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Better Off Buying Than Renting

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That have this story on a loop I think as it gets reprinted every 6 months to a year.

Total bullshite obviously as firstly it depends entirely on the size of deposit and doesn't take into account maintaining the house.

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Hilarious, they fudge the numbers as far as they can and can only make the difference 900 quid a year !

Did they factor in maintenance and if prices drop 0.1% you've lost your 900 quid and don't forget selling fees, that would probably make it equal.....with low interst rates and gifted deposits...you'd be mad to buy.

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Its fairly obvious that this is also an interest only mortgage so you won't actually own the house at the end, either.

Right, so what they are saying is, renting is cheaper than renting :lol::lol::lol::lol: Only with th I/O scheme the initial deposit is much higher, you pay a load of tax to move in, you might never be able to move again and if you do you have to pay a fortune to end your tenancy :rolleyes:

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..the financially illiterate being misled by VIs ...what about maintenance, mobility (for work) and as they quote 'falling house prices' ..where your deposit disappears in a projected valuation a few months on just before your loan goes under the water....this is misselling led by the government who are just as naive...house prices need to fall to an unsupported level before it is practical to buy... :rolleyes:

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Hilarious, they fudge the numbers as far as they can and can only make the difference 900 quid a year !

The fact that Halifax, a state controlled lender, consider this continued ramping to be necessary is telling.

The more they try to convince me to buy now, the more I know that it is not in my interest to do so.

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That have this story on a loop I think as it gets reprinted every 6 months to a year.

Total bullshite obviously as firstly it depends entirely on the size of deposit and doesn't take into account maintaining the house.

Alternates between Halifax and Zoopla.

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Where I live in Scotland it is cheaper to buy than rent. It is not hard to find a 3 bed terrace house for £80,000. Assuming you can get together a 5% deposit a repayment mortgage will cost approximately £320 per month. To rent the same house costs £450 per month.

Large swathes of the Scottish central belt are like this price wise. Unless you are getting housing benefit, then renting is not as cost effective as buying here.

I think some of you guys should broaden your horizons a bit as in England and Wales your are getting screwed over regarding the cost of housing.

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Its fairly obvious that this is also an interest only mortgage so you won't actually own the house at the end, either.

im not sure it is.

the average UK house price is supposedly around £160-£170,000 and as an example if you took a £150,000 mortgage IO at say 3.5%, the interest is only £430 per month.

its likely most people renting a £160,000 house are paying more than £430 per month.

most people renting tend to be in 2-3 bed houses and at the lower end of the scale rather than expensive houses so i suspect for people outside of london, buying is currently cheaper than renting because interest rates are so low.

Edited by mfp123

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Where I live in Scotland it is cheaper to buy than rent. It is not hard to find a 3 bed terrace house for £80,000. Assuming you can get together a 5% deposit a repayment mortgage will cost approximately £320 per month. To rent the same house costs £450 per month.

Large swathes of the Scottish central belt are like this price wise. Unless you are getting housing benefit, then renting is not as cost effective as buying here.

I think some of you guys should broaden your horizons a bit as in England and Wales your are getting screwed over regarding the cost of housing.

If I could move to Scotland or indeed northern England and still have job I would be very happy to buy a house for £80,000. In fact I would be mortgage free. Unfortunately I would never be able to get a half decent job...

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Where I live in Scotland it is cheaper to buy than rent. It is not hard to find a 3 bed terrace house for £80,000. Assuming you can get together a 5% deposit a repayment mortgage will cost approximately £320 per month. To rent the same house costs £450 per month.

Large swathes of the Scottish central belt are like this price wise. Unless you are getting housing benefit, then renting is not as cost effective as buying here.

I think some of you guys should broaden your horizons a bit as in England and Wales your are getting screwed over regarding the cost of housing.

Take it you are not in Edinburgh?

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If I could move to Scotland or indeed northern England and still have job I would be very happy to buy a house for £80,000. In fact I would be mortgage free. Unfortunately I would never be able to get a half decent job...

You would be able to afford to take a much lower paid job up here than you would need down south.

We have just bought this house for £80000 with a 25% deposit. Our mortgage is only going to be £240 a month

http://www.rightmove.co.uk/property-for-sale/property-19803666.html

The guy we bought it from paid £102,000 for it 4 years ago.

It simply isn't true to say it is always cheaper to rent than it is to buy. In many places around the UK this isn't the case.

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You would be able to afford to take a much lower paid job up here than you would need down south.

I agree with your central tenet that houses are not priced in the same income multiples throughout the UK,

But to take a 'much lower paid job' for many would take an £80k house into the high income multiple bracket, and so they would be no better off.

or are there houses/flats for 45-50k or less ?

Edited by LiveinHope

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im not sure it is.

the average UK house price is supposedly around £160-£170,000 and as an example if you took a £150,000 mortgage IO at say 3.5%, the interest is only £430 per month.

its likely most people renting a £160,000 house are paying more than £430 per month.

most people renting tend to be in 2-3 bed houses and at the lower end of the scale rather than expensive houses so i suspect for people outside of london, buying is currently cheaper than renting because interest rates are so low.

