10 Years Ago

[2004lurker]

First time post on the forum after lurking for about 10 years....sorry if this is a long one - 10 years of stuff in head

So, 10 years ago I was in my mid-twenties and, I think, I was reading the FTAlphaville blog and a poster had posted a link to this website. I started reading the forums with interest. At the time I was living in small-town Scotland with my Canadian girlfriend, now wife, in a rented flat. She was studying and working part-time and I had a public-sector job. I had always been wary of house prices so finding this site and reading the posts here justified my reasoning that house prices were over-valued in 2004/5. Over the next ten years I nodded my head about liar loans and laughed at twigs in vases. I shook my head in disbelief at all the measures being put in place to prop up the housing market while interest rates are at 300-year lows.

We do not come from well-off backgrounds. We had no money to start with, but we were the first in our families to go to university. We got student loans, however we were very good savers. Only one second-hand car. No TV, therefore no TV licence - which was fun when they sent a threatening letter to pay. I sent one back saying good luck getting a payment when we have no TV. They said they would come and visit. They did.....2 people turned up and asked to see proof of the non-TV when I was out working. My girlfriend, savvy as she was, said to them on the doorstep I don't need to let you in you know. She did let them and made them feel awkward by saying "Ok, see if you can find it." they left rather quickly and we weren't bothered again.

Our luxury was holidays. We are travellers at heart. We would always make the point of keeping a holiday fund and try and get away twice a year - at least. Renting helped with this. Our rent was relatively cheap for a 2 bed. We had inexpensive furniture too, no expensive TV, fixtures or fittings, pay-as-you-go phones, cheap clothes etc etc.

We skirted around the issue of buying a house, but we weren't prepared to get a 100% or more LTV mortgage. Spending 120k on a house back in 2005, 2006, 2007 seemed expensive, so we were happy renting until my girlfriend finished her studies. My girlfriend finished her post-grad university and graduated in 2009. We then decided to emigrate to Canada in 2009. Process took a year. There were a number of reasons for immigrating to Canada....some included the idea of a better life, weather, job, house prices etc. We got married - wedding cost $7,000 but was fantastic. Instead of spending shitloads on a wedding we used our money to travel around Europe for 2 weeks and go to Peru. Seemed more appropriate to spend it on travelling than expensive "Save the marriage date", invitations, limos, crazy amounts of flowers, etc, etc. We also don't have kids so that frees us to travel too.

We have now been here for 4 years, have steady jobs, go great holidays but are still saving like crazy for a deposit. Then it dawned on us....do we ever need to buy a house? To put things into perspective we pay $1,300 in rent per month for a fantastic 2-bed apartment. If we buy a house here one of the costs associated with it is property tax (council tax) $3,000-$4,000 per year. We don't pay this when we rent. Equivalent to 1/3 rent per year.

Our friends in Canada are all in their mid-30s. Renting. I don't know who is propping up the market anymore. There seems to be a lot of foerign investment. People in their 20s can't afford to get on the ladder unless they get their parents to give them a hand up....meaning that the parents have to work longer and don't retire, meaning that people in their 20s can't get a full-time job....hmmm.

Back home all my friends have bought homes.....they are all tied to their house. They keep saying that we should buy, best investment etc. I like to think that we invest in holidays and enjoying ourselves while renting. Renting does seem to be a dirty word.

I do see a correction coming in both UK and Canada. The governments have surely run out of "propping-up-the-market" options. If people like ourselves have given up on buying a home at historically low interest rates, who is buying? I think my favourite thread over the last year has been the 1M pound semi-detached 2-bed home in London that was on a very steep hill. Roughly a mortgage of 5k a month with 10% down.... Have people gone insane? 5k a month before council tax with maintenance costs; that is large proportion of our rent in CAD$, and I'm guessing other people's rent in the UK for a year. 60K mortgage a year means is the equivalent of renting for 5 years.

I think what I'm trying to say is it all depends on your situation, but renting has giving us a great life so far and reading the forums has been very beneficial. So let's say house prices go down by 20-30%, the question that we have is, are we so apathetic towards owning a house now would we ever consider buying even with a price reduction?

