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flatnose

Buying Versus Renting Calculator.

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looks like i'm much better of buying then. i guess that pretty obvious though :(

allthough what do you set the house price growth at? i mean they are going up at the moment, and we really dont know what they will do next year, or for the next 10 years. i just wish i'd have bought when i was a young man.

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Rent v Buy Calculator

Have fun: I did. :)

For me it is even more compelling to rent, at least for now.

I'm reasonably happy to rent a place I don't particularly like in an area I'm not that keen on - but I'm extremely determined not to buy somewhere like that. So the calculation isn't one of renting or buying a similar place - it's renting a much less desirable place or buying a really nice house.

'No brainer' at the moment.

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I think it misses out maintenance costs of ownership - about 25% of typical rent, or 1%ish of buying price

also building insurance costs

any thoughts?

Edited by Si1

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looks like i'm much better of buying then. i guess that pretty obvious though :(

allthough what do you set the house price growth at? i mean they are going up at the moment, and we really dont know what they will do next year, or for the next 10 years. i just wish i'd have bought when i was a young man.

Same here according to the tool.

I have what would be a 36% on a £750k house, and only in the most perverse scenarios is it worse to buy according to the chart.

Has to be something like 1% house price growth over 25 years, with high interest rates and low rent increases.

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I think it misses out maintenance costs of ownership - about 25% of typical rent, or 1%ish of buying price

also building insurance costs

any thoughts?

Maintenance costs can vary enormously depending on the age of the property. A well constructed property built about fifty years ago can have very much lower maintenance costs than one built about 120 years ago. New property generally has a 10 year guarantee - but the higher price and lower re-sale value has always discouraged me.

In my experience property built between 1945 and 1965 is a good bet - thereafter room-size, land area, and construction techniques deteriorated sharply.

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In my experience property built between 1945 and 1965 is a good bet - thereafter room-size, land area, and construction techniques deteriorated sharply.

thanks for this

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I think it misses out maintenance costs of ownership - about 25% of typical rent, or 1%ish of buying price

also building insurance costs

any thoughts?

Indeed, it also doesn't take into account the potential returns on investments made using the difference between the theoretical mortgage payment and the rent. It only calculates leaving the deposit in the bank

I am paying £630/month rent on a property with a current market valuation in the region of £220,000. Therefore based on 10% deposit and 5% mortgage rate for 25 years = 1170.71 repayment

Difference = £540.71 per month or £6488.52 per annum net (equivalent to around 10K on my salary)

Even when removing the sum paid towards the rent by the person I am sub-letting a room to, assuming I would continue to do so, (£540.71 - £270) the figure is still £270.71 or £3248.52 per annum net (equivalent to around 5K on my salary)

IMHO this is a rather thinly disguised ramping tool from the Times. <_<

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Are you sure?

100% certain. I keep a close eye on NN1+10 miles on rightmove. Huge drops or no tenant.

I spend a lot of time in london, everyone who rents has negoiated their rents down this year.

As BTL's pay off more and more of their capital who should benefit, the renters as these BTL'rs will be the ones who can manage to rent out their properties at lower rents.

Rents are obscene and i for one am glad to see them drop.

It's a total misnomer that they will just keep going up and fund everyone in their retirement.

Edited by TheCountOfNowhere

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Indeed, it also doesn't take into account the potential returns on investments made using the difference between the theoretical mortgage payment and the rent. It only calculates leaving the deposit in the bank

I am paying £630/month rent on a property with a current market valuation in the region of £220,000. Therefore based on 10% deposit and 5% mortgage rate for 25 years = 1170.71 repayment

Difference = £540.71 per month or £6488.52 per annum net (equivalent to around 10K on my salary)

Even when removing the sum paid towards the rent by the person I am sub-letting a room to, assuming I would continue to do so, (£540.71 - £270) the figure is still £270.71 or £3248.52 per annum net (equivalent to around 5K on my salary)

IMHO this is a rather thinly disguised ramping tool from the Times. <_<

Aye - I put together a spreadsheet a year or 2 back on here - very different results when you look into it more closely.

