House deposit or car?

[Lazydonkey]

I didn't have a nice car until I was 30 as the house / flat always came first and although it hurt at the time I don't reget it.

Although to mkeans point there isn't any point in having a nice car if you can't afford to do things with it. Although vx / Elise's arent expensive to run relative to the alternatives they do still cost money to keep them in the best of shape. I there is a possibility that money may be tight I'd stick with the Clio.

[campbell]

Nobody on this forum can decide whats right for you, just giving a counter argument to the "buy the most expensive house you cant really afford" brigade.

Your story is an inspiring one, Neil. If only more people in the UK had had their sensible hats on too, over the last 10-15 years

Although I re-read the other posts but couldn't find anyone from the ' "buy the most expensive house you cant really afford" brigade' ? Wouldn''t want Easty to be misled. I don't think anyone was advocating that?

(Although Sparky did mention a garage for the Lotus, I suppose ).

[scottishselise]

Campbell, no-one directly typed it, but it's sort of the words you hear (in my head and had heard from people as well, typically because they have done well out of it) when you hear the 'buy, buy, buy, now, now, now'. I do anyway and I assume that's what he is getting at. A worthy post, Neil.

edit: Fair point Neil.

Buy house.

[neil]

House first, car later. Over time property is only likely to increase in value so the sooner you get on the ladder the better off you're likely to be in the long term. Plus the attraction of living at the inlaws will wear out at some point - they might also feel you're taking advantage of them if you get a flash car while paying them minimal rent.

[H8OAG]

FWIW we are both 23 (well I will be in a few weeks) and live, quite happily, at her parents house and pay minimal rent. We have no debts and will be looking to buy a place in Aberdeen - £160-180K. I

Why don't you ask your in-laws faction?



PS
I have a fookin huge house and a few cars

[mckeann]

Haha, But Mr Boag is "considerably richer than yowwwww"

I'm not saying dont buy a house, i bought a house before i bought a lotus. I'm only saying that you dont HAVE to buy the most expensive house, which is what i hear as advice from 99% of people (admittedly Campbell, no one on here said that, but it is my experience in the real world)

[campbell]

Yep, fair enough - totally understand if that's the flavour.

There is a balance to strike between "get on the property ladder at all costs" and "blow your cash on fast cars and women" (I paraphrase of course!). Owning your own home is probably no longer the golden goal it once was, but until the UK property market shifts to similar lines to some European ones - where long-term renting is the norm - we are stuck with it.

Taking McKean's argument to its logical conclusion, it is about balancing the use of one's disposable income between the cost of providing a secure and comfortable home vs the opportunity to "enjoy life". You can choose to do that whether you rent OR buy. The key difference is if you buy, then for possibly the same monthly outlay (or pehaps even less?) you can end up with an asset behind you in 20 years. If you rent, you are building someone else's asset and will ultimately have nothing (or even a negative sum) to show for that choice.

Anyway, all getting too technical here!

The other positive thing about McKean's analysis is the sense of risk management. Only buy what you can afford. This was my previous point about "sensible hats on". Maxing out what the lender will offer you may seem worth a shot at the time, but even though many have now reined in what they'll lend you, only you can make the call if you can continue to fund it if times were to get tough.

[H8OAG]

WankR (Mckean )

You had the tears rolling down my cheeks with your prose
You should write Mills and Boon romances in between " cracking off" and polluting the atmosphere in the Forth Valley

On a more serious note
I would be interested as to what the current market prices are on the £120k house that you and Nic originally fancied?

[ed]

Why don't you ask your in-laws faction?



PS
I have a fookin huge house and a few cars

You can live in your car but you can't track yer hoose!

But seriously:
I've spunked my fair share of cash on cars etc ( granted i had an awesome time and met a load of decent folk doing it) but if I'd been more sensible I'd probably now have both. Bide your time, it with be worth it in the long run!

[renmure]

To be fair, if you have the financial discipline (and either funds or income stream to allow it) then it does make sense to make these type of decisions where you focus only on the overall cost of ownership.

The idea of spending (eg) £10k now on a car in the full knowledge that you are turning it into £7k when you want the money back in a year or so is fine as long as you are aware that is what you are doing. There are also the hidden costs (well, not really hidden, more just put out of mind) that your that your new car is likely to cost a bit more to run and insure and service, so it is easy to turn your £10k into £6k .. but again, that isn't really a problem if is is thought out before hand.

Again, if you have the discipline and income then I think something like a One Account, CAM Account or even Offset Mortgage Account lets you play these type of scenarios out for real.

[mckeann]

WankR (Mckean )

You had the tears rolling down my cheeks with your prose
You should write Mills and Boon romances in between " cracking off" and polluting the atmosphere in the Forth Valley

On a more serious note
I would be interested as to what the current market prices are on the £120k house that you and Nic originally fancied?

I know where your heading. My 60K house is probably worth 100K now, the 120K house is probably worth 200K now. SO i could have 'made' money if i had bought the more expensive house. Except, you have to sell the house to make money dont you?? And i would have missed out on the past 9 years of living a great life. I would also have been stressed out my nut every time redundancy was mentioned.

I'm not saying dont do it, i'm just saying, go into it with your eyes open, and do what you want, not what other people tell you is the right choice. Plenty of my friends got on the housing market in 2007 at huge expense, and are now in negative equity if they were to sell. House prices may go down as well as up

Ok Mr Boag, you can shoot me down in flames now

[H8OAG]

Ok Mr Boag, you can shoot me down in flames now

Nope!
Potential for milking this one a bit more.................



In percentage terms your house in terms of investment potential has done better than the fancy one!
I was, in the interests of balance ,trying to underpin a "having your cake and eat it argument" where you could still sell your house to first time buyers at a premium and buy the fancy one at today's market rate.............and still be able to fund your hedonistic lifestyle

[tut]

FWIW we are both 23 (well I will be in a few weeks) and live, quite happily, at her parents house and pay minimal rent. We have no debts and will be looking to buy a place in Aberdeen - £160-180K. I

PS
I have a fookin huge house and a few cars

I have an even fookin huger house and a few cars.

[PhilA]

i had the same problem once....
i saved up 20k... but i blew it on an elise...
unfortunatly the elise went 18 months later and i got a house.

if i had got the house first, i would have been able to get the Elise as well a bit later on...

as it stands, theres fat chance ill get another elise unless i start my own successful company (which i am constantly thinking about).

So... from my experience... house Then car...
Biggest cost of a house is the mortgage - get a good enough deposit, and buy sooner, and u will have much less out goings.

/wish i could start again faction

[OlberJ]

Houses are cheap just now, the longer it takes to get the deposit together the more chance you have of the house you want getting more and more expensive.

Much better to get the house and then let it appreciate after you've bought it.