[katchytitle]

As you say its all about personal choice. There are plenty of people who have never bought a home. Other people have a personal attachment to owning a house to bring up their children. Who knows where it will all end. I wonder if you would consider the need to buy if you had kids? People want stability when they have kids and the elites and government have ruthlessly exploited this fact in order to keep people working to pay off the mortgage. It creates a nice stable society where people earn enough to have a reasonable time and don't complain too much (in the middle classes). As this era ends it'll be interesting to see if people with children will be willing to live with less stability.

[StainlessSteelCat]

The missing dimension is the quality, cost and stability of rentals in Canada v UK. I can't speak for Canada so it'll be interesting to hear how it compares.

In the UK you can often pay a high proportion of your income (50%+) to rent a poorly maintained and insulated place that offers no real security of tenure. The worst case scenario is you could be moving every six months, or if not actually doing so - there's always the possibility. Moving costs, possible loss of at least some of the deposit every six months adds up. Plus landlording seems to attract the absolute scum of the earth to the sector. By the time they are in their mid 30s, I suggest that most renters will have had one truly horrible landlord or renting experience.

We have reached the situation in the UK where the accommodation now only provided by the state as a safety net to the poor and vulnerable, and so comfortable rather than luxurious, and offering cheapish rents together the security of tenure in often marginal locations is looked on with envy by the average young working professional. That didn't used to be the case as little as a couple of decades ago.

The above combined with saturation bombing of property programmes and other media showing the better life and wealth offered by a mortgage has led many to throw themselves onto the fire. In many cases, even the truly thick and reckless house buyers have proved absolutely correct for doing so - so far at least - due to historically low interest rates, massive bank forbearance and seemingly ever increasing house prices (at least in some areas).

It's a baffling state of affairs which successive UK governments have absolutely failed to address - mostly, because regardless of the colour of their party, many belong to the land lording class.

It is worth saying that there's probably a significant minority in the UK who do get what they need from renting i.e. a cheap comfortable place to stay with no maintenance costs, flexibility, fairly secure tenure and a decent landlord who is aware of their responsibilities. But I suggest that's not the experience of many.

Edited October 9, 2014 by StainlessSteelCat

[19 year mortgage 8itch]

The missing dimension is the quality, cost and stability of rentals in Canada v UK. I can't speak for Canada so it'll be interesting to hear how it compares.

In the UK you can often pay a high proportion of your income (50%+) to rent a poorly maintained and insulated place that offers no real security of tenure. The worst case scenario is you could be moving every six months, or if not actually doing so - there's always the possibility. Moving costs, possible loss of at least some of the deposit every six months adds up. Plus landlording seems to attract the absolute scum of the earth to the sector. By the time they are in their mid 30s, I suggest that most renters will have had one truly horrible landlord or renting experience.

We have reached the situation in the UK where the accommodation now only provided by the state as a safety net to the poor and vulnerable, and so comfortable rather than luxurious, and offering cheapish rents together the security of tenure in often marginal locations is looked on with envy by the average young working professional. That didn't used to be the case as little as a couple of decades ago.

The above combined with saturation bombing of property programmes and other media showing the better life and wealth offered by a mortgage has led many to throw themselves onto the fire. In many cases, even the truly thick and reckless house buyers have proved absolutely correct for doing so - so far at least - due to historically low interest rates, massive bank forbearance and seemingly ever increasing house prices (at least in some areas).

It's a baffling state of affairs which successive UK governments have absolutely failed to address - mostly, because regardless of the colour of their party, many belong to the land lording class.

It is worth saying that there's probably a significant minority in the UK who do get what they need from renting i.e. a cheap comfortable place to stay with no maintenance costs, flexibility, fairly secure tenure and a decent landlord who is aware of their responsibilities. But I suggest that's not the experience of many.

Why do people go into buying thinking things will turn out for the best

But

Go into renting thinking things will turn out for the worst?

By your definition, I am not most. I lay the blame with those who portray the rental condition as such. You have powers as a tenant, use them.

[StainlessSteelCat]

Why do people go into buying thinking things will turn out for the best

But

Go into renting thinking things will turn out for the worst?

By your definition, I am not most. I lay the blame with those who portray the rental condition as such. You have powers as a tenant, use them.

I suggest they don't go into renting expecting the worse - but simply that renting is the default state for young people and their experiences leads to look for a "better" option. A option which, you are right, is portrayed by almost everyone in the media and society as a whole as one which will turn out far better than renting.

