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Central Bank to limit amount banks lend for home purchase
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Michael D Not Higgins wrote: »Sell your apartment Trish and you won't encounter the 20% rule, since you're in negative equity.
It will be sold in 2016 tenant still has 10 months lease on it, I am going to speak to a broker next week who is going to advise me on everything. Hopefully I will know where to go from there if I sell now I will be in negative equity of about 17K the banks wont let that go so it will still have to be paid.
I will find a solution one way or another.0 -
Ah here. Ours is an economy where various VI's line up to fleece ordinary joes, usually with the aid and approval of the government.
Not sure how this proves the idea that we live in a unfettered free market capitalistic society, where the markets rule and everyone else can go to hell.
My point is that we don't live in such a society. Ours is a mixed economy. There is a legitimate expectation that the govt, regulators, the EU, and others have a duty of care to protect citizens from the excesses of the market.
Are those in negative equity now totally blameless, no of course not. However, it is wrong IMO to simply throw them to the wolves now. The govt, regulators, and others badly failed these people0 -
Where did I say anything about how long you are together? The average person enters employment around 21-23, so they would have 15 years of employment behind them by the time they are 38. 15 years accrues a lot of savings, even if it was only a small amount per month.
If you haven't been prudent with your spending, and only saving for the last 2 years, then it is a bit rich to be complaining about these new rules. These new rules are now in place for this exact reason.
So you are saying that every 21-23 year old the minute they start employment decide to start saving for a house when they are 38 ? that does not happen.
Most people only start making plans to buy a house or get married whatever the case maybe when they are together a while or a year or so.
You can't say this is what every person does across the board because that is just not how it happens, everyone is different.
The fact of the matter is I was going by the previous rules 10%, legal fees, stamp duty etc and the talk of the new rules only came out about October so no one knew if it was going to happen so in fact we were doing things the right way saving each month but now our plans will have to change that is all !0 -
TrishSimon wrote: »Incorrect once again, the apartment will be sold but just not at the moment because the tenant still has some time on the lease 10 months in fact and any LL knows there are penalties if you break a lease and tenants also have rights, what the tenant pays me per month covers the mortgage, maintenance fee and life assurance. My plan has always been to sell the apartment and the tenant knows this but I did not want to sell the apartment and buy in the one year I was planning on buying a house in 2015 and in 2016 the apartment would be sold.
I have the apartment at a lower rent because the tenant herself owns and rents her place out its a very rural home and not suitable for her job in Dublin. I also don't charge the going rate on the place because she keeps it in brilliant condition, I never have any hassle from her and she always pays on time and this is more important then making a profit from it, plus the more money you make from it the more income tax you pay...did you ever think of that ??
I actually had it rented out full price to a couple before this girl who on leaving caused me 1800 worth of damage so you tell me which is more important ??
I am not cribbing about the apartment I know what has to be done with it I dont need or want it as an investment all I want is a home for me and my husband which we were saving towards for 2.5 years, because of the new rules this has now changed and it will be a few more years before we can buy a house nothing more nothing less. We have worked hard to save and pay off debt like most people. Everything is not as straight forward as you think it is Michael D not Higgins.
If you were renting for 900 v let's say 700 now, then the damage is more than covered by the deposit and the higher rent collected, not to mention that you can pursue them for the damage through the PRTB. What's to say that you won't have damage when this tenant leaves (maybe unintentionally)?
Why do you not want to sell and buy in the same year? Why did you grant the tenant a further lease when you intend to sell? It would have made more sense to go to Part 4 and allow yourself that leeway.
Everything could have been as straight forward as I thought.0 -
TrishSimon wrote: »So you are saying that every 21-23 year old the minute they start employment decide to start saving for a house when they are 38 ? that does not happen.
Most people only start making plans to buy a house or get married whatever the case maybe when they are together a while or a year or so.
You can't say this is what every person does across the board because that is just not how it happens, everyone is different.
The fact of the matter is I was going by the previous rules 10%, legal fees, stamp duty etc and the talk of the new rules only came out about October so no one knew if it was going to happen so in fact we were doing things the right way saving each month but now our plans will have to change that is all !
The thing is Trish, if the OP wants to wind you up when you're down, that's the way to go about it. Suggest you're feckless for not staring to save at 23 etc. There's always a way to try to make someone feel bad on the Internet. But it will work out for you - I think you need to see how it all settles down over the next couple of months.0 -
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TrishSimon wrote: »So you are saying that every 21-23 year old the minute they start employment decide to start saving for a house when they are 38 ? that does not happen.
