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Not all of them, but yeah.
Next Stop Recession?
- Thread starter GeoffCapes
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Scaf
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My daughter has just bought he first flat, 1 bed in Boxmoor 265k. She and her partner are both teachers so I imagine about £60k earnings between them.
They both saved for the deposit.
Biggest outgoing for many younger generation is lease cars, they think nothing of paying £200 - £300 or even £400 per month. That is a saving that many could make and would be meaningfully.
My daughter and her partner have secondhand fully owned cars.
They both saved for the deposit.
Biggest outgoing for many younger generation is lease cars, they think nothing of paying £200 - £300 or even £400 per month. That is a saving that many could make and would be meaningfully.
My daughter and her partner have secondhand fully owned cars.
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2b1ask1
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4 of my 5 have become homeowners in recent years, the last (youngest) works in the city and will probably earn more than the rest put together! At the moment though, he has only recently completed his official apprenticeship term and his wages were capped as a result. It won’t take him long to fly up the salary ladder where he is and he is squirrelling away the maximum his ICEA?’s will let him as a deposit, he will be looking for a flat in the city or Docklands soon enough.
They all had time at home rent free to allow them to save and that worked, nearly broke us but there you go. If we hadn’t had kids, no doubt I’d be in a string of Ferraris, but I wouldn’t be as rich in life
They all had time at home rent free to allow them to save and that worked, nearly broke us but there you go. If we hadn’t had kids, no doubt I’d be in a string of Ferraris, but I wouldn’t be as rich in life
DLax69
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...present company excepted, thank you very much!
Sam McGoo
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With such broad and knowledgeable members that I'm sure have experience in this, this seems as good a place and thread as any to ask for opinions/advice, as its the potential recession and inflation that's got me considering changing my long term plans.
We have two rental properties, that were previously our individual homes before we bought together. We bought them in 2001 and 2004 and have been renting them out since 2007. My plan has always been to keep them for as long as possible and possibly add to the portfolio along the way for future capital growth as well as an income and maybe even into retirement.
They have served us very well, and obviously have increased in value significantly in that time. Due to mortgages being so cheap throughout most of that period, it enabled us to borrow against them and get our modest 'forever' home (or at least until we downsize in later life). We have been in that for 10 years now.
I've been doing the (rough) sums, and are now at the point where at today's prices we could sell both rentals and pay off our residential mortgage, which sounds amazing, is very tempting and much earlier in life (I'm 44) than I could have ever imagined a decade ago.
The reason it was never really the plan in the past, was the maths. Due to cheap borrowing and rents climbing, having the debt of 3 mortgages didn't bother me one bit as it meant the income from the rentals was almost paying all 3 mortgages anyway, plus the bonus of capital growth.
My thoughts for possibly changing my mind -
-All 3 mortgages come out of their fixed deals at various points over the next 2 years, so obviously they won't be anywhere near as cheap on renewal.
-House prices are very likely to fall fairly hard in the near future.
- If the **** really hits the fan, ww3, redundancy etc, we own our house, and that would be comforting.
Thoughts for remaining on plan -
So who would like to share their opinions?
What would you do?
We have two rental properties, that were previously our individual homes before we bought together. We bought them in 2001 and 2004 and have been renting them out since 2007. My plan has always been to keep them for as long as possible and possibly add to the portfolio along the way for future capital growth as well as an income and maybe even into retirement.
They have served us very well, and obviously have increased in value significantly in that time. Due to mortgages being so cheap throughout most of that period, it enabled us to borrow against them and get our modest 'forever' home (or at least until we downsize in later life). We have been in that for 10 years now.
I've been doing the (rough) sums, and are now at the point where at today's prices we could sell both rentals and pay off our residential mortgage, which sounds amazing, is very tempting and much earlier in life (I'm 44) than I could have ever imagined a decade ago.
The reason it was never really the plan in the past, was the maths. Due to cheap borrowing and rents climbing, having the debt of 3 mortgages didn't bother me one bit as it meant the income from the rentals was almost paying all 3 mortgages anyway, plus the bonus of capital growth.
My thoughts for possibly changing my mind -
-All 3 mortgages come out of their fixed deals at various points over the next 2 years, so obviously they won't be anywhere near as cheap on renewal.
-House prices are very likely to fall fairly hard in the near future.
- If I wanted to get back into property again, wait till they are cheap. (Sell now high, buy again low)
- Recession and cost of living crisis meaning tenants might not pay rent etc..
- If the **** really hits the fan, ww3, redundancy etc, we own our house, and that would be comforting.
Thoughts for remaining on plan -
- property has served me very well over the last 22 years and without it wouldn't be anywhere near where I am now. It 'should' continue to do well in the long term.