[Sandwiches33]

First time post on the forum after lurking for about 10 years....sorry if this is a long one - 10 years of stuff in head

So, 10 years ago I was in my mid-twenties and, I think, I was reading the FTAlphaville blog and a poster had posted a link to this website. I started reading the forums with interest. At the time I was living in small-town Scotland with my Canadian girlfriend, now wife, in a rented flat. She was studying and working part-time and I had a public-sector job. I had always been wary of house prices so finding this site and reading the posts here justified my reasoning that house prices were over-valued in 2004/5. Over the next ten years I nodded my head about liar loans and laughed at twigs in vases. I shook my head in disbelief at all the measures being put in place to prop up the housing market while interest rates are at 300-year lows.

We do not come from well-off backgrounds. We had no money to start with, but we were the first in our families to go to university. We got student loans, however we were very good savers. Only one second-hand car. No TV, therefore no TV licence - which was fun when they sent a threatening letter to pay. I sent one back saying good luck getting a payment when we have no TV. They said they would come and visit. They did.....2 people turned up and asked to see proof of the non-TV when I was out working. My girlfriend, savvy as she was, said to them on the doorstep I don't need to let you in you know. She did let them and made them feel awkward by saying "Ok, see if you can find it." they left rather quickly and we weren't bothered again.

Our luxury was holidays. We are travellers at heart. We would always make the point of keeping a holiday fund and try and get away twice a year - at least. Renting helped with this. Our rent was relatively cheap for a 2 bed. We had inexpensive furniture too, no expensive TV, fixtures or fittings, pay-as-you-go phones, cheap clothes etc etc.

We skirted around the issue of buying a house, but we weren't prepared to get a 100% or more LTV mortgage. Spending 120k on a house back in 2005, 2006, 2007 seemed expensive, so we were happy renting until my girlfriend finished her studies. My girlfriend finished her post-grad university and graduated in 2009. We then decided to emigrate to Canada in 2009. Process took a year. There were a number of reasons for immigrating to Canada....some included the idea of a better life, weather, job, house prices etc. We got married - wedding cost $7,000 but was fantastic. Instead of spending shitloads on a wedding we used our money to travel around Europe for 2 weeks and go to Peru. Seemed more appropriate to spend it on travelling than expensive "Save the marriage date", invitations, limos, crazy amounts of flowers, etc, etc. We also don't have kids so that frees us to travel too.

We have now been here for 4 years, have steady jobs, go great holidays but are still saving like crazy for a deposit. Then it dawned on us....do we ever need to buy a house? To put things into perspective we pay $1,300 in rent per month for a fantastic 2-bed apartment. If we buy a house here one of the costs associated with it is property tax (council tax) $3,000-$4,000 per year. We don't pay this when we rent. Equivalent to 1/3 rent per year.

Our friends in Canada are all in their mid-30s. Renting. I don't know who is propping up the market anymore. There seems to be a lot of foerign investment. People in their 20s can't afford to get on the ladder unless they get their parents to give them a hand up....meaning that the parents have to work longer and don't retire, meaning that people in their 20s can't get a full-time job....hmmm.

Back home all my friends have bought homes.....they are all tied to their house. They keep saying that we should buy, best investment etc. I like to think that we invest in holidays and enjoying ourselves while renting. Renting does seem to be a dirty word.

I do see a correction coming in both UK and Canada. The governments have surely run out of "propping-up-the-market" options. If people like ourselves have given up on buying a home at historically low interest rates, who is buying? I think my favourite thread over the last year has been the 1M pound semi-detached 2-bed home in London that was on a very steep hill. Roughly a mortgage of 5k a month with 10% down.... Have people gone insane? 5k a month before council tax with maintenance costs; that is large proportion of our rent in CAD$, and I'm guessing other people's rent in the UK for a year. 60K mortgage a year means is the equivalent of renting for 5 years.

I think what I'm trying to say is it all depends on your situation, but renting has giving us a great life so far and reading the forums has been very beneficial. So let's say house prices go down by 20-30%, the question that we have is, are we so apathetic towards owning a house now would we ever consider buying even with a price reduction?