Most prudent young people I know who enter the work force at that age do indeed begin to save money, to some extent at least, from that point onwards. Others certainly decide to splash the new found cash, but hey, that's the beauty of the world we live in, we are all free to chose our own path.0 -
Michael D Not Higgins wrote: »If you were renting for 900 v let's say 700 now, then the damage is more than covered by the deposit and the higher rent collected, not to mention that you can pursue them for the damage through the PRTB. What's to say that you won't have damage when this tenant leaves (maybe unintentionally)?
Why do you not want to sell and buy in the same year? Why did you grant the tenant a further lease when you intend to sell? It would have made more sense to go to Part 4 and allow yourself that leeway.
Everything could have been as straight forward as I thought.
I did keep the deposit from the first tenants but still had to come up with 900 more money to fix the place up and replace furniture, I know the apartment is being kept in good condition as I have been up there a few times last year when replacing items for her, I also know the tenant from some years back and she is a very respectable person and being a home owner herself I know she will not wreck the place.
I gave her another lease because she asked me too, but I did tell her that the plan has always been to sell the apartment once we had bought and she knows this and has no problem with it. I dont want to sell and buy in the same year as its alot of hassle and costs for estate agents, legal fees etc which I am sure you understand plus most of the houses we can afford need work so again money will be needed for that.
This thread has gone way off topic people are focusing on the fact I have an apartment like I am some greedy investor so I am not going to comment anymore on here and will unfollow.
Thank you to all who actually gave some sound advice and to those who didn't good luck !0 -
by the seaside wrote: »The thing is Trish, if the OP wants to wind you up when you're down, that's the way to go about it. Suggest you're feckless for not staring to save at 23 etc. There's always a way to try to make someone feel bad on the Internet. But it will work out for you - I think you need to see how it all settles down over the next couple of months.
True thanks...0 -
How are they being thrown to the wolves, exactly? Because they are expected to pay back what they borrowed?Are those in negative equity now totally blameless, no of course not. However, it is wrong IMO to simply throw them to the wolves now. The govt, regulators, and others badly failed these people
What about people who put their life savings in bank shares? Pensioners who put their pension pots in them? Do you propose that the taxpayer is hit to restore their savings to them?0 -
desertcircus wrote: »I live with my wife, and our bills barely clear 200 a month. Our food bill for eating at home is well under a hundred quid a week. I genuinely cannot understand how a childless couple can't spend less than 700 a month on groceries and bills.
€200/month on bills? That's not a realistic representative of the average at all. Gonna assume you mean in the height of summer where no heating is required which is misleading since you should be spreading your increased winter expenditure across the year.
For 2 people living together
Electricity per month: €40 (low ball)
Gas per month: €40 (equalised for the year)
Car Insurance/Car Tax/Car Fuel (x2): ~€250 (really low ball) (Insert other transport costs here if no cars)
Phoneline/Broadband: €35
House/Contents Insurance: €20
Health Insurance: €50
This is by no means an exhaustive list and seriously underestimated and already well over double your €200 per month. The bank's benchmark on lending criteria is to look at take home pay per month AFTER rent or mortgage payments, allocate €900 per month per adult and only take what's remaining after that into consideration for lending criteria.0 -
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TrishSimon wrote: »This thread has gone way off topic people are focusing on the fact I have an apartment like I am some greedy investor so I am not going to comment anymore on here and will unfollow.
I can't see how it is gone off topic at all?
Nobody is trying to make you out as a 'greedy investor', but the fact that you own a property which is rented out definitely has an influence on the debate from your perspective.0 -
When I was in my early 20s, I assumed that some day I would want a property that I owned, so I started to save for it as property is known to be expensive.TrishSimon wrote: »Most people only start making plans to buy a house or get married whatever the case maybe when they are together a while or a year or so.
I didn't decide to start saving only once I'd decided to marry somebody, as I wouldn't be able to save much in such a short period of time.0 -
Folks I'm gonna lock this up for a while so that you can all retreat from your keyboards and calm down.
Service will resume later.
Thanks0 -
€200/month on bills? That's not a realistic representative of the average at all. Gonna assume you mean in the height of summer where no heating is required which is misleading since you should be spreading your increased winter expenditure across the year.
