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Arth

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About Arth

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  1. Your hard facts ignore the effect of gearing - you can borrow money to buy property, but not to buy shares, and, again, the fact that rents inexorably rise with inflation, resulting in a monthly deficit rather than a monthly surplus which will eventually deplete any capital you have accumulated in earlier years. If you have a lump sum and are making a choice between buying a house and sitting on it for twenty years or putting the cash into shares, then, yes, it may be that at the end of the period the investment in shares would have proved more lucrative (although your link didn't seem to take into account the disparity between rental yield and dividend yield, typically 6% or 7% vs. 2% or 3%). If like most people, you are buying a house with a mortgage and intending to live in that house, I'll repeat my previous assertion that buying will have beaten renting in any 20 year period you'd like to pick in the last 60 or 70 years. Sure there are times when you'd have done better, times when you'd have done substantially worse, but this is equally applicable to stock market investments. I gave you a real world example to prove my case. It wasn't one I cherry picked, it was one that you stipulated. I'm happy to do the same for any other period you suggest. Perhaps you'd like to find a similar period that proves me wrong?
  2. Why didn't you respond in this, cartoonishly, angry way to posts that purported to show that renting was a better long-term option than buying?
  3. I don't have time to do the, detailed calculations, but taking the period 1990-2010 for a two bedroomed house in a decent area of Leeds, using actual figures , the purchase price in 1990 would have been in the region of £40,000. The monthly rental £260. At the high interest rates of the time, and allowing for running repairs, insurance etc. the cost of ownership would have been say £400 a month. Giving a saving of £140 per month by renting. In 2010 renting that property would cost in the region of £650 a month. The mortgage debt (assuming interest only) is still £40,000. If we leave the monthly cost of ownership at £400, allowing for the fact that mortgage rates have fallen, but maintenance, insurance etc. have risen (with a 6% mortgage, this leaves a very generous £2400 a year above the cost of the mortgage for these). Renting would therefore show a loss of £250 a month. Assuming that the rise in rent is the same from year to year, you'd have been paying more in rent that the cost of owning from year 9 onwards. As a result any pot of cash you'd have built up in the early years would have been long eaten up by the end of the period, leaving you with less money that when you'd started, leaving aside "Fantasy Investment Island" buying shares in Company X in 1990, 5000% growth by 1992, then switching into pork-belly futures which showed 150% growth over a three month period and then... speculative investments that could just as easily have ended up at zero. So as of today, if you'd bought you'd still be paying £400 a month, the house would be worth around £140,000 (a similar repossession recently sold at £138.950), leaving you with equity of £100,000. If you'd rented, you'd be paying £650 a month and have no money left after paying the excess of rent over mortgage for the last 10 years.
  4. The mistake that people make when comparing the long-term cost of renting vs. buying is ignoring the fact that the mortgage debt remains the same or decreases while rent rises inexorably with inflation - the long-term trend is 6%-7% p.a. At this rate the £12000 p.a. saving quoted in earlier posts is constantly decreasing and turns into a loss after about 10-14 years. I am not saying that buying rather than renting is a good move at the moment - I believe that property prices have along way to fall yet and there are numerous renting bargain"anomalies" available. However, I would say that anyone who thinks that renting rather than buying over a long time frame, e.g. 20 years, is going to be more profitable than buying is seriously deluding themselves. If anyone can identify any 20 year period in the last 70 years when it would have been more profitable to rent than buy, I'll be extremely surprised.
  5. I've not been around LS6/LS4 recently, but the last time I was there were adverts for rooms/houses to let everywhere I looked, so I think that maybe your assertion regarding voids is a bit optimistic. You also need to take into account the new Opal development behind the Merrion Centre which has 24 floors of student flats and the massive development on Woodhouse Lane. For a long time, with increasing student numbers and little or no increase in available accommodation BTL in a student area was a safe-ish investment, however, with the massive growth in available accommodation and every economic and demographic indication of at the least a plateau in demand, this may not continue. It might make sense if you're thinking of using part of the house yourself, but you should bear in mind that most houses are rented by groups of friends, so that you could find difficulty in renting part of the property while staying there yourself or find yourself a bit of an outcast in your own home.
