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Coping With The Housing Crisis : How Are You All Dealing With The Hand You've Been Dealt?

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Hello!

Some interesting reading on the

"Does Hard Work, Constant Education And Very Good Wages Actually Count For Anything These Days?"

thread,

the most interesting part for me is seeing how the smart people here are dealing with the mess we've all been forced into by circumstances out of our control.

When the choice is staggering debt and the required work hell for just some security in housing versus renting and coping with the situation in a more imaginative way, thats no choice at all, when you have the imagination.

I'd like this to be a thread for people to tell everyone about how they've chosen to deal with this crisis. It might inspire us to adopt one anothers strategies.

For my part, I haven't bought a place to live, I was born too late to do that without ruining my life with debt, immobility and likely negative equity to come. So I rent. Because I rent I am mobile, and because I am mobile I can work freelance all over the country, which is what I have done. I work with computers doing a mixture of this and that, and would make 300-400 a day when on a job. The work would last from a few months to a year and in all locations so mobility was important. These days I've caught the tech start up bug and am self funding the development of a software product with my freelancing savings. Its early days, its in front of some customers who like it and I get some revenue from it. To extend my "runway" to get this off the ground I've been able to reduce my living costs by renting more cheaply, an option not available to a "mortgage slave". My hope is to ramp that income up, which will be mostly passive income when Im finished, and potentially expand further or go back to freelancing while I keep that revenue stream. My end goal is to sell the company or let that revenue stream accumulate into a decent savings pile and buy a house without a mortgage.

We can all moan about the crisis and how unfair it is, and it is horrifying how long it has been allowed to continue and the damage it has caused so many lives. But in the end we can only control what we do in response, and make the best of a bad situation.

Thats how the crisis has affected my life and how I am handling it. How are you coping?

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Teaching in a boarding school, largely because it avoids the problems of renting or buying. Really nice accommodation free of charge, no council tax, fixed water and utility charges. Unusual hours and work on Saturdays and some Sunday's, but quite spread out and 20 weeks of holiday per year. Meanwhile, try to save quite a bit, but not at the cost of enjoying myself (flying - quite an expensive hobby), and slowly stock up on gold, coins, and tinned food in case TSHTF.

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I live and work in Kuwait. My employeer provides a two bedroom flat. My utility bills are negligible, I think I paid 12GBP last year for gas. Electricity and water are free. Tax rates are all zero out here. Petrol costs about 14p per liter, no car insurance (unless you specifically want it), and the annual 'MOT equivalent' is around 200GBP. If all four wheels are attached to the car you pass basically.

It get's better. On my tax return I can nominate my residency as being the UK. Due to a double taxation treaty, I don't have to pay tax on my Kuwaiti income. I can also have an ISA because I am technically resident in the UK for taxation purposes. This isn't fraud, I can nominate my residency as the UK.

Forgive the lack of a pound symbol, I am using an arabic keyboard.

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Saving what what we can as a family, not taking on any debt, running old cars etc, being frugal, hoping to buy a house one day to get out of renting, but working in a good job for a great company so reluctant to move around, waiting for a crash and running out of patience!

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10+ years into it I've concluded that the "Age of Uncertainty" is with us for the forseeable future. I can't guarantee my job will still be there in a year's time; I can't predict my income more than a year in advance; I have no idea where investments are going to go (they're all bubbles); and I'm locked out of owning a decent property. In these circumstances it makes absolutely no sense to tie myself down to a house and hope my job will last as long as I need to pay a mortgage.

So I've made myself as flexible as possible: I rent so that I'm mobile (notwithstanding the constraints of AST fixed periods); my money is in investments that aren't just gambles and I can access and move quickly (notwithstanding a massive systemic crash that wipes me out); I've decluttered "stuff" and now only own what I really want/need (and make sure that is good quality); I'm investing in my education (about to finish second degree); and I'm slowly transitioning to doing my job more on a freelance rather than salaried basis. And I'm putting all of my current efforts into maximising my quality of life - so last year I argued, and finally won, a working-from-home arrangement that means I'm on the South Coast with the sea and great walking country within minutes of where I live. Which I hope to take advantage of once the damn Sun comes out again!

Fixed-location long-term living can wait until I retire. And even then I wonder if I might instead just have several years of a nomadic, travelling-the-world life?

Admittedly I don't have a family, so I can do all this relatively easily. I don't know how people with families cope, where the pressure for stability is much more.

Edited by RentingForever

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I'm a long term renter in london. I could move out and cut back some what on housing costs but I know my LL and he is kind of fair, so I pay under market rent. I would have to move some distance to get the some sort of flat. Of course that would mean long traveling times to work which at the moment are very short.

Longer term. I'm saving and investing (always learning). I do have some gold coins in case of TSHTF. I may chnage jobs in a couple of years so that will the time to possible move or even leave the country. I have nothing set in stone.

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I'm continuing to rent until house prices return to what I consider to be sensible levels (relative to average incomes). I'm a very patient man. I know that true affordability will return, it's just a question of when. For my full rationale, see my recent post at http://www.housepricecrash.co.uk/forum/index.php?/topic/208145-20000-postsheres-what-i-have-seen/?p=1102871665.

