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Stagnation


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FTbers are the ones borrowing 20 years' worth of future earnings to prop up the current madness, along with overstretched BTLers. I feel no psychological compulsion whatsoever to keep the pyramid going. Most FTBers buy now because of peer pressure and fear, no because of any rational decision.

I'd also like a car as well as a flat one day, but I'm not going to pay 3 times over the odds for that as well...

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FTbers are the ones borrowing 20 years' worth of future earnings to prop up the current madness, along with overstretched BTLers. I feel no psychological compulsion whatsoever to keep the pyramid going. Most FTBers buy now because of peer pressure and fear, no because of any rational decision.

I'd also like a car as well as a flat one day, but I'm not going to pay 3 times over the odds for that as well...

But thousands of people do pay three times over the odds for a car, just by virtue of buying brand new on finance, the one who doesn't appears to be the exception rather than the rule. Seems to be just the same with buying a house ...

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Actually, I was looking at Ferraris at the weekend, but couldn't quite justify spending 20+k on a car that's over ten years old and costs 2k a year to maintan... though 9k for a Mondial was kind of tempting. Certainly I can't imagine buying an F40, like an ex-co-worker recently did (he was around showing it off not long ago).... nice car, but 180k is a lot to spend for four wheels and an engine :).

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Some very good points.

But there is one overiding factor.

There is nothing like having the independence of owning your own home.

Something no stats or figures can detail, the feel good factor of home ownership and Britains love affair with Bricks and Mortar is something no amount of money can replace.

I don't think many would argue with that but whilst there is 'nothing like the independence of owning your own home' for many young people nowadays, owning their own home is simply a dream. There is a generation of 30 year olds in the South that are reconciled to renting rooms for the rest of their lives.

From another angle, I am feeling better and better about renting - as long as prices don't race away again (No chance in the next 5 years). I no longer spend a small fortune in B&Q on various projects, I have every weekend to myself and the money in the bank pays the rent and a lot more besides.

Only downside in the next few years is if Landlord decides to sell - he's owned for 17 years so, hopefully, not likely.

I'm dreading buying again - the idea of giving Gordon Brown 10 or 12k of my money in Stamp Duty leaves me cold.

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Only downside in the next few years is if Landlord decides to sell - he's owned for 17 years so, hopefully, not likely.

Same here... my only real worry about renting is that I'll have to move if my landlord sells the place, but they've also owned it for years so it seems unlikely. I'm hoping not to have to do that before my emigration visa turns up (or gets denied).

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In the South on a modest income the reality is that renting has become horrifically expensive, even with current falls, and owning even more so. So save money, you do have to go for the real dives where everything is fudged with pollyfilla, everywhere's carapeted with that brillo-pad stuff you see on the floor in primary schools with bits of plasticine in, the central heatin is negated by cold and draft. At least buying a place would allow you to use my DIY skills to patch the place up better than a rubbish landlord, make it home, invest some sweat.

Renting is just plain crap.

We've saved well to shadow the market, and we're some of those people that could buy - just. But it would mean a monthly committment completely foolish. Older friends who were earning significantly more than us at our stage of life did not choose to stretch themselves even half as far as we might contemplate.

Luckily we have structured our lives to be a savings machine, so even stagnation is good for us - we can making up ground lost to inflation. Any falls at all and that saving becomes even more powerful.

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2 points i'd make.

1st - People move house on average every 7 years.

So you should add the cost of selling, moving and stamp duty to any long term view of renting vrs buying.

2nd - There are disadvantages as well as advantages to house ownership

Being in negative equity even if you can afford your mortgage gives people sleepless nights. If circumstances change the fear of losing your house is terrible and much worse than the fear of not finding the rent and needing to move to a cheap rental property. Also if worse come to the worse the government will pay your rent but NOT pay your mortgage.

My guideline in a stagnant market is I keep renting whilst ever my rent is less than an IO mortgage +15%. The 15% figure comes from the maintainence I save. no building insurance = a few % of this but the rest is from the infrequent but high cost maintainence items. e.g. New windows, Kitchen, Bathroom, GCH and roofing/guttering.

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