For 2 people living together
Electricity per month: €40 (low ball)
Gas per month: €40 (equalised for the year)
Car Insurance/Car Tax/Car Fuel (x2): ~€250 (really low ball) (Insert other transport costs here if no cars)
Phoneline/Broadband: €35
House/Contents Insurance: €20
Health Insurance: €50
This is by no means an exhaustive list and seriously underestimated and already well over double your €200 per month. The bank's benchmark on lending criteria is to look at take home pay per month AFTER rent or mortgage payments, allocate €900 per month per adult and only take what's remaining after that into consideration for lending criteria.
To answer this:
1. The person I was responding to listed their car expenses separately to their bills, so that's 250 a month gone from your estimate.
2. No, I didn't mean in the height of summer. All our bills are spread across the year; we overpay in summer and underpay in winter.
3. The figures for electricity and gas are about right for us, so that's 80. We don't have house insurance, as we have a policy of only insuring things whose losses would leave us utterly ruined. We don't have health insurance, because for two people in their late twenties/early thirties who rarely if ever get ill, it's not a necessary product (and it's something huge swathes of the population do without, unlike heating, electricity and TV). We spend a decent amount on TV and broadband, but even for the few months a year when we get Sky Sports it comes to 115. Netflix is 7 a month, but to be honest, I kind of forget I even pay for that - until recently, it came out of my day-to-day spending account rather than our bills account because it was so small.
So: our bills come in at slightly under 200 a month (about 150 a month when we don't have the sports channels). You can add the TV licence and bins, but that adds maybe 20-25 at most. I didn't include our mobiles, which was an oversight, so let's add 40 for those. I'm looking at a figure now of about 220 per month for household bills.
I stand by what I said: a thousand quid for a childless couple to cover food and household bills is quite a bit, especially if they're talking about saving for a house.0 -
desertcircus wrote: »To answer this:
1. The person I was responding to listed their car expenses separately to their bills, so that's 250 a month gone from your estimate.
2. No, I didn't mean in the height of summer. All our bills are spread across the year; we overpay in summer and underpay in winter.
3. The figures for electricity and gas are about right for us, so that's 80. We don't have house insurance, as we have a policy of only insuring things whose losses would leave us utterly ruined. We don't have health insurance, because for two people in their late twenties/early thirties who rarely if ever get ill, it's not a necessary product (and it's something huge swathes of the population do without, unlike heating, electricity and TV). We spend a decent amount on TV and broadband, but even for the few months a year when we get Sky Sports it comes to 115. Netflix is 7 a month, but to be honest, I kind of forget I even pay for that - until recently, it came out of my day-to-day spending account rather than our bills account because it was so small.
So: our bills come in at slightly under 200 a month (about 150 a month when we don't have the sports channels). You can add the TV licence and bins, but that adds maybe 20-25 at most. I didn't include our mobiles, which was an oversight, so let's add 40 for those. I'm looking at a figure now of about 220 per month for household bills.
I stand by what I said: a thousand quid for a childless couple to cover food and household bills is quite a bit, especially if they're talking about saving for a house.
Hang on, you have a policy of "only insuring things whose losses would leave [you] utterly ruined" but you haven't insured your home? So if there was a fire.....
You don't have health insurance either. What if there was an accident? You don't ever need health (or home) insurance until you do. Trust me.
You also haven't accounted for water charges which will very soon be a reality and I budgeted for in my figures. There's 3 fairly big figures right there.
You forgot about your Sky/Netflix bill and your mobile bills. Now throw in TV license and bins (annual + per bin). TV License is €14, bin tags are €9 a pop plus €8 per month for the annual charge. If you put out your bin once a month then that's €31 a month which is already 25% more expensive than you've estimated. Then throw in management fees, which are around another €15 a month. That's €46 plus your Sky/Netflix, plus your mobile bills for both of you. That surely totals well over another €100 per month, if not €150. Which is nearly 100% more than you were estimating. And another €150-200 for the insurance and water charges above which is again another 100% more than you estimated.
It's no wonder you don't understand how peoples bills are as high as they are. You underestimate some costs, forget others and don't pay for things that most people do. And look if that works for you then fair enough, but it doesn't, and can't, work for everyone. So basing your assumptions on purely your own experience is a massively flawed way of looking at things.0 -
Thanks for demonstrating the truth of what I said. Using the budget you have outlined here, someone could spend €100 per week on food and booze, and have €2,000 per annum to pay for clothes, holidays and so forth. And STILL save 10k per year each for property. In five years, assuming no pay rises, and zero interest, that's 100k of a deposit for a couple.Now this right here is the kind of crazy nonsense I was talking about.