  6. The site IS being censored: try putting "g.l.o.b.a.lhousepricecrash.com" without all the dots at the start into a post and see what happens to it.
  7. You are verging on tin-foil headgear. Like it or not, the credibility of this site is determined by all the posts on its forums (no doubt some pedantic buffoon will insist that it's "fora"...). There are many sensible, informative posts regarding house prices and the general economy, however stuff like paranoid "the government is watching us all and trying to control our minds...", xenophobic "it's all the fault of Polish immigrants..." and right of Daily Mail reader "lesbian muslim single mother gets ten thousand a month and a chauffeur driven Jag to take her to the mosque..." threads undermine these. I've actually been registered on this site for longer than most of the users who've replied to my comments. I don't think that I'd bother joining now, nor would I recommend the site to anyone, as I have in the past: I'd suggest they put globlal on the front of the site name.
  8. Oh my God. What's the next BBC expose? Electoral Roll details are freely avaiable? You can get details of Births, Marriages and Deaths? You can get Probate details? George Best liked a drink? Details of the registered keeper of a vehicle have been freely available to anyone showing reasonable cause to know them since at the latest 1974/5 when they were computerised at DVLA. "Possible witness to road traffic accident" is accepted as reasonable cause. As for criminals using the service to target vehicles, let's think, shall I get the details sent to an address where I can pick them up, details produced by a system that retains an audit trail of all enquiries, or shall I drive round expensive neighbourhoods or streets/car parks near expensive clubs/restaurants? It's posts like this, which have more than an air of paranoia and absolutely NOTHING to do with house prices which contribute to this site's tin-foil hatters image.
  9. A significant part of the reason behind the difference between quoted 10-15% falls recorded during the last crash and the reality of property prices falling by c 30% was one of timing: property prices peaked at at different time and reached their lowest point at a different time. In 1989, when prices had stabilised or were starting to fall in London and the South East, prices were rising sharply further North. By the time prices had peaked in the North and had started to fall, South East prices had stabilised. e,g, I moved from London to Leeds in 1987. At the peak the house I sold in London for 84,000 reached 135,000 iin 1990 and fell back to 95,000 in 1993 and stayed at around this mark, shifting up slighlty over time until 1997. The house I bought in Leeds for 48,000 reached 135,000 in 1992 and fell back to 100,000 by 1995. When you take into account that the rising market had higher volumes that the stable or falling market, this "out of sync" movement would have had a significant effect on the overall figure: an effect that Vested Interests did little to point out. Converstations with several coleagues who moved from the Midlands at the same time as I did support this: prices there rose and fell slightly later than in London, but earlier than in Yorkshire. This time I believe that the crash will be more synchronous, due at least in part to the Internet and availability of information, however,there will inevitably be leads and lags: Northern Ireland seems to be the lead this time, and Scotland seems to be lagging. Edited because my proof-reading is even worse than my typing
  10. MBNA are deep in the mire. The vast majority of their lending is funded by securitisation. There is every likelihood that the market for securitised credit card debt will implode even more quickly than the one for MBSs once arrears start rising. And rise they will: rapidly. Apart from the declining economy, over the last few years, a lot of credit card debts that would otherwise have gone unpaid have been settled by people MEWing. It doesn't take a rocket scientist to work out what's going to happen now that MEWing isn't an option... EDIT: typos
  11. Draw accepted, but as you started it I think maybe away goals should count double.
  12. "With spelling like that I can understand" reads a lot better with a comma after "that".
  13. My typing may not be the best, buta t least I understand the use of the comma.
  14. Taking delight at the misfortune of others is never less than ugly. Unfortunately, it IS becoming all too common on this site While there have in the past been reasoned, intelligent, arguments presented and while there continue to be posts linking to housing-related articles I might otherwise have missed, the site does of late seem to have descended to a "look at this muppet who bought a house" / "it's all thr fault of immigrants" level. In the past I've deliberately directed people towards the site. Now, to be honest, I'm too embarrased to.
  15. Reading the original post, I was wondering what sort of hovel this was. The current bid of 105K takes it back to 2002 prices. Houses in this road have sold for 185K+. I agree that it's not worth anywhere near the 200k quoted in the ad., but 105K is not an unreasonable real bid.
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