goldbug9999 Posted June 1, 2011 Share Posted June 1, 2011 even taking into account mortgage rates now ~2-3% its cheaper to buy my house at the current inflated price than it is to rent it... .. so long as interest rate remain at their all time historic low ... Quote Link to comment Share on other sites More sharing options...
R K Posted June 1, 2011 Share Posted June 1, 2011 You are forced to sell the house that you've made no money from to pay for your care in old age. A complete waste of time buying a house it seems, unless you pay cash, which most so called property owners can't do. It's laughable how people delude themselves into thinking that they own their own home and then in the same sentence say that they have a mortgage, lol. Tragic!! Buying with cash has an opportunity cost. Depends what else one might do with that capital. One of the 'problems' with the housing market (perhaps 'features' is a better term) is the leverage. Both on the way down and on the way up. It's very difficult to find other retail asset classes which employ the same level of leverage and borrowing rates and which can change so dramatically on the way up and down. Who would think it sensible to leverage up 20x with a £200k loan from the Halifax at 3% and 6x earnings to buy, say, silver? (JP Morgan aside). See how long it takes you to go bust with that. But our banks, BoE, FSA and Govt. thought lending even more extreme than that on land was perfectly sensible. As we know from this bubble, the leverage was dramatically increased on the way up to turbo boost the market and went into reverse on the way down. Such pro-cyclical measures are stark raving bonkers. When it's the largest market in the country (land) and these are govt. regulator and central bank policy it's nothing less than criminal. Quote Link to comment Share on other sites More sharing options...
Fancypants Posted June 1, 2011 Share Posted June 1, 2011 Who was t'other guy? I'm in France. Owen Hatherley - who is primarily an architectural critic, Writes for the Guardian, big fan of modernism and trad-Socialism. Probably his first big appearance on TV, so maybe folk should go easy, although I was hoping he'd be as militant on screen as he is in print, then we would have seen Krusty eviscerated. Mind you, I don't think HPC is his agenda per se. It was a bit of a false contrast to put the two up against one another I guess. Quote Link to comment Share on other sites More sharing options...
slogger Posted June 1, 2011 Share Posted June 1, 2011 Lets see the figures for a 60% HPC and IR's at 10%. what would the rental be if IR was 10%... if say rent was about equal to IR - which I dont think it would be as most people would be renting then as unable to buy- then whats the cost of purchase over 20 years c.f. rent over 60 .. so after 20 years paid off house - now worth 200k instead of 500k, interest paid is ~300k so pay in total 800k - rental over 20 years is ~1,000,000 (but probably more with inflation) ... then pay another 1,000,000 every 20 years for next 40 years c.f. ~0 for mortgage.. also with house have 200k asset even after 60% crash c.f. 0 with rental again ready to stand corrected... would like someone with better knowledge to do a more detailed calculation c.f. the one above as thats what we're all after. of course could have interest rates at 20% rental at 2% and HPC of 100% which makes figures very different - however above I think could happen..? Quote Link to comment Share on other sites More sharing options...
Guest_FaFa!_* Posted June 1, 2011 Share Posted June 1, 2011 Do I know you? In a manner of speaking you do....I don't know if you notice my posts much but you probably know my real opinions better than my colleagues and several members of my family. And any friends who have bought a house recently (Only one couple, I didn't have the guts to tell them not to, other vague warnings about the economy, don't want to be right if it goes wrong for them, but I think they'll be fine) the exceptions to that rule are non-marxist academics, in my experience! I'm not an academic - does an MA in social sciences count? Quote Link to comment Share on other sites More sharing options...
slogger Posted June 1, 2011 Share Posted June 1, 2011 Okay - buy house for £200k in 2007 It'll be worth say £140k now and is destined to fall further. Or you could have rented. Yes, renting is a loss, but it's not this much of a loss. There are issues to do with what you do with your cash, how to save it, what the government is trying to do to finagle that £140k to something more politically palatable and so on but property is such an obviously bad bet at this point in the cycle no one dispassionate could fail to notice it. I'm not even going to go on about tying yourself to a highly immobile and easily heavily taxed pile of bricks for decades either. Housing is always and forever a liability, a cost. agree 100% - over last couple of years and maybe over next year or so it will have been better to have rented than purchased if you sell after only a few years, my question is (answer of which I am unsure!) will it be better to buy over next 20 years compared to renting over next 60. Quote Link to comment Share on other sites More sharing options...