Continue renting and go on holiday? I would agree with that. Everything is being stolen anyway, any money in anything seems to be a target for these vultures as they try to extract wealth from anywhere in a world economy which is spiraling downward. The one thing they cannot take off you is "experience" so go and enjoy yourself while you are young.

This is the route I am going, been on some amazing adventures, even if travel isnt your thing the people I know who rent have lots of money to pursue hobbies and interests. In fact the people I know mortgaged up to the eyeballs have a much inferior quality of life and seem to carry with them an enormous weight of depression. Oh they talk of the future and investment and all that shit but all i really see now is failing banks draining everyone like a tumour.

Its going mainstream now that the economy is finished, may not even ever recover especially on a planet of limited resource. This could be the long slide down and itll never ever pick up again. As governments and banks get ever more aggressive in the face of the collapse we will see more bank and pension seizures. They are already completely out of ponzi saving schemes and its all just props smoke and mirrors. Its just a case of how long they can pad it out. Ask yourself how likely it is a whole bunch of skilled well paid jobs are going to appear and save the economy? Jobs where people make new stuff and drive te economy?

So what to do? just enjoy yourself and ride the ******* all the way down.

I am also completely sick of banks selling fear, What if your old and dont have a house? blah blah. They sell you fear then bleed you to death. Live life, rent what you need for each of lifes situations ( boring life to link yourself to one place for 25 years anyway)

Have some savings just in case, (actual savings not a mystical house value.) and I will see you on one of my extended breaks in the maldives

[streamingfreedom]

Good comments here. Since we had our daughter our view to renting has changed entirely. We were fairly ok renting but now we have been booted out with 6 weeks notice at a landlords whim of what has over the last two years become a family home, while the rental market is full of poor quality but overpriced properties, is pretty awful. Hence we are taking the decision to move in with parents 150 miles away and me commute to work in the weeks while we save deposit.

Renting is great in some countries, but not in the UK. I would buy a house and accept a 30% price drop to get away from renting in the uk. As long as we can afford a place suitable to live in for the long run, no worries. The mistake is to stretch for a starter home or go all out on two incomes (as inevitably one drops away at some point).

And here's the thing, we live in a society based on the concept of private ownership, and therefore private owners are generally the ones rightly or wrongly who are protected over time.

[2004lurker]

As you say its all about personal choice. There are plenty of people who have never bought a home. Other people have a personal attachment to owning a house to bring up their children. Who knows where it will all end. I wonder if you would consider the need to buy if you had kids? People want stability when they have kids and the elites and government have ruthlessly exploited this fact in order to keep people working to pay off the mortgage. It creates a nice stable society where people earn enough to have a reasonable time and don't complain too much (in the middle classes). As this era ends it'll be interesting to see if people with children will be willing to live with less stability.

I think it would be different if we had had kids. You need to anchor yourself a bit for nurseries/schools etc etc.

Maybe people with kids, in the generation to come, will be forced to live with less stability. They may expect it. No jobs for life means moving around a lot more.

[2004lurker]

The missing dimension is the quality, cost and stability of rentals in Canada v UK. I can't speak for Canada so it'll be interesting to hear how it compares.

In the UK you can often pay a high proportion of your income (50%+) to rent a poorly maintained and insulated place that offers no real security of tenure. The worst case scenario is you could be moving every six months, or if not actually doing so - there's always the possibility. Moving costs, possible loss of at least some of the deposit every six months adds up. Plus landlording seems to attract the absolute scum of the earth to the sector. By the time they are in their mid 30s, I suggest that most renters will have had one truly horrible landlord or renting experience.

We have reached the situation in the UK where the accommodation now only provided by the state as a safety net to the poor and vulnerable, and so comfortable rather than luxurious, and offering cheapish rents together the security of tenure in often marginal locations is looked on with envy by the average young working professional. That didn't used to be the case as little as a couple of decades ago.

The above combined with saturation bombing of property programmes and other media showing the better life and wealth offered by a mortgage has led many to throw themselves onto the fire. In many cases, even the truly thick and reckless house buyers have proved absolutely correct for doing so - so far at least - due to historically low interest rates, massive bank forbearance and seemingly ever increasing house prices (at least in some areas).

It's a baffling state of affairs which successive UK governments have absolutely failed to address - mostly, because regardless of the colour of their party, many belong to the land lording class.