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Rents are obscene and i for one am glad to see them drop.

It's a total misnomer that they will just keep going up and fund everyone in their retirement.

How true! :D

It's the year 2020, a one bed flat costs 800,000 to buy. Nobody can afford to buy it, so how can anybody pay rent to cover the BTL'ers mortgage. This was all doomed to failure. :lol:

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try bumping up the mortgage rate from exactly 4% to exactly 6%, see what happens... shows you how important it is.

agreed that maintenance on an owned place is equal to at about a year's rent equivalent p.a. [maybe a little less for a newer place but almost invariably more for an older one].

the results of this calculator for anyobody are almost certainly wrong but the list of variables ought to get at least a fewpeople thinking.

Edited by the flying pig

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This was actually introduced to this forum my a certain Hamish ages ago. ;)

He used it to 'prove' an argument he was having. It turned out he had misread it and the calculator actually disproved his point. From that point onwards he never mentioned this calculator again. I think it is very handy notwithstanding the few omissions.

The fact that Rent can never fall is one obvious error.

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How true! :D

It's the year 2020, a studio flat costs 800,000 to buy. Nobody can afford to buy it, so how can anybody pay rent to cover the BTL'ers mortgage. This was all doomed to failure. :lol:

fixed it for you ;)

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100% certain. I keep a close eye on NN1+10 miles on rightmove. Huge drops or no tenant.

I spend a lot of time in london, everyone who rents has negoiated their rents down this year.

As BTL's pay off more and more of their capital who should benefit, the renters as these BTL'rs will be the ones who can manage to rent out their properties at lower rents.

Rents are obscene and i for one am glad to see them drop.

It's a total misnomer that they will just keep going up and fund everyone in their retirement.

"•After two months of rises, rents are up a further £4 to £829 pcm (+0.5 per cent), the highest for six months, providing further evidence of the recovery in the rental market."

http://www.findaproperty.com/displaystory....p;storyid=23257

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try bumping up the mortgage rate from exactly 4% to exactly 6%, see what happens... shows you how important it is.

agreed that maintenance on an owned place is equal to at about a year's rent equivalent p.a. [maybe a little less for a newer place but almost invariably more for an older one].

the results of this calculator for anyobody are almost certainly wrong but the list of variables ought to get at least a fewpeople thinking.

Indeed, the whole outlook changes the second you bump the mortgage and savings rates back to 2007 levels. Quite enlightening really, although not in the way The Times probably intended.

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Yes - what about service charges too and repairs etc

I'd allow £1000 - £1500 per annum minimum - some years there's nothing to pay, others you'll need new central heating, roof repairs, a driveway, new bathroom suite, garden shed replaced etc. Bigger/architecturally grand houses will need substantially more

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I think it misses out maintenance costs of ownership - about 25% of typical rent, or 1%ish of buying price

also building insurance costs

Also tax wheezes.

By not buying, I had sufficient cashflow to claim a £24k tax rebate last year, and I hope to increase that this year. So if I were to buy, I'd need a £24k/year price rise to offset that. Which might have happened in 2004, but seems less likely now.

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"•After two months of rises, rents are up a further £4 to £829 pcm (+0.5 per cent), the highest for six months, providing further evidence of the recovery in the rental market."

http://www.findaproperty.com/displaystory....p;storyid=23257

[/quote,

Property search company says rents going up, no surprise there. How do they come up with their figure ? Average of initial asking rental price like the rigthtmove pretend house price index ?

Meanwhile, back in the real world, unemployment rises. food inflation rises. pay decreases. Q.E, fools idiots into buying into a recovery and voting labour.

Ever single renter i know, abotu a dozen, have had their rents dropped in the last year by terrified land lords.

When intrest rates go back up the land lords are fooked.

Edited by TheCountOfNowhere

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