Chart of the day

[BlasterBates]

Would you care to elaborate? Why would you be mad?

Now lets do the sums

Sell your house for 275K, invested at 5% (easy peasy) gives you over a grand month income, rent a flat for £1200 (again easy peasy) means renting you'd be 350 smackeroonies better off.

[ALM]

How is that you manage to pay £350 a month for property worth 275k? Did you buy it when it cost 60k? What's the pure interest rate on your loan and what's the repayment?

I originally bought a 3-bed terrace house in South london for £78K in 1999. I sold the house last year for just under £240K I used the equity as a deposit on my current place in North London. I'm paying a not-so-competitive rate of 5.4% on a flexible mortgage with the Abbey.

My only concern for the likes of you and BlasterB is that unless a crash does materialise you guys have missed a major opportunity to retire early. I honeslty think you should think about about hunting down some of the few property bargains still out there. The market has and will adjust but don't count on it crashing.

[Francko]

[...]My only concern for the likes of you and BlasterB is that unless a crash does materialise you guys have missed a major opportunity to retire early. [..]

ALM, those people are simply red of jealousy since we, who bought in the late 90s already have a retirement plan (especially if we cashed in a smaller flat with no mortgage as I did) to rely on, while they will struggle until their last days hitting their heads on the wall thinking how better they would have been had they bought it before.

However, to those who think that buying now is a great investment I would dare to say that it's not as we can't expect prices to go up a lot more (if they keep going up which is not even guaranteed in the next years). Last but not least, I think the first house is still the best investment since 99% of the people are not such great savers (and why should we be, we only live once) so even if they would be better off by investing in the financial markets, most of the people just blow money off in cars and tropical holidays.

[sasguru]

UK House Price Graph since 1960

[AtW]

I originally bought a 3-bed terrace house in South london for £78K in 1999.

Its a good fair price and I would not say anything against person choosing to buy property for this price unless rent is like £100 a month for it.

Buts its another matter to buy SAME property NOW for £275k -- its insane and I am not taking part in this insanity.

The market has and will adjust but don't count on it crashing.

Crash is a big drop in price in a short term -- I am fine with slow landing which is big drop in price over 2-3 years: I have nowhere to hurry because I don't have problem with morgage.

[BlasterBates]

I sold the house last year for just under £240K

good move

I used the equity as a deposit on my current place in North London.

[AtW]

I was planning to buy a big house in mid-2000 on millions I would have had from stock options in my ex-ex-employer's .COM - bloody boo.com screwed this all up

[xoggoth]

Bloody hell Z you're old. Pushing my age. Unless of course you are one of those inferior sort who did not go to university.

[sasguru]

Atw, your comments on the trend chart I posted earlier?

[ALM]

Atw,

I can understand your reluctance to pay over the odds for a property. However, I clearly remember facing the same dilemma when I bought my 1st place in 1998/1999. I was a fresh graduate on £18K and was surrounded by tales of how everyone had bought there places for half the price in the mid 90s. I too found it slightly offensive buying a house of someone who had payed a pittance for it only a few years earlier.

Had I not taken the plunge in 98 I would be significantly worse off today. At this moment in time renting is cheaper for you becuase you are sharing a house with someone. What happens when you get married or start a family and dont wan't to share?

Even if you live in London you can save a £50K deposit and buy a decent small semi in Zone 3/4 for around £250K. Rent a couple of rooms to help you pay the mortage. I think you'll find that your no worse off with a foot on the property ladder!