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here we have a renting is dead money post.

The thing about renting and saving is that every £1 you save is worth £2 if house prices don't rise.

Is it wise to base a long term financial commitment on 300 year low interest rates? So looking at a longer term mortgage rate of 6% on a 25 year mortgage you pay 92p on every £1 in mortgage interest. So if you save £10k for when buying it knocks £19.2k off your total payments but by having a larger deposit you might also get a better mortgage rate.

If you borrow £160k you pay about £307k in total at 6%. If you save £10k and only borrow £150k you pay £288k so the saving is £19k.

Of course if house prices fell £10k and you saved £10k and then only had to borrow £140k your total payment is £269k so the saving is £38k.

It's why the banks want high house prices innit? They love their mortgage interest.

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The thing about renting and saving is that every £1 you save is worth £2 if house prices don't rise.

Is it wise to base a long term financial commitment on 300 year low interest rates? So looking at a longer term mortgage rate of 6% on a 25 year mortgage you pay 92p on every £1 in mortgage interest. So if you save £10k for when buying it knocks £19.2k off your total payments but by having a larger deposit you might also get a better mortgage rate.

If you borrow £160k you pay about £307k in total at 6%. If you save £10k and only borrow £150k you pay £288k so the saving is £19k.

Of course if house prices fell £10k and you saved £10k and then only had to borrow £140k your total payment is £269k so the saving is £38k.

It's why the banks want high house prices innit? They love their mortgage interest.

Every pound you save is worth £3

Borrow £1, pay back £2, have to earn £3 to pay it back.

How's that?

The bank gets the interest, the govt gets the tax.

Edited by SeeYouNextTuesday
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Every pound you save is worth £3

Borrow £1, pay back £2, have to earn £3 to pay it back.

How's that?

The bank gets the interest, the govt gets the tax.

I'm not convinced about that extra £1 as a saving. It's never yours is it? Or do you mean you have less debt to service? So you can work less hours or retire earlier so it's a time saving? I suppose you could invest the saving so it might be worth more? If you save £10k and borrow less you could use the £19k less total repayment to buy shares etc. out of the reduced mortgage payment each month.

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I'm not convinced about that extra £1 as a saving. It's never yours is it? Or do you mean you have less debt to service? So you can work less hours or retire earlier so it's a time saving? I suppose you could invest the saving so it might be worth more? If you save £10k and borrow less you could use the £19k less total repayment to buy shares etc. out of the reduced mortgage payment each month.

Yes, ultimately less work to be done, money to be earned.

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Genuine answer? OK...

The last 4 years I have spent renting cheaply. As I do so, I have no commitments, which means I can jump around finding the best work contracts. My rent in the last 4 years has been £31,200.00. The average price drop I'm seeing for 4 bed detached houses in Cheshire is a lot more than that. And those houses continue to decrease in price. In the last 4 years, due to my renting flexibility, those contracts have added another £330k (+ interest) to my "deposit", post tax. Happy now?

Ps. I'll prepare myself for the slagging that Bruce gets - as everyone on HPC hates a winner. :)

No, you're alright because you don't always crow about it. Nothing wrong with 'winners' per se.

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For 3yrs now we've had the drip drip of ~0.2% nominal drops, nothing significant, sure by the end of the year we get maybe 1-2% drops, well whoopde doo.

If we continue to have similar drops, are you still going to wait it out, or will there come a point where you throw the towel in ?

(For the sake of argument, let's ignore any HPC in real terms, in terms of gold or your asset of choice)

For the young their is now no pressure to buy, as prices are not going anywhere, especially up,

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I'll think about giving up circa August 2014.

I'm not massively bothered by having 'stability' (good job, no kids on the horizon, no nagging from other half). Most of the home-ownerist psychological factors don't apply to my circumstances. I probably don't get a rental deal that's as good as some are claiming, but in my experience landlords are mostly reasonable so it's a convenient lifestyle.

The economic situation will remain awful for years, UK austerity measures have barely kicked in, we are flirting with a double-dip recession, and across the Channel the euro could still collapse. I'm predicting -5% yearly nominal HPI for several years. A slow downward grind...

Under those circumstances, I can and will certainly wait... but I understand that some can't and won't.

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No, you're alright because you don't always crow about it. Nothing wrong with 'winners' per se.

The only thing established thus far is renting is fine should you lead a long term no commitments life, finances allowing.

It's hardly a view that has it's finger on the pulse on most FTB's I know.

Don't get me wrong I don't begrudge that position, well done but personally speaking I don't wish to wait past my thirty's to buy as they're will be things by then I will delay by not 'living' in my own space.

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The only thing established thus far is renting is fine should you lead a long term no commitments life, finances allowing.