It might take another 15 years for house prices to get real. I'm good for it. The longer the better for me, because it gives me longer to save up. I don't want a mortgage. I've done the sums, and the overall cost of paying a mortgage for 25+ years compared to buying a house with cash is eye-watering. Even taking into account the "dead money" lost through renting for a long time, buying without a mortgage is much cheaper overall.

I love having conversations with home owners who are convinced that renting is nothing but dead money, and that getting a mortgage no matter the cost is better. When I actually go over the figures with them over a 25-year projection, they go quiet all of a sudden. And that's assuming pretty low mortgage rates for the next 20 years. I also prefer to refer to home "owners" as "home borrowers", because they don't actually own the house until they've fully paid off the entire mortgage.

But it's all cool. Everyone's different. I just have a pathological objection to debt.

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Own house outright (no mortgage) - product of years of hard work and some luck.

Only one house - the right size for family of three plus dog.

Savings in a balanced passive portfolio biased towards oversea markets.

2 years living expenses in National Savings account.

Try to live on same family income as 10 years ago - all pay rises and bonuses seaved - every £50 is one day closer to retirement

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Renting an inadequate 1 bedroom flat. Finding it hard to save up. Current ISA only paying about 1% interest AER so in 2016 the only other option I can come up is looking at the investment side of things.

It might take another 15 years for house prices to get real. I'm good for it. The longer the better for me, because it gives me longer to save up. I don't want a mortgage. I've done the sums, and the overall cost of paying a mortgage for 25+ years compared to buying a house with cash is eye-watering.

I'm of the same opinion. Really don't want a 'ball and chain' mortgage anymore like most of my friends have. And their homes, while they are nicer than mine, are fairly adequate for the £ they paid.

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I'm continuing to rent until house prices return to what I consider to be sensible levels (relative to average incomes). I'm a very patient man. I know that true affordability will return, it's just a question of when. For my full rationale, see my recent post at http://www.housepricecrash.co.uk/forum/index.php?/topic/208145-20000-postsheres-what-i-have-seen/?p=1102871665.

It might take another 15 years for house prices to get real. I'm good for it. The longer the better for me, because it gives me longer to save up. I don't want a mortgage. I've done the sums, and the overall cost of paying a mortgage for 25+ years compared to buying a house with cash is eye-watering. Even taking into account the "dead money" lost through renting for a long time, buying without a mortgage is much cheaper overall.

I love having conversations with home owners who are convinced that renting is nothing but dead money, and that getting a mortgage no matter the cost is better. When I actually go over the figures with them over a 25-year projection, they go quiet all of a sudden. And that's assuming pretty low mortgage rates for the next 20 years. I also prefer to refer to home "owners" as "home borrowers", because they don't actually own the house until they've fully paid off the entire mortgage.

But it's all cool. Everyone's different. I just have a pathological objection to debt.

Can you post a bit more detail. In the sums I have done it really depends on your view of interest rates and where the hell you are living!

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Renting an inadequate 1 bedroom flat. Finding it hard to save up. Current ISA only paying about 1% interest AER so in 2016 the only other option I can come up is looking at the investment side of things.

I'm of the same opinion. Really don't want a 'ball and chain' mortgage anymore like most of my friends have. And their homes, while they are nicer than mine, are fairly adequate for the £ they paid.

You can get better than that! Move it!

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You can get better than that! Move it!

Not much better from what I have found in the past. But I will look into it. It needs to be in an instant access account rather than a bond account.

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Not much better from what I have found in the past. But I will look into it. It needs to be in an instant access account rather than a bond account.

Halifax htb isa for instance. Also a Santander 123 current account

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Can you post a bit more detail. In the sums I have done it really depends on your view of interest rates and where the hell you are living!

There are a number of variables. The biggest factor is of course the length of time it would take you to gather enough cash, as this would determine how long you need to spend renting. Location of course is also a big factor. My comment isn't applicable to London unless you're able to secure a big windfall of cash e.g. inheritance. There are too many permutations to list here, but in a nutshell, if you're able to keep your renting costs as low as is practicable and earn enough to be able to save enough cash to buy outright in 10-15 years at the same time as renting, and assuming a mortgage rate of at least 4% for an average 25 year mortgage, then it works out considerably cheaper to rent for that period and buy a property outright with cash.

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Drinking a lot, and running a lot. Seems to work, for now at least.

Wouldn't say 'dealing' so much as 'ignoring, so far as is possible'.

Just has a lovely couple move in next door, the washing machine (house advertised as included) just leaked hugely at the first attempt, LL uninterested. 'Nice guy'. ******ing scum.

Edited by The Knimbies who say No

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I've made a virtue of necessity and used the flexibility of renting to move around the country; this has given me greater breadth of experience than my peers. I'm at a point in my career where that advantage will begin to become a disadvantage with regard to promotion (not staying in one place for years means that I'm 'not one of us') but my track record of being willing to relocate to further my professional education has helped to secure me a promotable job in Sydney!

Edited by Will!

