Friday, Oct 05, 2007
Interesting use of the word "now"
BBC News: Renting now cheaper than buying
The survey refers to 2006
Posted by mybrainhurts @ 01:42 PM (608 views) Add Comment
7 Comments
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1. paul said...
So affordability has decreased since then as price have increased. So the actual headline should read "Renting now significantly cheaper than buying".
The BBC are trying ever so hard now - have a heart though - they're rapidly running out of pollyfilla for the cracks appearing.
2. Jonathan said...
It says that rents are rising in line with earnings. That is not my experience. Round my way, rents have not really risen at all in the past 10 years.
3. Travisher said...
After I left Uni I could not afford to buy, every time I came to move I could not afford to buy but every time I could afford to rent the sort of house I would have bought. So for the last 12 years it has been cheaper to rent than buy. Rent has always gone up around the headline inflation figure.
My current home sold for £140k, the rent is £600pcm so I reckon the landlord has to be banking on 4% above inflation on the capital value just to break even.
I'm hoping the crash comes fast and furious so that when the inevitable distress sale happens the price will have dropped to where I can comfortably buy it. 50% would be nice :-)
4. Flopsy said...
Rents have increased in my area (central London) but not as fast as house prices have increased. We are renting a 2 bedroom flat with lots of "extras" in an area where we could not afford a one bedroom flat.
The rent on a flat I rented in 1997 has nearly doubled in 10 years. However, the "value" of the flat if the owner put it on the market is over 3 times the 1997 value. That's not to say someone would buy it in todays climate though.
All of the flats I've lived in since 1999 had rents cheaper than the purchase price. In my current block of flats many sit empty as the owners have bought them as "an investment" and have little interest in letting them out.
5. planning4acrash said...
Jonathan, this is just clever use of stats. Disposable incomes have been growing by negative figures, tee hee! So, if rents fall, they will be growing in line with earnings : )
6. Redbullish said...
Took them long enough to realise it didn't it?, and still the lambs buy. I earn well above the national average and rent a £400,000 house in a very nice part of town for £700 pcm!
Rents have hardly moved in 10 years and the asking rents have no relation to passing or Market Rents, just the BTlL's trying to cover their mortgage. Rents are about right at the moment, property prices aren't.
7. C'mon Correction said...
Jonathan, I totally agree. Rents have been static or falling against inflation for the last ten years now.
Only a fool would have over-extended themselves to buy in the last few years compared to renting cheaply, even with slight house price inflation it still doesn't add up and certainly not guaged against risk, which is now more and more plain to see.
Now that house prices are falling across the country, it is a No-Brainer (to use that annoying american expression!)