[porca misèria]

Redhat Sly, on 18 November 2010 - 09:25 AM, said:

Why 5%?

£300k at 4% = £12k minus 20% tax = £9.6k = £800 a month - if his rent is less than £800 then 4% is enough on £300k

That figures. 5% becomes at most 4% net of tax, unless it's in a tax shelter.

It's at the lower end, where the hoards of involuntary renters are, that buying is so much cheaper than renting. Where a flat might be £89k to buy or £595/month to rent. The poor getting ****ed.

[SeeYouNextTuesday]

porca misèria, on 18 November 2010 - 09:35 AM, said:

That figures. 5% becomes at most 4% net of tax, unless it's in a tax shelter.

It's at the lower end, where the hoards of involuntary renters are, that buying is so much cheaper than renting. Where a flat might be £89k to buy or £595/month to rent. The poor getting ****ed.

Why is rent so much in that case? LHA...

IME, most flats are leasehold with monthly fees to consider as well.

[Dr Renter]

Bruce Banner, on 18 November 2010 - 12:02 AM, said:

If I were to draw £350K out of the bank and buy the house I'm renting, I'd lose £11,200 per annum in interest after tax (I'm retired and no longer pay 40%), I pay less than that in rent and my money is sitting in the bank rather than being tied up in a depreciating, illiquid, asset.

Of course, if you factor in maintenance, falling house prices etc, I'm substantially better off renting.

So you're renting a £350,000 house for £550pcm? Where is this?

[Bruce Banner]

Dorkins, on 18 November 2010 - 09:32 AM, said:

Yes, in your personal case you are able to overcome the tax efficiency of owning housing because your landlord has a very low rental yield and your income tax rate is low.

At the moment, rental prices in your area favour the approach you are taking.

In general (especially if houses return to 3x wages and rental yields go back to double digits), the tax system favours owning a house over renting one and investing elsewhere.

Edit: I seem to recall you saying your landlord is getting a 2% yield and you are earning 5%+ on NS&I certificates (which are no longer available of course). You must admit this is a very unusual situation and one which is not available to most of the population. The going rate is about 5% yields on rent and 3% on savings.

There are quite a lot of posters here who are in a similar position to me. If you shop around for good rental deals and interest rates, it can be done.

[Bruce Banner]

Dr Renter, on 18 November 2010 - 09:47 AM, said:

So you're renting a £350,000 house for £550pcm? Where is this?

Wrong, as usual .

[this_prisoner_is_opting_out]

I am currently paying 680 euros a month on a 1-bed rental flat.

I am going to buy at 100% and my fixed 10 year repayment will be approx 320 a month for a 3-bed house.

Utilities coming in at the same due to superior insulation on the house.

I'm prepared for further falls at these kind of prices.

[ccc]

Same story in the Scotsman today. However the detail is a little more illuminating.

Scotsman


"IT IS cheaper to buy a property than rent one in 80 per cent of towns in Britain because of falling house prices and rising rents, research suggests. Rents on a two-bedroom flat are now typically 9.9 per cent higher than interest-only mortgage payments, said Zoopla.co.uk."
Well - that rather changes things doesn't it. Did the other article not think this info was important....

[Dr Renter]

Bruce Banner, on 18 November 2010 - 09:28 AM, said:

Sums are not your strong point , are they .

£350,000 x 5% is £17,500 annual savings

Take off the £11,200 you say you'll lose and that's £6,300 or just over £500pcm.

[Bruce Banner]

Dr Renter, on 18 November 2010 - 10:13 AM, said:

£350,000 x 5% is £17,500 annual savings

Take off the £11,200 you say you'll lose and that's £6,300 or just over £500pcm.

You post as though stupidity were a virtue .

When in a hole, stop digging.

[the.ciscokid]

Bruce Banner, on 18 November 2010 - 09:28 AM, said:

Nothing is certain in life, but I'm very relaxed. I would certainly be 'shitting myself' if my money was tied up in an, illiquid, depreciating asset though.

Agree entirely (I am in a rented house also)... but if TSHTF, you would still have your house rather than a lot of pretty toilet paper. If I had your cash, I would be seriously think about buying a nice house with a plot of land (and some guns and stuff ).

[cardiffone]

Havent we been through all this before, in the long run it is still cheaper to buy than rent.

end of story.

If you have other needs like flexibility or you have some really good investments, in can be better to rent...

that doesn't apply to most people in most areas

[Dr Renter]

Bruce Banner, on 18 November 2010 - 10:15 AM, said:

You post as though stupidity were a virtue .

When in a hole, stop digging.

Ah yes, the classic HPC response, don't respond with facts, respond with insults. A good tactic I suppose, the less info you give out, the less likely you'll trip yourself up. I would imagine it's difficult for you to remember what is truth and what is BS. This used to be such a lively and informative forum, sadly it's loons like you who have ruined it.

[ccc]

Does nobody else think it is pretty shocking the original article didn't even mention this was based on interest only mortgages ?

Scandalous IMO. Unless the Scotsman article is wrong of course.

[Bruce Banner]

the.ciscokid, on 18 November 2010 - 10:21 AM, said:

Agree entirely (I am in a rented house also)... but if TSHTF, you would still have your house rather than a lot of pretty toilet paper. If I had your cash, I would be seriously think about buying a nice house with a plot of land (and some guns and stuff ).

Actually, even that's not a certainty. Governments can kick you out of your house if they want to, they call it compulsory purchase.

[Bruce Banner]

Dr Renter, on 18 November 2010 - 10:24 AM, said:

Ah yes, the classic HPC response, don't respond with facts, respond with insults. A good tactic I suppose, the less info you give out, the less likely you'll trip yourself up. I would imagine it's difficult for you to remember what is truth and what is BS. This used to be such a lively and informative forum, sadly it's loons like you who have ruined it.

But your questions are not based on what I have said. Can you not read?