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I've made a virtue of necessity and used the flexibility of renting

I think its a good response to the crisis. Face up to the fact that we cannot live today how people lived yesterday, and make positive moves from that perspective.

The rest of europe is fine with renting, it will only take legislative changes for us to be like them and I assume those are in the pipeline with so many voters now forced into renting for life.

Indeed it is actually those that lack ambition and imagination who long for a lifestyle as pedestrian as living to pay a mortgage allows. Some of them are proud of it !?

These are interesting responses from interesting people! You only live once, I feel sorry for the mortgagers following their life script. How dull !

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I'm continuing to rent until house prices return to what I consider to be sensible levels (relative to average incomes). I'm a very patient man. I know that true affordability will return, it's just a question of when. For my full rationale, see my recent post at http://www.housepricecrash.co.uk/forum/index.php?/topic/208145-20000-postsheres-what-i-have-seen/?p=1102871665.

It might take another 15 years for house prices to get real. I'm good for it. The longer the better for me, because it gives me longer to save up. I don't want a mortgage. I've done the sums, and the overall cost of paying a mortgage for 25+ years compared to buying a house with cash is eye-watering. Even taking into account the "dead money" lost through renting for a long time, buying without a mortgage is much cheaper overall.

I love having conversations with home owners who are convinced that renting is nothing but dead money, and that getting a mortgage no matter the cost is better. When I actually go over the figures with them over a 25-year projection, they go quiet all of a sudden. And that's assuming pretty low mortgage rates for the next 20 years. I also prefer to refer to home "owners" as "home borrowers", because they don't actually own the house until they've fully paid off the entire mortgage.

But it's all cool. Everyone's different. I just have a pathological objection to debt.

That depends on price rises/falls etc. It didn't use to be true but of course it could have changed.

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That depends on price rises/falls etc. It didn't use to be true but of course it could have changed.

Very true. There are a number of variables in the calculation as to which is cheaper: rent or buy over a 25 to 30 year period. Unfortunately for many people, a mortgage is the only option if they ever want to buy, because they just don't earn enough to save significant amounts of money at the same time as paying rent. I fully appreciate that fact. But I would encourage everyone to at least do the sums before committing to a mortgage. Sometimes it's surprising how sensible savings and/or investments can build over time due to the miracle of compound interest. Of course, with interest rates currently so low, there's not a huge amount of interest available on savings. But this will average out over a 25 year period. Rates won't stay low forever. Although admittedly it certainly feels that way right now!

But I'm confident in 2 maxims that history has taught us. 1) No asset class goes up in price forever, not even UK property. 2) In a capitalist market, nothing can be manipulated forever, not even UK interest rates.

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Moving to the US in July. Prices in some cities (NY and DC probably) are pretty high, but nothing compared to London. We're going to Seattle (where my wife is from), and where prices are just about bearable for now. Tried and failed to find somewhere here last year but have given up.

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I'm continuing to rent until house prices return to what I consider to be sensible levels (relative to average incomes). I'm a very patient man. I know that true affordability will return, it's just a question of when. For my full rationale, see my recent post at http://www.housepricecrash.co.uk/forum/index.php?/topic/208145-20000-postsheres-what-i-have-seen/?p=1102871665.

It might take another 15 years for house prices to get real. I'm good for it. The longer the better for me, because it gives me longer to save up. I don't want a mortgage. I've done the sums, and the overall cost of paying a mortgage for 25+ years compared to buying a house with cash is eye-watering. Even taking into account the "dead money" lost through renting for a long time, buying without a mortgage is much cheaper overall.

I love having conversations with home owners who are convinced that renting is nothing but dead money, and that getting a mortgage no matter the cost is better. When I actually go over the figures with them over a 25-year projection, they go quiet all of a sudden. And that's assuming pretty low mortgage rates for the next 20 years. I also prefer to refer to home "owners" as "home borrowers", because they don't actually own the house until they've fully paid off the entire mortgage.

But it's all cool. Everyone's different. I just have a pathological objection to debt.

This is true. I've done my own set of sums (chucked into Excel 5% HPI forever in my chosen area and today's interest rates) with a set personal savings rate every month. There's a cross over point where the cash balance surpasses the price of a house, then it starts to accelerate away from it. I wish I'd taken an hour to work this out sooner than the last few years. Everyone's earnings, saving power and expectations will be different of course. I'm far from cool with prices at the moment but very cool with the numbers.

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This is true. I've done my own set of sums (chucked into Excel 5% HPI forever in my chosen area and today's interest rates) with a set personal savings rate every month. There's a cross over point where the cash balance surpasses the price of a house, then it starts to accelerate away from it. I wish I'd taken an hour to work this out sooner than the last few years. Everyone's earnings, saving power and expectations will be different of course. I'm far from cool with prices at the moment but very cool with the numbers.

If you were to put away the amount you would pay on a mortgage every month I would imagine this to be so! However are you taking into account that you have to pay rent? As generally the monthly cost of rent is similar to a mortgage.

My rent/buy calculations always come out well ahead for buying but that's because I can only save a tiny amount after rent and bills. Whereas if that rent went towards a mortgage, at the end I've got an asset.

Edited by streamingfreedom

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