Very good observations here that are not specific to the UK either.
My wife and I are now at the point where we need to decide wheter to move out of the city or stay in its vicinity and pay the price for it. We are currently renting a newish (2015 built) terraced house with a very small garden, at the outskirts of Hannover. The infrastructure around is great, with a Kindergarten across the street, secondary school just down the road, tram station as well, several Autobahnen nearby (but not too close to be annoying) and less than 30 minutes from EDDV International Airport and less than 20 min from EDVM, my current homebase.
We would like to live in a more spacious house with more room and more garden though, and to own instead of rent. But the housing market has run hot here, with prices being unaffordable even for a couple of physicians – unless you buy really run down houses that need a lot of work.
It remains to be seen where we end up. Paying 1500€/month rent for 143m² is not a good long term investment either, though…
MedEwok wrote:
But the housing market has run hot here, with prices being unaffordable even for a couple of physicians – unless you buy really run down houses that need a lot of work.
You move to a village in the middle of nowhere (except there is a good little airfield 20 mins drive away) and become a couple of country doctors :-)
Malibuflyer wrote:
The vast majority of people technically living in a city (and almost all beyond a certain age) practically are also villagers anyways:
They are regulars in 1-2 pubs/restaurants, socialize with the same 20 people do their shopping in the same 5 shops, etc. If they leave their immediate neighborhood they plan it the same way as if a “real” villager does a trip into the city.Yes, esp. if you move into a new place, the difference between city and rural living is significant: While in the city you have typically broad options for actually choosing you microcosmos, in a village you have to take what is there. But once you have settled in, actual social life is more similar than esp. urban people want to admit.
That is an excellent observation, I had not thought of it like that.
MedEwok wrote:
It remains to be seen where we end up. Paying 1500€/month rent for 143m² is not a good long term investment either, though…
I was in the same situation and now I could not afford to rent anymore in the village we live, which is close to Zurich, 5 minutes from my work place but still countryside. We have a smallish 1960ties terraced house which at the time was cheap to get and renovate, never looked back even though it would be nice to have more space. But at least I never have to consider how to pay for the mortage. We are also very lucky to have school and kindergarten very close by, literally across the road.
Looking at Hannover and from what you quoted (30 mins to EDDV/20 to Hildesheim) maybe have a look in the countryside somewhere southeast or southwest of Hannover, whatever suits you better.
When it comes to property, looking at what other people don’t want has always been interesting to me, for just about everything. Having renovated our house extensively, it would not scare me now to, for a given budget, spend half on an old but nicely situated place and spend the other half making it my own. Looking at some of the houses built recently, I think 1960ties building technique and quality are still quite superior, if you are willing to glue some insulation and replace the innards at some stage.
MedEwok wrote:
Paying 1500€/month rent for 143m² is not a good long term investment either, though…
At current mortgage rates in Germany that is more than the interest one hat to pay on a 2 Mio. EUR loan ….
Graham wrote:
You move to a village in the middle of nowhere (except there is a good little airfield 20 mins drive away) and become a couple of country doctors :-)
It’s not like we aren’t thinking about this. But the village should be large enough to have at least a Kindergarten, an elementary school and a supermarket. With little kids you end up becoming a full-time taxi driver if there isn’t any infrastructure for them.
Surprisingly, the “good little airfield 20 mins drive away” is almost the easiest part of this, although I’m sceptical about fields which are PPR on weekdays. Right now my base is open from 8 am to SS or 8pm every day, which is great. Many smaller airfields here are only open on weekends.
Malibuflyer wrote:
At current mortgage rates in Germany that is more than the interest one hat to pay on a 2 Mio. EUR loan
Yea… but isn’t the snag that banks will calculate with a much higher mortage interest to calculate feasibility? Right now with 1 % interest here, I could sell my house and move up to a much higher place, but will be refused mortage as they would want to assure I can pay a 6% interest plus returns… which is not unwise and will probably avoid a housing collapse one day, but which makes the low interest rate a rather insignificant figure for purchasers.
At current mortgage rates in Germany that is more than the interest one hat to pay on a 2 Mio. EUR loan
Include stamp tax, notary fees, principal repayment, capital gain tax on sale, maintenance expenses and it’s not so clear-cut anymore.
Malibuflyer wrote:
At current mortgage rates in Germany that is more than the interest one hat to pay on a 2 Mio. EUR loan ….
I dunno, I must be looking at the wrong loans then because we estimate we cannot take out more than 500k from the bank. Especially if we follow the classic advice of having 20 – 30% of the total house price already available as “own capital”.
Mooney_Driver wrote:
Looking at Hannover and from what you quoted (30 mins to EDDV/20 to Hildesheim) maybe have a look in the countryside somewhere southeast or southwest of Hannover, whatever suits you better.
Yes, we’re nowadays looking in basically a 20 to 30 km radius all around Hannover. Certain directions are more favourable regarding infrastructure and commuting time to nearby hospitals were I could work. Surprisingly, even 20 km out of the city, the asked prices are only barely lower, at least on typical real estate sites like immoscout. I do wonder wheter these reflect reality, though.
MedEwok wrote:
I must be looking at the wrong loans then because we estimate we cannot take out more than 500k from the bank.
When interest rates get low enough, at some point they stop driving the payment and repayment of principal over the term of the loan is dominant. 500K with a 1500 monthly payment is well under 1% interest for a 30 year loan. Raise the interest to 2% and the payment is not much affected.
I have only one mortgage now, but plan to keep it indefinitely for the US tax deduction. As mentioned above I’m refinancing again now, to reduce the (fixed forever) rate… but it’s barely worth it, and will reduce the payment by only $80 monthly. However this will last ‘forever’ so it’s worthwhile, barely, given low fees to refinance.