Income|€2,500
|
Pension (a low one at 5%)|€125
Rent (Dublin rent halved based on a couple)|€450
Health Insurance (basic)|€50
Mortgage Savings|€1,000
|
Remaining Income|€875
That seems like a lot for a month doesn't it? But what would the cost of living be in Dublin at the moment?
Commuting (public transport within the city limits)|€100
Food (conservative estimate)|€250
Bills (Water, Electricity, Gas/Heating, TV License etc halved based on couple)|€100
Mobile Phone Bill|€20
|
Remaining Income|€425
This is all best case scenario here and we've yet to put clothes on our back or pay for a car or save for anything else other than a house. Nevermind go for a couple of drinks with friends or on a cheap holiday in Ireland.
This kind of crap about "expensive holidays" or "on the booze every weekend" is total and utter nonsense of the highest order. And shows a complete lack of understanding as to how much every day life costs, especially in cities.
Now you can object and say that only spending €200 per week for a couple on food and drink isn't enough, but then I would suggest there is scope for economising even there.
And of course you might want a shiny new car with a big engine, and maybe you feel you deserve designer clothes, and to only eat in the finest restaurants. Fine - do all that stuff. But then STFU about not being able to save for a bloody house. HOUSES ARE EXPENSIVE. If you aren't willing to save for one, why should you bloody well have one?
Christ, the country is full of people with the most childishly entitled attitudes these days.
(by the way, I commuted by bike. Bike was €150, so that's another €1000 per annum extra saved from your budget)0 -
RecordStraight wrote: »Thanks for demonstrating the truth of what I said. Using the budget you have outlined here, someone could spend €100 per week on food and booze, and have €2,000 per annum to pay for clothes, holidays and so forth. And STILL save 10k per year each for property. In five years, assuming no pay rises, and zero interest, that's 100k of a deposit for a couple.
Now you can object and say that only spending €200 per week for a couple on food and drink isn't enough, but then I would suggest there is scope for economising even there.
And of course you might want a shiny new car with a big engine, and maybe you feel you deserve designer clothes, and to only eath in the finest restaurants. Fine - do all that stuff. But then STFU about not being able to save for a bloody house. HOUSES ARE EXPENSIVE. If you aren't willing to save for one, why should you bloody well have one?
Christ, the country is full of people with the most childishly entitled attitudes these days.
Have you even the slightest idea what I'm saying? Saving for a house isn't a problem. Saving for 20% of the cost of a house is. That's far too much. It's twice what the OECD recommended. While you can probably make cuts left and right to make it possible to buy a house in 5 years we should not have to choose between a life and a house for 5 years. That's a hell of a long time. Maybe not when you're 20, but when you're 34 it is.
And that doesn't mean a fancy new car and great holidays and nights out twice a week. That's a ridiculous scenario that you've simply made up for yourself. There's a happy and reasonable middle ground.0 -
I don't agree that it's such a long time It's the biggest purchase most people will make in their lifetime - so it's important that there's a proper commitment to it by the buyer - so they've had time to plan for it/work towards it/fully realise the implications, etc...we should not have to choose between a life and a house for 5 years. That's a hell of a long time. Maybe not when you're 20, but when you're 34 it is.
If you are already 34 then I do empathise. Perhaps you should have started to plan ahead a few years back? I know that under these circumstances - and this measure being applied to people that were preparing to buy is frustrating - but it had to be applied sometime. But then 20% down wasn't really applied for ftb'ers - unless you're not a ftb'er or are chasing something above 220k?0 -
Says you. With the myriad sources of credit available, and the eagerness of families to lend/gift money - plus the tide of cash that has been hitting the market - perhaps it is not enough?Have you even the slightest idea what I'm saying? Saving for a house isn't a problem. Saving for 20% of the cost of a house is. That's far too much.
So for the man-children who make it to 34 before they realise they might someday want to own a property, everyone else has to suffer massive credit-driven price rises, and a possible re-run of the bubble? And this melodramatic nonsense about 'not having a life' - more entitled rubbish. Going on the piss every weekend isn't obligatory. Big wardrobes of designer clothes are not 'life'. Expensive holidays are nice, but they are not 'life'. If you have not learned this yet, I can see how these rules will bother you.It's twice what the OECD recommended. While you can probably make cuts left and right to make it possible to buy a house in 5 years we should not have to choose between a life and a house for 5 years. That's a hell of a long time. Maybe not when you're 20, but when you're 34 it is.
