Nice House vs nice Car? Which takes priority?
Discussion
Colonial said:
Whatever works for the individual.
Who the f
k cares whether bob down the street rents or own or what car he owns.
Work out what works for you. Do that.
Exactly. I've no need for a big house with expansive grounds. Daughter is all grown up and will be doing her own thing soon, so the requirement or even desire for anything bigger or more expensive than the flat I'm in these days just isn't there. Who the f
k cares whether bob down the street rents or own or what car he owns. Work out what works for you. Do that.
Driver101 said:
It looks a bit wrong when you see a flash car in a rough area. I feel nervous leaving my car parked there, so they must feel uncomfortable living there.
Perhaps. But it is also possible that a flash car is owned by someone who is not let us say known by the locals for being honest. This means if you damage their car, bad things may visit you. But nice house v nice car? Why not have both? A "Nice" car can be had for little money - my TVR isn't worth as much as a new mondeo but it is a nice car IMHO.
The house I guess. But anyone on here with a decent sized mortgage is kidding themselves if they think they're going to make money on a property. By the time you take stamp duty and mortgage interest into account you won't be making any money that was all made by our parents generation who dare to lecture us on fiscal responsibility having overseen an unrealistic and hyperinflated property market.
djc206 said:
The house I guess. But anyone on here with a decent sized mortgage is kidding themselves if they think they're going to make money on a property. By the time you take stamp duty and mortgage interest into account you won't be making any money that was all made by our parents generation who dare to lecture us on fiscal responsibility having overseen an unrealistic and hyperinflated property market.
djc206 said:
The house I guess. But anyone on here with a decent sized mortgage is kidding themselves if they think they're going to make money on a property. By the time you take stamp duty and mortgage interest into account you won't be making any money that was all made by our parents generation who dare to lecture us on fiscal responsibility having overseen an unrealistic and hyperinflated property market.
Don't be so silly... people make millions from property investment.nct001 said:
Don't be so silly... people make millions from property investment.
Lucky people. Buy a half million pound house with a 90% mortgage as most people in their 20's/30's around here have to do and you'll be lucky to make a penny. There is still a small amount of money to be made from buying wrecks and renovating but not as much as there was 10 years ago. Stamp duty bands don't help.I'm not saying you can't make money on property of course you can, you buy to let and let someone else pay your mortgage for you but on your home there's not much meat left on that bone unless you live in london
GTID said:
All depends on your own circumstances I think. Myself for example, mid-late twenties saving to buy a house with the missus but also considering going for a new car on PCP. I'm fortunate enough to be in a position where I can afford to do both.
If I were in your shoes knowing what I know now I'd take the monthly cost of the PCP and overpay your mortgage by that much. Even if you only do it for the two or three years your PCP would have run for and then redirect the money elsewhere it will make a massive, massive difference to the length and cost of your mortgage. charltjr said:
If I were in your shoes knowing what I know now I'd take the monthly cost of the PCP and overpay your mortgage by that much. Even if you only do it for the two or three years your PCP would have run for and then redirect the money elsewhere it will make a massive, massive difference to the length and cost of your mortgage.
Absolutely. I was pleasantly surprised how many years I could chop off the mortgage with overpayments, and how many thousands in interest you save, and I did exactly that - took a mortgage out in my mid twenties, had it paid off completely by my early thirties owing to putting loads into overpayments each month. Yeah it meant I couldn't spend as much as cars or other things during those years, but I can sure as hell make up for that now with no mortgage payments at all coming out of my account each month. 
Edited by kathyp on Saturday 9th August 18:33
djc206 said:
Lucky people. Buy a half million pound house with a 90% mortgage as most people in their 20's/30's around here have to do and you'll be lucky to make a penny. There is still a small amount of money to be made from buying wrecks and renovating but not as much as there was 10 years ago. Stamp duty bands don't help.