exiges Posted June 1, 2011 Author Share Posted June 1, 2011 (edited) .. so long as interest rate remain at their all time historic low ... Conversely, we could have continued low rates and epic inflation (followed down the road by wage inflation). Out of the two, it looks like the latter is the one being played out. I'm not even going to go on about tying yourself to a highly immobile and easily heavily taxed pile of bricks for decades either. Housing is always and forever a liability, a cost. Whereas renting is a dream, with the sword of damocles hanging over your head when the landlord wants you out, not being able to decorate the house like you want (women like doing this), constantly paying reference fees, rent going up with inflation etc. Edited June 1, 2011 by exiges Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 1, 2011 Share Posted June 1, 2011 In a manner of speaking you do....I don't know if you notice my posts much but you probably know my real opinions better than my colleagues and several members of my family. And any friends who have bought a house recently (Only one couple, I didn't have the guts to tell them not to, other vague warnings about the economy, don't want to be right if it goes wrong for them, but I think they'll be fine) I'm not an academic - does an MA in social sciences count? motherf*cker! Quote Link to comment Share on other sites More sharing options...
Injin Posted June 1, 2011 Share Posted June 1, 2011 agree 100% - over last couple of years and maybe over next year or so it will have been better to have rented than purchased if you sell after only a few years, my question is (answer of which I am unsure!) will it be better to buy over next 20 years compared to renting over next 60. You can't know - and that's one reason you'd be mad to get a mortgage. A 20-30 year loan when you have no idea what neither the liability you are buying will be worth in trade nor the economy generally will be doing in 6 months time is insanity. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 1, 2011 Share Posted June 1, 2011 agree 100% - over last couple of years and maybe over next year or so it will have been better to have rented than purchased if you sell after only a few years, my question is (answer of which I am unsure!) will it be better to buy over next 20 years compared to renting over next 60. you are innumerate bordering on hilarious Quote Link to comment Share on other sites More sharing options...
Wait & See Posted June 1, 2011 Share Posted June 1, 2011 You can't know - and that's one reason you'd be mad to get a mortgage. A 20-30 year loan when you have no idea what neither the liability you are buying will be worth in trade nor the economy generally will be doing in 6 months time is insanity. 100% agree. Quote Link to comment Share on other sites More sharing options...
tennaval Posted June 1, 2011 Share Posted June 1, 2011 (edited) Even by her very high standards I was shocked by her crassness and condescension, a titled aristocrat, privileged beyond belief, baled out by her wealthy parents, blaming the current generation of kids - faced with property prices she helped to stoke- as being too feckless and lazy to save for a deposit.......unbelievable! From the Sunday Times 2008......... Have you ever been really hard up? " When I bought my first flat I was 21. It would be silly to say I was really hard up, though, because if my boiler had blown up or something had happened to me I always had the support of my parents. I bought in 1992, in Battersea, south-west London, and I paid £72,500. For the first three years I was in negative equity, and I was on a tight budget. I sold it for just under £100,000 five years later. I had a mortgage with a rate of 14%, which then went up to 15%. I had a bit of help from my parents and on pay day it was pizza and lipstick, and that was it." Edited June 1, 2011 by tennaval Quote Link to comment Share on other sites More sharing options...
Wait & See Posted June 1, 2011 Share Posted June 1, 2011 Lets remember also that a mortgage is a debt against you. You can however walk away from rent after your contract expires. This is more freedom IMO, than being tied to a large loan and a single property/area for the rest of your working life. It's all about life choices I guess. Quote Link to comment Share on other sites More sharing options...
juvenal Posted June 1, 2011 Share Posted June 1, 2011 Even by her very high standards I was shocked by her crassness and condescension, a titled aristocrat, privileged beyond belief, baled out by her wealthy parents, blaming the current generation of kids - faced with property prices she helped to stoke- as being too feckless and lazy to save for a deposit.......unbelievable! From the Sunday Times 2008......... Have you ever been really hard up? " When I bought my first flat I was 21. It would be silly to say I was really hard up, though, because if my boiler had blown up or something had happened to me I always had the support of my parents. I bought in 1992, in Battersea, south-west London, and I paid £72,500. For the first three years I was in negative equity, and I was on a tight budget. I sold it for just under £100,000 five years later. I had a mortgage with a rate of 14%, which then went up to 15%. I had a bit of help from my parents and on pay day it was pizza and lipstick, and that was it." I would add to the above an interview for The Telegraph on 14.6.2004, where Ms Alsopp reveals that her family funded a deposit of £30,000 for the Battersea flat. I make that a 40% deposit. Quote Link to comment Share on other sites More sharing options...