I'm telling you I saved that much at that rate with that kind of income. It's not a made-up scenario, it's real life in a world where property is bloody expensive and you have to save to buy stuff.And that doesn't mean a fancy new car and great holidays and nights out twice a week. That's a ridiculous scenario that you've simply made up for yourself. There's a happy and reasonable middle ground.
'Gimme gimme now' didn't pan out very well last time; the only ridiculous scenario here is those arguing to bring back the conditions that led to the last ruinous bubble.0 -
RecordStraight wrote: »'Gimme gimme now' didn't pan out very well last time; the only ridiculous scenario here is those arguing to bring back the conditions that led to the last ruinous bubble.
Ah look if this is the kind of bs you want to respond with then you can forget about it. I have no problem paying my way, never have done. I have no crazy demands for what I believe is rightfully mine. I just feel asking people to save 20% of what city house prices are in the immediate aftermath of a recession makes very little sense. We can get to where you are talking about without these drastic measures. If you don't agree then fine, but I'd appreciate it if you stopped being so bloody patronising. I don't know where you get your crap about going on the piss every weekend or designer clothes. Like I said you're simply making that stuff up to make your argument seem valid. But it's all nonsense. If you can't be reasonable though there's no point in discussing it further.0 -
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It makes perfect sense. And you completely ignore the likelihood that less credit will result in lower prices, which is good news for every potential buyer.Ah look if this is the kind of bs you want to respond with then you can forget about it. I have no problem paying my way, never have done. I have no crazy demands for what I believe is rightfully mine. I just feel asking people to save 20% of what city house prices are in the immediate aftermath of a recession makes very little sense.
I don't understand your objection here. You kindly laid out a budget showing that it was perfectly possible for a single person to save €1000 per month and still have over €100 per week for food and clothing. Allowing an extra €2000 for holidays and whatever, that's still €10k per year PER PERSON in savings.We can get to where you are talking about without these drastic measures. If you don't agree then fine, but I'd appreciate it if you stopped being so bloody patronising. I don't know where you get your crap about going on the piss every weekend or designer clothes. Like I said you're simply making that stuff up to make your argument seem valid. But it's all nonsense. If you can't be reasonable though there's no point in discussing it further.
Living a reasonably lifestyle, you can save a lot very fast. If you are more interested in spending your money on your notion of 'living' (I'm not sure where you see the money going, unless on cars, holidays and entertainment?) then don't complain about not being able to save.
Case in point: I have a sister who buys a new car every two years (currently a VW Scirocco) and always has the latest phone, iPad, iMac, etc. etc. - yet she complains that she is broke. I have a 5 year-old laptop that I got from work. I drive an older car I got for 4k but works fine. My phones last until they break. And I have the money in the bank to buy a house.
Everyone is free to choose what they do with their limited resources. But you don't hear me complaining about my crummy computer or my tatty phone.0 -
makeorbrake wrote: »I don't agree that it's such a long time It's the biggest purchase most people will make in their lifetime - so it's important that there's a proper commitment to it by the buyer - so they've had time to plan for it/work towards it/fully realise the implications, etc.
If you are already 34 then I do empathise. Perhaps you should have started to plan ahead a few years back? I know that under these circumstances - and this measure being applied to people that were preparing to buy is frustrating - but it had to be applied sometime. But then 20% down wasn't really applied for ftb'ers - unless you're not a ftb'er or are chasing something above 220k?
Well for starters you won't get many homes (if any at all) in Dublin for 220k. Secondly the issue here is that I'm not a FTB, but a home owner who is just coming out of negative equity (having bought 10 years ago, i.e. years before the peak, on the far side of the city from family, friends and work so we didn't overspend). We tried to be sensible. We didn't reach above our capacity despite the opportunities to. We then struggled like so many others during the recession (admittedly we were both lucky to stay in employment). So now we have nowhere near enough savings for 20% of a reasonable home in Dublin, no equity from our home and therefore no potential to trade up. At an age when you want to start a family that is kind of a barrier. We could manage 10%, which is the real kicker. We could manage what was required only a week or so ago. We can also manage what the OECD recommend. But we would have to spend the next few years saving like mad to afford what these new rules demand. So our choice is start a family without the trade up or put the family off for years (which is obviously a bad choice given our age).
