Answer To 'should I Buy Now Or Rent' Questions

[Bruce Banner]

Fine - what do you do when the interest rates go up.?

It's harder to actually get these deals when you apply for them.

Link appears dead by the way

Probably only available to mortgage brokers with a special log-on .

[Lepista]

And what percentage of the population buys two £500k+ houses in the space of 6 years?

Two average houses would have been about £3,500 total, or less that £50 per month, not quite the same thing unless of course you added an extra '0' by mistake.

Still waiting for a demonstrable case where someone is better off buying *now* rather than renting *now*....

[Mayalabeille]

If you are basing everything on short term monthly payments

What about that they have used a lump sum of £105k for the 50% deposit? Which at say 4% would earn £4,200 so £3,360 after 20% tax which is £280 a month. The gap on your £775-£481 is £294

The article was not: are you better off buying a property or leaving your money in the bank and get interest on it. But it was about buying cheaper than renting.

I see your point and your comment is valid, my point was just that there are a lot of differences between buying as a FTB or with a large deposit and that this article did not take those differences into account.

[Bytesize]

It’s my first post on this, and it’s very apt for me, and I feel I have a little value to add.

I am a TTSBHTR, that’s a tried to sell, but had to rent, as I had to move areas, so I am currently renting out a 2 bed barn conversion in Somerset for £1000 and renting out my 2 bed Bungalow for £1000 in Surrey. Mortgage is IO on £193500 and costs just a little over £300 on a tracker, the house was valued, a month back, at £325k. Repayment is the rest of the rent going into an overpayment pot. Company is paying the rent.

I was a little dismayed at the costs of rental over here (in Somerset), but wanted something nice to live in, as I am likely to be here a while. However, £900 per month gets you a 4 bed link house.

I think there’s too much going on, to be able to properly compare the two, but outwardly, it would appear, in my opinion, slightly in the favour of owning if we baseline as of today, but that all falls apart if prices start dropping further and IR’s start to rise. I actually think it’s finely balanced, as of today.

I used to be a bull, but recently turned, selling one of my other properties for £340k (from £275k in 2006). I am starting to feel nauseous about holding onto the property, I must admit. However, we have signed up long term tenants and I have advised SHMBO to look at this as a long game for our daughters (whom we intend on giving the house to in 10-15 years time now).

Not being able to sell scared me a little, but if we can get something out of it in 15 years time, then I guess our £60k in it will be worthwhile. If I had sold the house, I’d be looking at renting for the foreseeable future and think it is going to end up being the best bet, in the mid term.

But yes, slightly concerned. IR’s back to 5 and my £1k each month just about clears the mortgage and, for me, that’s the elephant in the corner of the room in this argument….

On a final note, I really would like to see the house for £350k renting out for less than 900 odd. 800 gets you 2 beds and no garden out in leafy surrey

[Dr Renter]

Fine - what do you do when the interest rates go up.?

It's harder to actually get these deals when you apply for them.

Link appears dead by the way

Sorry about the link, it won't link because i put a search into it.

I personally can't see interest rates going above 2% for the next 5 years, but if you are of a nervous disposition you can fix for 2 years at 3.49%..... £600pcm for a £150k house.

[Dr Renter]

On a final note, I really would like to see the house for £350k renting out for less than 900 odd. 800 gets you 2 beds and no garden out in leafy surrey

Welcome.

Yes Somerset is expensive to rent, one of the reasons we ended up buying last year.

As for Bruce's £900pcm rent claim, as he says you can believe him or not, I know which I'm doing.

[Bruce Banner]

Welcome.

Yes Somerset is expensive to rent, one of the reasons we ended up buying last year.

As for Bruce's £900pcm rent claim, as he says you can believe him or not, I know which I'm doing.

Actually, I said less than £933 per month

I'll tell you what, so there can be no doubt, why not put your money where your mouth is?

let's both deposit £10K, or £100K if you like, with an mutually acceptable third party and I will divulge my full details to that party. If my figures differ from what I have stated on this thread, you take the pot, but I warn you, you would lose.

[assetrichcashpoor]

Welcome.

Yes Somerset is expensive to rent, one of the reasons we ended up buying last year.

As for Bruce's £900pcm rent claim, as he says you can believe him or not, I know which I'm doing.

On the price to rent theme, I live in a large house that was converted to flats. The rent on our flat is £725 a month whereas the rent on a different flat in the building is £1100. That flat is decorated to a higher standard but not £375 a month better. Other flats in our street are £900+ a month. We're in an unusual position in that we pay a lot less than many others for a similar flat, and that is down to luck I would say.

For us it's a lot cheaper to rent than to buy our flat, but for the £1100 a month flat the distinction isn't so clear.

[Lepista]

Actually, I said less than £933 per month

I'll tell you what, so there can be no doubt, why not put you money where your mouth is?

let's both deposit £10K, or £100K if you like, with an mutually acceptable third party and I will divulge my full details to that party. If my figures differ from what I have stated on this thread, you take the pot, but I warn you, you would lose.

BB that is so unfair.

You're actually wanting him to put his money where his mouth is.

Anyway, he won't - remember, you are the exception, not the rule.

Never mind that I too have a (significantly) sub-£933 rental on a >£300k plus house.

[bb7t6]

let's both deposit £10K, or £100K if you like, with an mutually acceptable third party and I will divulge my full details to that party. If my figures differ from what I have stated on this thread, you take the pot, but I warn you, you would lose.

Proving your rent payment would be easy, how are you proposing to prove to market value of your house?

[Dr Renter]

Probably only available to mortgage brokers with a special log-on .