It's hardly a view that has it's finger on the pulse on most FTB's I know.

Don't get me wrong I don't begrudge that position, well done but personally speaking I don't wish to wait past my thirty's to buy as they're will be things by then I will delay by not 'living' in my own space.

and a first class example of a "renting prevents you getting on with life" post, with a frissant undertone of renting is "dead money", delicately plated up in line 1.

Edited by Bloo Loo
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and a first class example of a "renting prevents you getting on with life" post, with a frissant undertone of renting is "dead money", delicately plated up in line 1.

I'd like to get on with my life....

I KNOW!!! I'll borrow a ****** load of money with no intention, or means of ever paying it back.

Im renting, im the mug, cos i didn't do what she did.

Pay your tax woman.

(See TV gal thread).

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I've wasted over £50K renting for the past 4 years waiting for a crash that doesn't seem any closer. So I threw the towel in and bought a 3 bed house last week. I think a crash will eventually come, it has to, but how many more £50Ks do I need to throw away before I see it?

What about those that bought for cash....they could well have lost that or more than that in interest and or income from other low risk investments...not only that their house has also lost 10% of its value over the last 12 months. ;)

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What about those that bought for cash....they could well have lost that or more than that in interest and or income from other low risk investments...not only that their house has also lost 10% of its value over the last 12 months. ;)

On the other hand, they have no rent, no mortgage interest, no negative equity. In the long term not having those ongoing costs will more than make up for any short to medium term loss on missed investments.

Knowing that the majority of your wealth is not passing through the hands of a load of middlemen each day is also a nice feeling to have.

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30+, 2 kids, renting.

Are your kids school-age? How do you deal with the risk of being served notice and then needing to find somewhere else at short notice, still convenient for getting the kids into school etc? Or do you have a tenancy agreement which gives you a nice wedge of notice?

I ask as that's the main factor swinging me away from my current situation of renting. I've friends with kids in Germany and they get 12 months notice so it's not as big a deal, but I don't know anyone with school age kids who rents in the UK. Note I'm not saying lots don't do it perfectly happily - I just don't know them!

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My landlords just paid for someone to come round bleed all my rads and he could be looking at a 2K bill for a new boiler .

I'll add that onto the 200K I estimate I am better off by through renting.

I may have to change jobs soon, so I'll be able to give 1 months notice and move on for a better opportunity.

I love renting. :lol:

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Are your kids school-age? How do you deal with the risk of being served notice and then needing to find somewhere else at short notice, still convenient for getting the kids into school etc? Or do you have a tenancy agreement which gives you a nice wedge of notice?

I ask as that's the main factor swinging me away from my current situation of renting. I've friends with kids in Germany and they get 12 months notice so it's not as big a deal, but I don't know anyone with school age kids who rents in the UK. Note I'm not saying lots don't do it perfectly happily - I just don't know them!

you can have 12 months notice...just ask for it.

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Are your kids school-age? How do you deal with the risk of being served notice and then needing to find somewhere else at short notice, still convenient for getting the kids into school etc? Or do you have a tenancy agreement which gives you a nice wedge of notice?

I ask as that's the main factor swinging me away from my current situation of renting. I've friends with kids in Germany and they get 12 months notice so it's not as big a deal, but I don't know anyone with school age kids who rents in the UK. Note I'm not saying lots don't do it perfectly happily - I just don't know them!

Eldest starts school in September, don't know which school yet but have applied. Don't anticipate having to move further than a mile or 2 even if given notice. Not sure where the inconvenience arises?

Could be subject to 2 months notice at any time which is not ideal with a newborn but won't kill anyone.

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On the other hand, they have no rent, no mortgage interest, no negative equity. In the long term not having those ongoing costs will more than make up for any short to medium term loss on missed investments.

Knowing that the majority of your wealth is not passing through the hands of a load of middlemen each day is also a nice feeling to have.

......housing yourself costs money whatever way you look at it, some pay more doing it others less, some can afford to pay more mostly the ones who can afford to buy ....... so the punters that buy to let out are taking on a high risk investment when fewer can afford or are prepared to pay the rents they ask for/need so more unpaid rents and voids, add to that their investment capital is also losing money and costs are increasing not to mention the hassle factor........when property prices are falling property investors find other safer productive homes for their money. ;)

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My landlords just paid for someone to come round bleed all my rads and he could be looking at a 2K bill for a new boiler .

I'll add that onto the 200K I estimate I am better off by through renting.

I may have to change jobs soon, so I'll be able to give 1 months notice and move on for a better opportunity.

I love renting. :lol:

Me too. In the current economic climate renting makes perfect sense.

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