For two people who have been working hard for 15+ years, who have paid their way in every part of their lives, who have worked bloody hard to improve their lot over that time (and done reasonably well by all accounts) and who have tried to be as sensible as possible to be left in that position is a bit s**t. Forget what people like RecordStraight say. I haven't been on a proper holiday in a few years. I rarely go out for pints and I can count on one hand the number of items of clothes that I have bought in the last 12 months. None of which, btw, were designer. The only debt I have is the mortgage and car loan, both of which are joint loans with my wife (we have the one car to save money). RS will have you believe that if you can't save €1k a month then you're throwing money away on frivolities. It may be the case for some, but it is certainly not the case for most.0 -
Mollyjh, you bought around 2005, well into bubble territory. I believe you when you say you have not been living the high life, so clearly my comments are not directed at you. You have been throwing a lot of money at the negative equity that arose from buying at a very bad time, presumably leading a fairly disciplined existence. My observations were with reference to first time buyers.For two people who have been working hard for 15+ years, who have paid their way in every part of their lives, who have worked bloody hard to improve their lot over that time (and done reasonably well by all accounts) and who have tried to be as sensible as possible to be left in that position is a bit s**t. Forget what people like RecordStraight say. I haven't been on a proper holiday in a few years. I rarely go out for pints and I can count on one hand the number of items of clothes that I have bought in the last 12 months. None of which, btw, were designer. The only debt I have is the mortgage and car loan, both of which are joint loans with my wife (we have the one car to save money).
Have you checked that the 20% deposit rule will actually affect you? I have a notion that those in negative equity are exempted, and, additionally, banks can lend 20% of their total mortgage book to people who are outside the general rule. If you have a track record of paying down your debt in a disciplined manner, you would appear to be a prime candidate for such a loan.0 -
RecordStraight wrote: »Mollyjh, you bought around 2005, well into bubble territory. I believe you when you say you have not been living the high life, so clearly my comments are not directed at you. You have been throwing a lot of money at the negative equity that arose from buying at a very bad time, presumably leading a fairly disciplined existence. My observations were with reference to first time buyers.
Have you checked that the 20% deposit rule will actually affect you? I have a notion that those in negative equity are exempted, and, additionally, banks can lend 20% of their total mortgage book to people who are outside the general rule. If you have a track record of paying down your debt in a disciplined manner, you would appear to be a prime candidate for such a loan.
We bought in 2004, well into the bubble but still a few years from the peak. As I said we moved to the opposite side of the city to avoid the ridiculous mortgages we were seeing in the areas we initially wanted to buy. We've been looking at buying again recently because we seem to be coming out of negative equity now, just about.
We haven't been tight about spending our money but we haven't been throwing it around either. We've been living a fairly average life. We might head out once a month with friends and go for dinner once or twice a month. But these are exactly the things people shouldn't have to sacrifice in the name of property. There should be happy medium. And if I want a bigger, fancier house then I make more sacrifices to get it. But if I just want something average I shouldn't have to structure half a decade of my life around it, giving up anything and everything else in the process.
The way it should work is that you save like mad for your first house. Then when you want to trade up you should have equity from your home to put towards the new house (because you'll have paid off some of your mortgage at that stage). You can add savings to that, but the equity is where the bulk of the money comes from. We've paid off €45k of our mortgage. That should put into some perspective where the issue comes from. When you have a home you simply can't save as much. The things can be money pits in some ways. Plus in that time there's likely to be a wedding (again people shouldn't have to forego that) and whatever other expenses people start to accrue as they move out of their 20s. Being able to take little or nothing from your home in terms of equity basically means you've pissed the deposit for that house plus all the subsequent mortgage payments down the drain.
So I support the idea that we need to move to a more stable property market. I'm a first hand example of exactly why it needs to happen. But this move is so drastic and sudden that it's screwing over the people who most need help right now. It was a lazy answer to a complicated problem. And that the rental market wasn't dealt with first I find utterly baffling as it forces others (not me) to rent for longer in a market that is out of control. Which hinders their ability to save. As I said, a lazy answer to a complicated problem.0 -
We bought in 2004, well into the bubble but still a few years from the peak. As I said we moved to the opposite side of the city to avoid the ridiculous mortgages we were seeing in the areas we initially wanted to buy. We've been looking at buying again recently because we seem to be coming out of negative equity now, just about.
