A Preponderance

If you’ve been reading my blog from the beginning you may recall my continual struggle with the idea of whether to continue renting, or to look to buy a house. I’m still no further forward with that internal argument 2 years later,  but my girlfriend planted the seed again yesterday, opening up the whole can of worms all over again.

Essentially we are looking for somewhere to live together that is close to our respective places of employment (perhaps so we can get rid of one car, then?), that isn’t hugely expensive, that is nice, and is relatively quiet. A tall order in a big metropolitan city. We have been half-heartedly looking around for a couple of months now and we have seen a few places that would tick those boxes. Unfortunately every time we have enquired, the property has already been let.

A Spanner In the Works

Last night my girlfriend mentioned her parents have put away some money for her to use as a deposit (trust fund style) to buy, rather than rent. This has thrown the discussion and plans into disarray somewhat. Do we rent? Do we buy? Do we rent somewhere now together, and look to buy after that?

Looking back (1) at some posts (2) I’ve made before on the subject, I’m coming round to the idea that buying may not be such a bad idea any longer. The economy is faltering once more, and there are some desperate sellers out there. We both have excellent credit ratings, and my pre-approved mortgage offer still exists with my bank – although what value it is now at requires a personal appointment to discover.

Do Your Sums

Hundreds of thousands of people are no doubt in this exact same position. The path to clarity is to do your sums as a couple. What are your outgoings (read ‘Know What You Owe‘ for a good starting point in working this out), and what are your employment prospects like? This is a challenging economy; would a drastic change in one of your income streams cause you pain later on? Even with a mortgage, are you certain you’d still be spending less than you earned – even if interest rates increased? Remember in the 80′s recession interest rates shot up to 15-odd percent, causing pain up and down the country.

If you find you will still be comfortable, then what is to stop you? Ultimately house prices may be over-inflated, but there is nothing to say or evidence particularly that this will ever truly resolve itself to the levels I and others have previously predicted. Even during the recession and the years following it, house prices have remained essentially unchanged (but they haven’t increased much either).

A Watched Pot Never Boils

I’m not suggesting you throw caution to the wind. But with careful planning and the right property, you could escape entirely unscathed. I have previously advocated waiting for the massive market correction I and many others feel is long overdue – but 3 years later, it still shows no sign of coming despite conditions being ripe for it to do so.

Sometimes, despite all financial sense, you just have to go with what ‘feels’ right.

My girlfriend and I will look to buy at some point. For now (for speed more than anything), we will continue to look to rent initially. Are you in a similar position? Or have you recently had a similar discussion with yourself? I’d love to see you in the comments!

p.s. on an entirely unrelated note, for anyone who is resident in Sussex and likes photography, you might be interested in the photograph I took a few days ago of Hove’s West Pier during Stormy Tuesday!

• Dig Yourself Out of Debt: Spend Less Than You Earn
• Personal Recessions
• A Fundamental Question - Answered?
• 10 Economic Predictions for 2010
• A Guide to: Individual Savings Accounts (ISA)

As I wrote several months ago in my Financial Meltdown series, I took out a consolidation loan in January 2009 to pay off 2 higher-rated loans, and get in return one, cheaper, lower rate loan. The two old loans were with Barclays (my banking provider of choice), and so was the new loan.

I made an appointment with a Personal Banker in January, and proceeded to spend over an hour with her. I was open and honest, and she really spent time with me. I discussed my goals, where I was financially, and she talked through the options open to me. I left feeling very, very happy. I had finally taken steps to securing my financial future for the first time in my adult life and left with an even more positive view of my bank of choice.

The first of the two higher-rate loans was settled without complication. The other – due to the loan being created on the ‘old’ system but settled using the ‘new’ – refused to close in its entirety.  I was advised to “not worry about it” and it would resolve itself eventually.

The account remained attached to my online banking with a balance showing. I phoned every few months to check all was in order, and each time I was assured: all was in order. During each call, the balance remaining was described as simply the PPI refund that I had not had to pay during settlement. The ‘new system’ would get bored with it eventually and close it off.

On the 3rd July 2009 I received a ‘Loan Account Statement’ covering the 1st October 2008 to 2nd July 2009 listing a ‘Closing Balance’ at the end. No further correspondence was received and I took this to mean that the settled loan was in the final throes of being removed from my account. A little cheer was given, and the letter filed.

Fast forward to this month, and a Direct Debit for £7.83 bounced from my current account (as the instruction had been canceled by the branch when the old loan was settled). Curious as to what this amount was for, I phoned my branch. The lady I spoke to advised – after considerable digging – it was an attempt to take payment for the old loan still showing on my account. Due to limited information available to counter staff, she could not offer any further information.

Perplexed, I phoned the Barclays Loan line and spoke to a lending specialist, who could not answer why the payment attempt was made. Nor could she answer why it had taken over 10 months to attempt it. All she could tell me was I now owed Barclays £8.29 – courtesy of daily interest. I paid this with her by Fund Transfer, but she could not guarantee me that it would not be registered with the Credit Reference Agencies as a Late Payment.

In a letter to Barclays Customer Relations I penned:

“I find this incomprehensible and indefensible. Not only have I wasted most of this evening reviewing correspondence, bank and loan statements, and telephone records, but now fear negative reporting to my credit rating. Ostensibly, the payment is some 10 months late, but not due to any action or inaction on my part. When you settle a loan and receive repeated reassurances that everything is in order, is it unreasonable to believe that this is the case?

Currently, the loan account is registered as Satisfactory with no late payment markers. I want to ensure that this loan account is now marked as Settled without detriment to my credit history – for what is either a Personal Banker error; a computer error; or a combination of the two. I would also like to discuss the matter of compensating my time for having to be writing this letter in the first place.“

I love Barclays. But a relationship where they have treated me very well over the last 14 years is in danger of falling apart from a silly error on their part. The outcome of this complaint will very much determine where the remainder of my adult banking is conducted.

Tread carefully, Barclays. Very carefully indeed.

Have you ever been in conflict with your bank?

• Dig Yourself Out of Debt: Know What You Owe
• Dig Yourself Out of Debt: Cleaning Up
• 7 Reasons My Friend is Poor
• My Financial Meltdown: Part 3
• 10 Economic Predictions for 2010

Every month I calculate my net worth and then publish it. While the exact figures of my wages are not disclosed, what it does to my net worth, is. This month I am so close … !

Where I work we receive our overtime 1-2 months after we actually work the hours, due to how the payroll operates and how claim cut-off dates affect claim periods. Therefore this month I am seeing the fruits of my labour from the last part of August and the beginning of September.

The graph speaks for itself.

The last little bit is just there to tease me I am sure. Flicking back through my budget for the previous 10 months there are so many places I could have shaved off that amount if I had really, really put my mind into it just a few more percentage points. If I hadn’t gone on holiday to Cyprus in April, for example. Sure the holiday itself was free – no flights or hotels to pay for – but I took over £1,000 in spending money and guiltily spent the lot.

But, there is little point in crying over spilt milk. What is done, is done.

According to one (of my many) mighty spreadsheets, this means next month is freedom month – assuming my car does not blow up in the meantime of course.

You may remember that last month I was going to attempt to make an additional £1,252.16 to bring forward the pay-off date a month nearer still. I nearly made it, but fell short by £653.58 as can be seen above.

Darnit.

• Dig Yourself Out of Debt: Spend Less Than You Earn
• 6 Mistakes That Doubled The Price of My Car
• Is Debt Worth It? Does It Matter?
• Job Front Update
• Two Steps Forward, Three Steps Back