I'm not saying you can't make money on property of course you can, you buy to let and let someone else pay your mortgage for you but on your home there's not much meat left on that bone unless you live in london
Bloke buys house at £500k puts down £100k and mortgages the rest. Over the next 25 years he pays his mortgage and let's say he averages 5% over that time. I'm not saying you can't make money on property of course you can, you buy to let and let someone else pay your mortgage for you but on your home there's not much meat left on that bone unless you live in london
He will pay back just over £700k so plus his £100k that's £800k without any other capex on the property in that time he could easily spend £100k on upkeep and mods. So in 25 years would his house double almost in value?
I think it would.
MajorProblem said:
Bloke buys house at £500k puts down £100k and mortgages the rest. Over the next 25 years he pays his mortgage and let's say he averages 5% over that time.
He will pay back just over £700k so plus his £100k that's £800k without any other capex on the property in that time he could easily spend £100k on upkeep and mods. So in 25 years would his house double almost in value?
I think it would.
Most likely but that doesn't account for inflation. 5%? Ha not likelyHe will pay back just over £700k so plus his £100k that's £800k without any other capex on the property in that time he could easily spend £100k on upkeep and mods. So in 25 years would his house double almost in value?
I think it would.
Live up north; you can do both on relatively small amount of money.
One thing to consider in all of this is.... work like fk, drive a snotter and then have your mortgage cleared in, say, ten years. Only problem is that in ten years it's going to be a pretty miserable and expensive experience to drive, and I suspect that the PHers dream, the V8, will not be a viable option for all but the very rich indeed. My point being - maybe you'd better scratch the nice car itch now?
One thing to consider in all of this is.... work like f
k, drive a snotter and then have your mortgage cleared in, say, ten years. Only problem is that in ten years it's going to be a pretty miserable and expensive experience to drive, and I suspect that the PHers dream, the V8, will not be a viable option for all but the very rich indeed. My point being - maybe you'd better scratch the nice car itch now? djc206 said:
The house I guess. But anyone on here with a decent sized mortgage is kidding themselves if they think they're going to make money on a property. By the time you take stamp duty and mortgage interest into account you won't be making any money that was all made by our parents generation who dare to lecture us on fiscal responsibility having overseen an unrealistic and hyperinflated property market.
Rubbish ... I have a portfolio in the NE that has a purchase point of around 600k, they are now collectively almost double, gathered over the past 7yrs, numbering into double digits. Yes they are low end housing but everyone needs somewhere to live and it's easier to make money from low end than high (in y experience) ... All 10yr mortgages so some are almost paid off. Not a bad return in my book, considering i haven't paid for a single one of them.
swerni said:
Off set against paying £1000 rent a month for the next 25 years and seeing no return on the £300k spent
I'm not for a moment advocating a life of paying other peoples mortgages I'm just saying there is a huge amount of delusion surrounding home purchases and making money.Edited by djc206 on Saturday 9th August 19:20
djc206 said:
swerni said:
Off set against paying £1000 rent a month for the next 25 years and seeing no return on the £300k spent
I'm not for a moment advocating a life of paying other peoples mortgages I'm just saying their is a huge amount of delusion surrounding home purchases and making money.X5TUU said:
Rubbish ... I have a portfolio in the NE that has a purchase point of around 600k, they are now collectively almost double, gathered over the past 7yrs, numbering into double digits. Yes they are low end housing but everyone needs somewhere to live and it's easier to make money from low end than high (in y experience) ... All 10yr mortgages so some are almost paid off.
Not a bad return in my book, considering i haven't paid for a single one of them.
My original post was far too vague, blame typing it out on an iphone and getting constant posting errors.Not a bad return in my book, considering i haven't paid for a single one of them.
I was also typing with my south centric head on. What I should have written was buying a house around here I personally have virtually no chance of making any money on a home, home not house/property (I don't on a car either!). With the 250k band at the first time buyer position there's no money to be made there, with the 500k band at the decent size family home position there's no money to be made there either. As you and others have correctly pointed out the way to make money is buy to let, basically take advantage of other peoples ability to pay rent or have it paid for them but not get or have the desire to get a mortgage. Something I have every intention of doing myself once my girlfriend and I have sorted out our own home. My original point was how deluded so many people are over how much they are going to make on their homes. Chances are anyone buying now in the South and other high cost areas will not make any money in real terms.