We haven't been tight about spending our money but we haven't been throwing it around either. We've been living a fairly average life. We might head out once a month with friends and go for dinner once or twice a month. But these are exactly the things people shouldn't have to sacrifice in the name of property. There should be happy medium. And if I want a bigger, fancier house then I make more sacrifices to get it. But if I just want something average I shouldn't have to structure half a decade of my life around it, giving up anything and everything else in the process.
The way it should work is that you save like mad for your first house. Then when you want to trade up you should have equity from your home to put towards the new house (because you'll have paid off some of your mortgage at that stage). You can add savings to that, but the equity is where the bulk of the money comes from. We've paid off €45k of our mortgage. That should put into some perspective where the issue comes from. When you have a home you simply can't save as much. The things can be money pits in some ways. Plus in that time there's likely to be a wedding (again people shouldn't have to forego that) and whatever other expenses people start to accrue as they move out of their 20s. Being able to take little or nothing from your home in terms of equity basically means you've pissed the deposit for that house plus all the subsequent mortgage payments down the drain.
So I support the idea that we need to move to a more stable property market. I'm a first hand example of exactly why it needs to happen. But this move is so drastic and sudden that it's screwing over the people who most need help right now. It was a lazy answer to a complicated problem. And that the rental market wasn't dealt with first I find utterly baffling as it forces others (not me) to rent for longer in a market that is out of control. Which hinders their ability to save. As I said, a lazy answer to a complicated problem.
For what it's worth I don't think the 20% rule will have any effect in Dublin, and certainly not SCD, supply is too limited. I take it from your posts that you moved from the south side to the north side, as property was too expensive on the south side?
Unfortunately I think you're in a rock and a hard place here, property in SCD if that's where you're talking about, is the most desirable in the country and you'll find it very difficult to get to where you want.
Maybe you could buy in North Wicklow? I'm sorry but the facts are you can't afford that area, irregardless of family etc, it's unfortunate for average people who grew up in these now very desirable locations.
However what you have saved may be the deposit for a place further out, sorry but in life you have to face the tough decisions, if buying in your preferred location is off the table, and it is irregardless of people screaming about the injustice of it all, then you need to see what options you have left, any go with. the one that you think you could tolerate.0 -
Fourth line of monthly expenses.irelandrover wrote: »Where are you getting 10K in savings per person per year?
At the end of the second table all that is left is 425 per month. Multiply that by 12 and you have little over 5000 per year. And that is without and sort of life or clothes or unexpected expense.Mortgage Savings €1,000
Of course if you can live at home, you'll save more again. Unfortunately I didn't have that option.0 -
RecordStraight wrote: »Fourth line of expenses.
Saw that on second reading and deleted my post. It's too early.0 -
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Hang on, you have a policy of "only insuring things whose losses would leave [you] utterly ruined" but you haven't insured your home? So if there was a fire.....
You don't have health insurance either. What if there was an accident? You don't ever need health (or home) insurance until you do. Trust me.
You also haven't accounted for water charges which will very soon be a reality and I budgeted for in my figures. There's 3 fairly big figures right there.
You forgot about your Sky/Netflix bill and your mobile bills. Now throw in TV license and bins (annual + per bin). TV License is €14, bin tags are €9 a pop plus €8 per month for the annual charge. If you put out your bin once a month then that's €31 a month which is already 25% more expensive than you've estimated. Then throw in management fees, which are around another €15 a month. That's €46 plus your Sky/Netflix, plus your mobile bills for both of you. That surely totals well over another €100 per month, if not €150. Which is nearly 100% more than you were estimating. And another €150-200 for the insurance and water charges above which is again another 100% more than you estimated.
It's no wonder you don't understand how peoples bills are as high as they are. You underestimate some costs, forget others and don't pay for things that most people do. And look if that works for you then fair enough, but it doesn't, and can't, work for everyone. So basing your assumptions on purely your own experience is a massively flawed way of looking at things.
First I get criticised for leaving out car costs even though I was responding to someone who'd treated them separately. Then I get criticised for forgetting bin charges and the TV licence even though I accounted for them. I can't win.0 -
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To answer the question of what we'd do if we lost everything in a fire: we'd use a chunk of our savings to replace the essentials and push back our planned house purchase. That's all. We don't have enough stuff to ruin us if we had to replace it.0
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