It is worth saying that there's probably a significant minority in the UK who do get what they need from renting i.e. a cheap comfortable place to stay with no maintenance costs, flexibility, fairly secure tenure and a decent landlord who is aware of their responsibilities. But I suggest that's not the experience of many.

From a Canadian perspective the flats seem to be owned by larger corportations rather than single BTL landlords. Condos also make up a huge percentage of the market, but they come with sometimes hefty management fees.

Growing up I was sold the story of get a job, buy a house, have a family. It is a cultural in the UK. When in primary school the teacher doesn't ask you to draw a flat, you are asked to draw a detached house with a nice fence, chimney, clouds and a tree. It is like it was instilled into us from an early age. You are right the media has bombed people in the UK with the dream of owning. What was it Changing Rooms and Location x 3? Own a home, live the dream.

[2004lurker]

Why do people go into buying thinking things will turn out for the best

But

Go into renting thinking things will turn out for the worst?

By your definition, I am not most. I lay the blame with those who portray the rental condition as such. You have powers as a tenant, use them.

Go into renting thinking things will turn out for the worst?

Quotes from family after renting for 8 years now.....

"When are you going to buy?"

"You are throwing money away"

"Do you not want to settle?"

"When are you haing kids?"

Yes, renting seems to be the unstable state of mind.

[2004lurker]

Continue renting and go on holiday? I would agree with that. Everything is being stolen anyway, any money in anything seems to be a target for these vultures as they try to extract wealth from anywhere in a world economy which is spiraling downward. The one thing they cannot take off you is "experience" so go and enjoy yourself while you are young.

This is the route I am going, been on some amazing adventures, even if travel isnt your thing the people I know who rent have lots of money to pursue hobbies and interests. In fact the people I know mortgaged up to the eyeballs have a much inferior quality of life and seem to carry with them an enormous weight of depression. Oh they talk of the future and investment and all that shit but all i really see now is failing banks draining everyone like a tumour.

Its going mainstream now that the economy is finished, may not even ever recover especially on a planet of limited resource. This could be the long slide down and itll never ever pick up again. As governments and banks get ever more aggressive in the face of the collapse we will see more bank and pension seizures. They are already completely out of ponzi saving schemes and its all just props smoke and mirrors. Its just a case of how long they can pad it out. Ask yourself how likely it is a whole bunch of skilled well paid jobs are going to appear and save the economy? Jobs where people make new stuff and drive te economy?

So what to do? just enjoy yourself and ride the ******* all the way down.

I am also completely sick of banks selling fear, What if your old and dont have a house? blah blah. They sell you fear then bleed you to death. Live life, rent what you need for each of lifes situations ( boring life to link yourself to one place for 25 years anyway)

Have some savings just in case, (actual savings not a mystical house value.) and I will see you on one of my extended breaks in the maldives

Maldives is definitely on the bucket list.

I honestly can't believe how weird things have got. Everything is expensive. Go for a dinner and night out - 100 pounds minimum. That is a good chuck of people's take home these days. Car servicing, mobile phones.

Another anecdotal...... I had a new boss last year. They had been moved into a new position in the company. Had worked for the same company for 30 years paying into a pension. In November my boss was diagnosed with leukemia. So, yeah, live life to the full. You never know you may have mortgaged yourself up the eyeballs for 25 years, and paid into a pension for 30, only for life to kick you in the balls.

[2004lurker]

Good comments here. Since we had our daughter our view to renting has changed entirely. We were fairly ok renting but now we have been booted out with 6 weeks notice at a landlords whim of what has over the last two years become a family home, while the rental market is full of poor quality but overpriced properties, is pretty awful. Hence we are taking the decision to move in with parents 150 miles away and me commute to work in the weeks while we save deposit.

Renting is great in some countries, but not in the UK. I would buy a house and accept a 30% price drop to get away from renting in the uk. As long as we can afford a place suitable to live in for the long run, no worries. The mistake is to stretch for a starter home or go all out on two incomes (as inevitably one drops away at some point).

And here's the thing, we live in a society based on the concept of private ownership, and therefore private owners are generally the ones rightly or wrongly who are protected over time.

We rented from a private landlord when we were in the UK. We had several problems. We didn't really have a choice of good accommodation too.

Here we had a choice and could move into a place we wanted. There are several different variables involved though I know.