The example given above is a £500k house with £400k mortgage over 25 years. Stamp duty is £15k, interest is going to be about £400k. So your house costs you £915k not accounting for inflation. Throw that into the mix and you need to see about £1.25 million give or take £100k in 25 years time. Will that happen? Not likely given that the market down here has outstripped wages for so long that a stagnation if not correction is long overdue. Something that rising interest rates will surely cause as mortgages of that size become unobtainable to all but the highest earners. Of course there are ways of reducing the price you need to see such as overpaying now while interest rates are low.
By contrast my parents sold their house for 5 times what they paid for it after 15 years, no work on the house required. That's not going to happen again in my lifetime.
Good for you for doing so well. My girlfriend owns a house up north, lovely place worth about the same as a 1 bed flat down here, ridiculous. My intention is to buy to let up there once we've sorted our own place out down here.
retrorider said:
I tend to agree with you.Reading this thread it makes me wonder how the country is in the state its in (all posts seem very sensible on the whole).But,people were having it all a few years ago and borrowing against the value of their homes to fund the nice cars.Such a relief to many that the housing price crash didn't materialise.
I work with a few people who bought at the wrong time and have serious negative equity. One of my neighbours bought her house 6 or 7 years ago for £370k ish, she'd be lucky to see £275k for it now. Chances are someone will try to lowball at £250k so that their stamp duty is credit cardable rather than a begging call to the bank of mum and dad. I'd imagine that there would have been a lot of sleepless nights for those with large mortgages in 2008/9djc206 said:
X5TUU said:
Rubbish ... I have a portfolio in the NE that has a purchase point of around 600k, they are now collectively almost double, gathered over the past 7yrs, numbering into double digits. Yes they are low end housing but everyone needs somewhere to live and it's easier to make money from low end than high (in y experience) ... All 10yr mortgages so some are almost paid off.
Not a bad return in my book, considering i haven't paid for a single one of them.
My original post was far too vague, blame typing it out on an iphone and getting constant posting errors.Not a bad return in my book, considering i haven't paid for a single one of them.
I was also typing with my south centric head on. What I should have written was buying a house around here I personally have virtually no chance of making any money on a home, home not house/property (I don't on a car either!). With the 250k band at the first time buyer position there's no money to be made there, with the 500k band at the decent size family home position there's no money to be made there either. As you and others have correctly pointed out the way to make money is buy to let, basically take advantage of other peoples ability to pay rent or have it paid for them but not get or have the desire to get a mortgage. Something I have every intention of doing myself once my girlfriend and I have sorted out our own home. My original point was how deluded so many people are over how much they are going to make on their homes. Chances are anyone buying now in the South and other high cost areas will not make any money in real terms.
The example given above is a £500k house with £400k mortgage over 25 years. Stamp duty is £15k, interest is going to be about £400k. So your house costs you £915k not accounting for inflation. Throw that into the mix and you need to see about £1.25 million give or take £100k in 25 years time. Will that happen? Not likely given that the market down here has outstripped wages for so long that a stagnation if not correction is long overdue. Something that rising interest rates will surely cause as mortgages of that size become unobtainable to all but the highest earners. Of course there are ways of reducing the price you need to see such as overpaying now while interest rates are low.
By contrast my parents sold their house for 5 times what they paid for it after 15 years, no work on the house required. That's not going to happen again in my lifetime.
Good for you for doing so well. My girlfriend owns a house up north, lovely place worth about the same as a 1 bed flat down here, ridiculous. My intention is to buy to let up there once we've sorted our own place out down here.
djc206 said:
I work with a few people who bought at the wrong time and have serious negative equity. One of my neighbours bought her house 6 or 7 years ago for £370k ish, she'd be lucky to see £275k for it now. Chances are someone will try to lowball at £250k so that their stamp duty is credit cardable rather than a begging call to the bank of mum and dad. I'd imagine that there would have been a lot of sleepless nights for those with large mortgages in 2008/9
Yup, in 2008 I had a 5 x salary mortgage that I should have never taken. Frightening. Luckily we are not in negative equity but have lost 20% in value. Gassing Station | General Gassing | Top of Page | What's New | My Stuff