mark1 Posted June 1, 2011 Share Posted June 1, 2011 Lets remember also that a mortgage is a debt against you. You can however walk away from rent after your contract expires. This is more freedom IMO, than being tied to a large loan and a single property/area for the rest of your working life. It's all about life choices I guess. Where do you walk away from when your rental contract finishes? The choices are another contract or a mortgage. Owning an affordable mortgage on a reasonable priced property is better then renting. Quote Link to comment Share on other sites More sharing options...
Si1 Posted June 1, 2011 Share Posted June 1, 2011 Where do you walk away from when your rental contract finishes? The choices are another contract or a mortgage. Owning an affordable mortgage on a reasonable priced property is better then renting. this is so stupid it is hardly worth responding to durrr... Quote Link to comment Share on other sites More sharing options...
The Knimbies who say No Posted June 1, 2011 Share Posted June 1, 2011 (edited) http://www.bbc.co.uk/iplayer/episode/b011qjt9/Newsnight_31_05_2011/ 35 mins or thereabouts. Edited June 1, 2011 by cheeznbreed Quote Link to comment Share on other sites More sharing options...
bendy Posted June 1, 2011 Share Posted June 1, 2011 In summary. BBC run a feature about a generation being priced out And Completely fail to grasp the seriousness of it all. thatnks for that, i can give up on the whole thread ignoring the next 3 pages Quote Link to comment Share on other sites More sharing options...
mark1 Posted June 1, 2011 Share Posted June 1, 2011 this is so stupid it is hardly worth responding to durrr... Why did you then, is it to boost your 12000 odd posts up? try getting out more! The point like your living in some kind of utopia where you can float around if you havent got a mortgage is a bit of a dream. Quote Link to comment Share on other sites More sharing options...
athom Posted June 1, 2011 Share Posted June 1, 2011 very lackluster overall. I did like the look on her face at the beginning when paxman said "property porn". I don't think she was expecting that Quote Link to comment Share on other sites More sharing options...
'Bart' Posted June 1, 2011 Share Posted June 1, 2011 Kirsty was gifted her (large) deposit I thought she was just big boned. Quote Link to comment Share on other sites More sharing options...
Wait & See Posted June 1, 2011 Share Posted June 1, 2011 (edited) Why did you then, is it to boost your 12000 odd posts up? try getting out more! The point like your living in some kind of utopia where you can float around if you havent got a mortgage is a bit of a dream. Plenty of very good rentals about these days for well under a grand a month. Not talking about the newbuild flats though. They are rubbish. Rent isn't debt. Mortgage is debt and thats just the way the banks like it. Edited June 1, 2011 by Wait & See Quote Link to comment Share on other sites More sharing options...
slogger Posted June 1, 2011 Share Posted June 1, 2011 this is so stupid it is hardly worth responding to durrr... erm no it isnt - to buy a house costs less than renting, other than just stupid,inane comments educate us - show us the figures you think are likely over the lifetime of buying v renting .. I've backed up my statements with figures of 10% interest rates, 60% property price falls and rents being ~same as IR ... buying still stacks up over the lifetime. other than just making snide comments to people who have different opinions than yourself please try and explain...yes over short term buying then selling doesnt make sense - even if property prices stayed level then you'd lose on stamp duty/moving/selling costs etc etc .. what we're talking about here is whats the best way of paying for somewhere to live over our lifetimes (buy/rent/..other?) Quote Link to comment Share on other sites More sharing options...
Lepista Posted June 1, 2011 Share Posted June 1, 2011 ...does an MA in social sciences count?... I'm afraid it doesn't count for anything at all. Sorry. Quote Link to comment Share on other sites More sharing options...
mark1 Posted June 1, 2011 Share Posted June 1, 2011 Plenty of very good rentals about these days for well under a grand a month. Not talking about the newbuild flats though. They are rubbish. Rent isn't debt. Mortgage is debt and thats just the way the banks like it. Yes ive a 2 bed flat for just under a grand what a bargain. Quote Link to comment Share on other sites More sharing options...
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