On an unrelated note this is not a Canada is better than the UK thread, or a renting is better than buying. I miss the UK a lot. I miss the humour, football, pints and not being under a foot of snow. The UK just seemed to go downhill fast. Canada is just a few years behind the curve. All "first" nations are racing each other to the bottom.

[dances with sheeple]

Continue renting and go on holiday? I would agree with that. Everything is being stolen anyway, any money in anything seems to be a target for these vultures as they try to extract wealth from anywhere in a world economy which is spiraling downward. The one thing they cannot take off you is "experience" so go and enjoy yourself while you are young.

This is the route I am going, been on some amazing adventures, even if travel isnt your thing the people I know who rent have lots of money to pursue hobbies and interests. In fact the people I know mortgaged up to the eyeballs have a much inferior quality of life and seem to carry with them an enormous weight of depression. Oh they talk of the future and investment and all that shit but all i really see now is failing banks draining everyone like a tumour.

Its going mainstream now that the economy is finished, may not even ever recover especially on a planet of limited resource. This could be the long slide down and itll never ever pick up again. As governments and banks get ever more aggressive in the face of the collapse we will see more bank and pension seizures. They are already completely out of ponzi saving schemes and its all just props smoke and mirrors. Its just a case of how long they can pad it out. Ask yourself how likely it is a whole bunch of skilled well paid jobs are going to appear and save the economy? Jobs where people make new stuff and drive te economy?

So what to do? just enjoy yourself and ride the ******* all the way down.

I am also completely sick of banks selling fear, What if your old and dont have a house? blah blah. They sell you fear then bleed you to death. Live life, rent what you need for each of lifes situations ( boring life to link yourself to one place for 25 years anyway)

Have some savings just in case, (actual savings not a mystical house value.) and I will see you on one of my extended breaks in the maldives

Good post. They sell you fear at every turn, do we believe it though? Banks as a tumour, the JP Morgan guy has a tumour in his throat now doesn`t he?

[19 year mortgage 8itch]

Go into renting thinking things will turn out for the worst?

Quotes from family after renting for 8 years now.....

"When are you going to buy?"

"You are throwing money away"

"Do you not want to settle?"

"When are you haing kids?"

Yes, renting seems to be the unstable state of mind.

That's nothing to do with actual experience of renting.

[StainlessSteelCat]

That's nothing to do with actual experience of renting.

Quite. I grew up in rented accommodation so I never experienced this background chatter from relatives prior or during renting. My parents, who have been in social rented accommodation most of their lives now, are terribly naive about the private sector i.e. they basically believe it's the same security of tenure, stable prices, quality of housing etc.

[Sandwiches33]

Maldives is definitely on the bucket list.

I honestly can't believe how weird things have got. Everything is expensive. Go for a dinner and night out - 100 pounds minimum. That is a good chuck of people's take home these days. Car servicing, mobile phones.

Another anecdotal...... I had a new boss last year. They had been moved into a new position in the company. Had worked for the same company for 30 years paying into a pension. In November my boss was diagnosed with leukemia. So, yeah, live life to the full. You never know you may have mortgaged yourself up the eyeballs for 25 years, and paid into a pension for 30, only for life to kick you in the balls.

This is spot on, I have relatives who work in cancer care. They tell me the cancers are at epidemic proportions. Everyone is giving out about ebola fear fear fear but the reality is there is a good chance cancer will get you anyway.

I have a guy in my work, same age as me with kids etc also, same age experience and such with lives on parallel. I just rent he is mortgaged up to the hilt. Every weekend he does nothing because he is broke, all his spare income going to pay for a banksters yacht. At the same time I have a lot of disposable income and I spend it all on experience, I try a lot of hobbies and do a lot of things with my kids, every weekend we are out and about. I can tell when me and the other guys talk of stuff we are doing he just stands with "sadface" you can tell he is heart broken and tired of life. Now I think there is nothing wrong with going without for a bit to buy something you want but to dedicate your life to it is madness. He looks so sad all the time and in the couple of years I have known him I think I have lived more than he has in the past 10.

I dont want to get get to the pearly gates and reflect on 25 years of paying a debt to fund someone elses lifestyle. its absolutely tragic and I suspect a big part of exploding mental health and depression issues too.