Wow, you're really having an intuition malfunction today.

[Bloo Loo]

BB that is so unfair.

You're actually wanting him to put his money where his mouth is.

Anyway, he won't - remember, you are the exception, not the rule.

Never mind that I too have a (significantly) sub-£933 rental on a >£300k plus house.

me too.

[Dr Renter]

Proving your rent payment would be easy, how are you proposing to prove to market value of your house?

He's going to sell it, oh wait he can't, it's not his house.

How about this, he has to buy the house and the market value is what he's willing to pay for it. I'm seriously doubting it would be £350,000

[Bruce Banner]

He's going to sell it, oh wait he can't, it's not his house.

How about this, he has to buy the house and the market value is what he's willing to pay for it. I'm seriously doubting it would be £350,000

I wouldn't pay £350K for it, perhaps £220K in a few years time, but the fact remains that similar houses, in the same development, are on Rightmove now for between £340K and £400K.

[Dr Renter]

me too.

32,685 posts, 65,370 words???

[Bloo Loo]

32,685 posts, 65,370 words???

talk cheap

[Bytesize]

Actually, I said less than £933 per month

I'll tell you what, so there can be no doubt, why not put your money where your mouth is?

let's both deposit £10K, or £100K if you like, with an mutually acceptable third party and I will divulge my full details to that party. If my figures differ from what I have stated on this thread, you take the pot, but I warn you, you would lose.

I wouldn't want to be mischievious so early on here, but surely it's only got to drop 0.00001% off £350k for me to win the 10k? If, as predicted, the jouses prices do drop by the time he gets an independent valuation, would that not be taking candy from a baby?

I am just stating, as I am from the South East, with a house of less value, renting out for more money, that I find it hard to believe, not that he is lying.

I am surprised how quickly this as raised an issue, I am just comparing what I know, with what has been typed. I don't know the area, circumstances, etc, but I am, and have, just stated that it would surprise me.

So, where do I lodge the 10k and can I pick an EA?

[Number79]

BB that is so unfair.

You're actually wanting him to put his money where his mouth is.

Anyway, he won't - remember, you are the exception, not the rule.

Never mind that I too have a (significantly) sub-£933 rental on a >£300k plus house.

lucky for you 2.

Mine is £1100 (and rising soon) on something that would probably market for £280k. I suspect that my rent is somewhere closer to the norm than the exception.

[Dr Renter]

talk cheap

Touche

[Bytesize]

I wouldn't pay £350K for it, perhaps £220K in a few years time, but the fact remains that similar houses, in the same development, are on Rightmove now for between £340K and £400K.

OK, can you link to one of these houses? And with such a spread, would you not entertain yours might be on at the lower end of that valuation, or even lower?

If so, I am spartacus, where is my £10k?

Joking aside, when I got the estate agent in, he told me, in no uncertain terms, that things were quiet, that the house would sit on the shelf, possibly for a while, even if I lowered the price, but that he could rent it the following week for a £1k, more if I gave him 4-6 weeks. Things were going very quickly and the demand was for rental properties.

So I chose the less greedy option. Hence my surprise at your statement.

[Bruce Banner]

They're all coming out of the woodwork today .

[Dr Renter]

They're all coming out of the woodwork today .

And what are the voices saying? Did you forget to take your clozapine?

[Bytesize]

They're all coming out of the woodwork today .

Who are Bruce? Seems a touch paranoid given the fact I am a committed bear and am nervous about home ownership. Or, could it be that as I question you, I must be wrong?

And I have just come out of the woodwork?

I have been watching this forum for a while, given my position, and find it odd that immediately you’ve got defensive, could even be aggresive, over a comment based on facts?

Very odd behaviour.

I have smply said I find it odd, given the information, which can be proven, I have added, I am not looking for an argument, or to disagree for the sake of it; I am just adding anecdotal evidence.

[Bruce Banner]

Who are Bruce? Seems a touch paranoid given the fact I am a committed bear and am nervous about home ownership. Or, could it be that as I question you, I must be wrong?

And I have just come out of the woodwork?

I have been watching this forum for a while, given my position, and find it odd that immediately you’ve got defensive, could even be aggresive, over a comment based on facts?

Very odd behaviour.

I have smply said I find it odd, given the information, which can be proven, I have added, I am not looking for an argument, or to disagree for the sake of it; I am just adding anecdotal evidence.

It was a general observation, but if the cap fits.......

[roadtoruin]

BB that is so unfair.

You're actually wanting him to put his money where his mouth is.

Anyway, he won't - remember, you are the exception, not the rule.

Never mind that I too have a (significantly) sub-£933 rental on a >£300k plus house.

I think renting cheaper than buying is almost always the case on higher-priced houses, so I'm not surprised at Bruces case. However the case is much more difficult at the average house price in the South, say 200K for 2/3 bed.

I moved in October last year (largely neighbour problems but thats another story) and had 230K equity balance out of my house. I was moving to a slightly cheaper area, but it was still going to cost me minimum 210K. I seriously considered STR as I thought the market would be dropping, but a combination of wife and cost calculation in the end stopped me. I'm paying 40% tax, though that's not the killer - I could only find investment for STR lump around 3%, but say I got 4%. On 210K that's £8400 pa. That doesn't pay the rent in my area (at least 750pm) even before tax. OK you have to figure in transaction costs and what flexibility to move etc and maintenance - but in cash terms buying was cheaper. If I was talking about a 400K house the case would be completely different, cost to buy almost doubles, but the rent only goes up about 25%. Rental yield reduces as purchase price increases this is the key to the whole renting vs buying issue, and why BTLers always go for small houses within the range of normal people.