Yes and no. The last flat I rented was £400 p.m, going up to £450 p.m after a couple of years, and at the peak those flats easily traded at 160k, and a few years ago I rented a room in a decent postcode (Fred Goodwin was round the corner, don`t know if that count`s as "decent"?) for £333 p.m. Of course someone with mortgage debt also has to pay down the principle if they ever hope to own their property. I believe the way to go until the inevitable correction is cheap rent and any extra money saved/invested away from property.

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I agree with your central tenet that houses are not priced in the same income multiples throughout the UK,

But to take a 'much lower paid job' for many would take an £80k house into the high income multiple bracket, and so they would be no better off.

or are there houses/flats for 45-50k

ccc tracks the Edinburgh market closer than me I think. I believe he said there were flats approaching the 50 - 60k mark in central Edinburgh now, Gorgie, Dalry, Leith, Easter Rd type areas.

The problem with flats is you have no control over who your neighbours are, and I believe the system that was in place here for statutory repairs with some legal backing to get people in shared stairs to pay their share no longer exists. That last reason alone is good enough to make me never want to buy a tenement flat at any price.

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I agree with your central tenet that houses are not priced in the same income multiples throughout the UK,

But to take a 'much lower paid job' for many would take an £80k house into the high income multiple bracket, and so they would be no better off.

or are there houses/flats for 45-50k or less ?

You could comfortably afford an £80000 house on a single salary of £18,000 up here. So two people on minimum wage could afford an £80000 house.

My Dad just sold his flat for £50,000 although it wasn't in the nicest area admittedly.

Edited by lovelyhead

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No. But we are about a 40 minute commute outside Edinburgh.

Fair enough, it sometimes takes me an hour to get across Edinburgh for work, but I like being able to just step out onto the street and straight into a café/pub/barber or whatever, or onto frequent public transport, but I take your point that the crash is in full swing in many parts of Scotland and the UK, and it is not always cheaper or smarter to rent.

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ccc tracks the Edinburgh market closer than me I think. I believe he said there were flats approaching the 50 - 60k mark in central Edinburgh now, Gorgie, Dalry, Leith, Easter Rd type areas.

The problem with flats is you have no control over who your neighbours are, and I believe the system that was in place here for statutory repairs with some legal backing to get people in shared stairs to pay their share no longer exists. That last reason alone is good enough to make me never want to buy a tenement flat at any price.

You are right,

Ultimately, whether to buy or rent at any time is a simple cost-beneftit analysis.

An analysis that few seem capable to make since irrational emotions often dictate that individuals are selective in what they include in the analysis.

I rent

Edited by LiveinHope

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Fair enough, it sometimes takes me an hour to get across Edinburgh for work, but I like being able to just step out onto the street and straight into a café/pub/barber or whatever, or onto frequent public transport, but I take your point that the crash is in full swing in many parts of Scotland and the UK, and it is not always cheaper or smarter to rent.

I think in a large majority of Scotland, prices have reached a sensible level again. Estate agents have no qualms in telling you that the market is very slow. On most of the home reports we seen it actually stated that.

Edinburgh, Aberdeen etc can still be eye wateringly expensive in some parts but these are Scotland's equivalents to London. I don't think these places will ever become really cheap or affordable for the average guy. But if you are prepared to move outside of these hotspots you can live affordably.

We are not long back from York, Manchester and Blackpool. The prices down there are insane. I really feel for young people down south as they are getting screwed.

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You could comfortably afford an £80000 house on a single salary of £18,000 up here. So two people on minimum wage could afford an £80000 house.

My Dad just sold his flat for £50,000 although it wasn't in the nicest area admittedly.

£80,000 at £18,000 is 4.44 x income so will become tight if/when interest rates rise.

I would not recommend 2 people on minimum wage sharing an 80K house. Minimum wage jobs are more likely to be unpredictable.

I agree properties are cheaper, but is not the benefit still only apparent if you are earning at the higher end of the local wage spectrum ?

But Scotland is clearly getting there for lower wage earners faster than the rest of the UK.

Edited by LiveinHope

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£80,000 at £18,000 is 4.44 x income so will become tight if/when interest rates rise.

I would not recommend 2 people on minimum wage sharing an 80K house. Minimum wage jobs are more likely to be unpredictable.

I agree properties are cheaper, but is not the benefit still only apparent if you are earning at the higher end of the local wage spectrum ?

But Scotland is clearly getting there for lower wage earners faster than the rest of the UK.

I was basing it on the person having a £10,000 deposit. So £70,000 at £18,000 would give you 3.8x income. Nearly bang on historically safe income multiple's.

Doing the same calculation for joint minimum wage income gives you -

£10,978.60 x 2 = £21957.2

£70,000 / £21957.2 = 3.1

So 3.1x income is also not too far off historically safe income multiple's.

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I was basing it on the person having a £10,000 deposit. So £70,000 at £18,000 would give you 3.8x income. Nearly bang on historically safe income multiple's.

Doing the same calculation for joint minimum wage income gives you -

£10,978.60 x 2 = £21957.2

£70,000 / £21957.2 = 3.1

So 3.1x income is also not too far off historically safe income multiple's.

OK - And Scotland has some nice parts too ;)

8-10 x income in my neck of the woods, and that includes newbuilds

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