- We rode out the downturn in 2008 without any real problems despite going into negative equity on our previous residential home .....will this one be worse ?
- Plan to semi-retire around 55 (11 years from now) so if I ride it out, its quite likely it'll have fully recovered to at least what it is now by then.
- No hassle with having to sell two houses, sitting tenants, asking them to leave etc...
So who would like to share their opinions?
What would you do?
philw696
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Very interesting Sam and have done it myself as advised to when self employed and thought it good at the time but in all honesty glad I'm not doing it anymore but I was in NZ for a few years and had to trust agents and certainly wouldn't do that again.
I'm 60 shortly so at a different phase in my life to you guys.
We still have the place in NZ and that has skyrocketed for a house built like a shed really.
Simple life all the way for us and no worrying what if this or that might happen.
Interested to see what others think.
I'm 60 shortly so at a different phase in my life to you guys.
We still have the place in NZ and that has skyrocketed for a house built like a shed really.
Simple life all the way for us and no worrying what if this or that might happen.
Interested to see what others think.
Sam McGoo
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A financial advisor? That's what you guys are for!
Seriously though, I dare say professional advice wouldn't go a miss, but are there any that don't want to sell you something or another? lol
Regarding capital gains tax, I have taken that into account on my calculations, just not the smaller things like estate agent fees, costs etc..
rockits
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What was the mortgage rate in 1988 out of interest?
Wattie
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Seems like a reasonable plan to me Sam as long as you factor in all taxes etc.
Paying off the mortgage is a huge financial “Freedom“ move and in my experience theres a lot to be said for that.
Dont get greedy……a bird in hand etc.
If you were selling to put the proceeds in the bank or some other sort of investment, my answer would be different and I’d tell you to keep the houses…..better the devil you know…..
We’ll done (nice decision to be able to make) and good luck, whatever you decide.
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CatmanV2
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I was going to proffer my opinion on this, but felt my financial advice is probably not the best either
C
MarkMas
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From memory in 1988 it was about 10% but it rose to 18% in 1990, I think.
MarkMas
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Ah, here you go:
Mortgage Interest Rates | Tracker Discounted and Fixed rate mortgages
The following is a detailed description of the different types of interest rates including Bank of England base rate, SVR's, BRT's, Fixed & Capped rates
www.keystonemortgages.co.uk
GeoffCapes
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The only way you lose money on property is if you sell (when prices have fallen).
Personally, I'd keep the houses.
House prices will undoubtedly fall, but that just means more people will want/need to rent. If you wanted a bit more financial freedom, sell one and halve your mortgage.
You still have the income/nest egg of the other.
Personally, I'd keep the houses.
House prices will undoubtedly fall, but that just means more people will want/need to rent. If you wanted a bit more financial freedom, sell one and halve your mortgage.
You still have the income/nest egg of the other.
rockits
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I guess to get a better comparison from 2022 to 1988 we would need to work out say the average UK house price, average UK mortgage rate and average UK salary for both years to get a decent idea of how 2022 compares to 1988 in real terms. I expect it is more expensive now but I wouldn't be surprised to find it is closer than most people think or guess when adjusted. Maybe a percentage of salary spent on mortgage for an average UK house would be a fairly decent comparison. Maybe even might need to work on gross figures to get an easy comparison.
However, you could even introduce tax rates as not sure if nett pay will be less or more in real terms in 2022 compared to 1988. You can't really make a decent comparison really between 1988 and 2022 unless you make a decent real world comparison.
However, you could even introduce tax rates as not sure if nett pay will be less or more in real terms in 2022 compared to 1988. You can't really make a decent comparison really between 1988 and 2022 unless you make a decent real world comparison.
Wattie
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That’s a game of chance - when he has an opportunity to clear a mortgage. It could be a liability if rates continue to rise and house prices fall.
Renters might not be able to afford rent that matched mortgage rates.
The semi greed game.
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Wattie
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“
However, you could even introduce tax rates as not sure if nett pay will be less or more in real terms in 2022 compared to 1988. You can't really make a decent comparison really between 1988 and 2022 unless you make a decent real world comparison”
All that waffle to answer your own question Dean.
thinks are in a far more fecked up on a scale than 1988….. as u well know
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rockits
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“
However, you could even introduce tax rates as not sure if nett pay will be less or more in real terms in 2022 compared to 1988. You can't really make a decent comparison really between 1988 and 2022 unless you make a decent real world comparison”
All that waffle to answer your own question Dean.
thinks are in a far more fecked up on a scale than 1988….. as u well know
LOL....if I get bored at some point I might work it out!
Wattie
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