared to let you rent at the same rate for the next 5 years, even more so for the next 20 years.

Rents are set by the market. If my landlord tries to charge me more than the going rate, I'll simply move- or threaten to. If he's not a fool he'll drop the subject.

I'm currently paying £950 PCM. Let's say that he wants £1000, and so I move out. Even if it only takes him one month to find a tenant willing to pay £1000, it'll still take him another 19 months to make up for the loss entailed in a 1 month void and start making a profit. He's also chucked out a reliable tenant who never moans unless there's a genuine problem with the house.

Market rents in my area have not risen much, if at all, in the last 4 years.

okay rave, i'll try and explain this really simply.

Place i viewed earlyer this week. Currently let at 1300PCM, asking price of 250k (would offer just under stamp threshold).

Well, then either the asking price is too cheap, or the tenants are paying too much. In the Docklands I could rent a flat right next to the one my dad paid £300,000 for for £250pw. Nationwide, average rental yields vs. asking price are under 5%.

Now granted not everyone is just a good credit risk that they get some of these no tie in below base offerings. So lets assume a 7% over 25 years. Cost per month £1350.

The BBC mortgage calculator reckoned that £225,000 at 7% would be £1312 a month for the interest only, £1608 for a 25 year repayment.

So your 'wasting' £50 a month, at first, but your rent is never going too go up (enless you want to pay off your mortgage faster, which is a good idea of course if you can afford it, not too mention there are good deals which can be re-mortgaged every 2 years too better suite your income)/

If you mean that your mortgage payment is never going to go up, that depends entirely upon the length of your interest rate fix.

Now lets say the flat devalues and never recovers, it stays at 100k for ever. Thats 100k from a £50 a month investment if you where renting.

How so? £1300 would only get you an I/O mortgage as I've already pointed out. To be fair, many people with a decent income and a good deposit can still get a long term fix (say 10 years) at under 6%....but as I said, £1300 is an unusually high rent as well.

And the i'm too poor is a piss poor excuse. You can easily afford 1k a month on 28k, which assuming you buy with someone in the same situation, is more than ample for payments.

Yes, but why assume that I'm buying with someone in the same situation? My parents managed to buy a house (and subsequently upgrade) with my Mum either not working or working part time because she was raising three children (of which I was the eldest). How the hell are my wife and I supposed to have a family if she's got to work full time just to meet the interest payments on our mortgage?

I'll tell you how- by renting, and waiting.

[greektony]

Could you not buy and live in a bus?

[JPreston]

So Rave because you want to support a stay-at-home wife, have children, earn only an average salary and still buy a house while in your 20's but find you cannot afford to, this is proof that houses are over-priced and will crash?

You also keep overlooking a point that others have made above but maybe has to be spelled out; you might think that 'market rents have stayed the same for 4 years' but you are ignoring inflation, which will increase your rent every year by ~2% for the rest of your life, compounding annually. My mortgage rate will go up and down for sure, but the amount I originally borrowed is a fixed historic amount. What do you think that will make your rent look like in 5, 10, 15, 20 years' time, compared to my mortgage repayments?

[Rave]

So Rave because you want to support a stay-at-home wife,

Actually ATM she works, just not very hard.

have children, earn only an average salary and still buy a house while in your 20's but find you cannot afford to, this is proof that houses are over-priced and will crash?

That's part of the proof, yes. House prices have always reverted to their historical norm of 3.5x the average salary and I have faith that they will again. I can't see that anything actually is different this time, however hard the vested interests try to argue that it is.

You also keep overlooking a point that others have made above but maybe has to be spelled out; you might think that 'market rents have stayed the same for 4 years' but you are ignoring inflation,

No, I'm not. I said that rents have stayed the same, and they have, at least in my area. In September 2003, two weeks before my wife and I got married, we rented a bog standard, average for our area 1 bed flat for £650pcm. When we moved out in Ocotber 2006 the going rate for a 1-bed flat was....£650, which was what our old flat was re-advertised at. So in nominal terms rents have stayed the same, in inflation adjusted terms they've got cheaper. Which, incidentally, is what you might expect, given the increasing number of BTL landlords competing for tenants.

So please don't presume to tell me what I'm overlooking. I'm not stupid, and I'm not dishonest.

which will increase your rent every year by ~2% for the rest of your life, compounding annually. My mortgage rate will go up and down for sure, but the amount I originally borrowed is a fixed historic amount. What do you think that will make your rent look like in 5, 10, 15, 20 years' time, compared to my mortgage repayments?

Who gives a toss? When rents become more expensive than mortgage interest payments, which I expect to happen sometime in the next 5 years, let alone the next 25, then I'll buy. As I've said over and over again in this thread.

[Moonshade]

Wow, congrats mate .
I wish I could have one too, but they're all so expensive! As for the decorating part, that must be fun actually getting to decorate as you want and make it personal.

Good Luck with it .

-- Moonshade

[TheAnimus]

Rave, i can't deep link the one i want but have a look at:

http://www.moneysupermarket.com/mortgage

you can easily get a repayment plan for £1350 a month, with a 10% deposite, assuming your willing to shop around every 2-3 years.

[JPreston]

....
No, I'm not. I said that rents have stayed the same, and they have....in nominal terms rents have stayed the same, in inflation adjusted terms they've got cheaper...Who gives a toss? When rents become more expensive than mortgage interest payments, which I expect to happen sometime in the next 5 years, let alone the next 25, then I'll buy....

Right I'm with Nick; and I'm out of this thread after this post. There's just no talking sense to some people, this is turning into another 'plane on a treadmill' scenario.

When (if) you buy, it will be after another X years of inflation. If the house you eventually buy is worth £300k in today's money, then even on-target low inflation will mean that you will need to put by £6k of new savings every year just to keep up. Inflation will be increasing your rent in tandem - not every year, but sooner or later your landlord will turf you out if you do not accept this. In fact the only thing that is not being affected by inflation is the capital amount I borrowed to buy my house. That's getting cheaper in real terms even without me paying it off, thank you very much.

You continue to ignore inflation, and all you doing is relying on rental market rates to fall in real terms every year in perpetuity just to keep a roof over your head, while loudly criticising homeowners for exposing themselves to a risk of some capital loss, if they have to sell up and have to start renting under very specific and hypothetical conditions such that the price of their specific home has fallen since they bought, conditions that have never occurred except under the very shortest of timescales. In which case they might lose a few thousand, that they have already financed over 25 years. All the while there are more mundane, sure-fire ways to lose thousands of pounds that they are probably doing including buying a car or going on holiday.

If you aren't going to save much more than £6k a year, then yes you will need a drop in the market rates of houses if you are ever to afford one but that does not prove that they are over-priced - only that some people can't afford to buy. The fact that your parents could is irrelevant, maybe they were just more financially minded than you. For my own experience, my parents had to work much harder than me to buy their house, took more than twice as long to pay it off as I will, and their house (a large 3 bed semi with 120ft garden in a stamp duty exempt area) was recently sold for £130k. By me. While being perfectly consistent in my thinking and understanding of the market at a similar time I bought a house for nearly twice as much.

There's plenty of affordable houses being sold, but not everyone can afford can afford every house. That is what has always been the case - and not whatever cherry-picked indicators of (un)affordability you like to provide.

[dangel]

So about this plane on a treadmill thing..

[MadduckUK]

no leave the plane on a treadmill thing alone!