Answer To 'should I Buy Now Or Rent' Questions

[Grove]

I got married a few years back and my wife and I started looking to buy our first place around that time. It proved perfectly clear to me that I could get a lot more bang for my buck by renting vs buying. We have rented ever since but sometimes I have a niggling feeling that we are throwing money away. So out comes the calculator and I make sure I am doing the right thing.

I found a mortgage calculator in the following link which spelled it all out for me and I thought it would be useful to share. I input the data for our current house, which when we rented it was up for both sale and rent so I could see current asking price and rental value simultaneously.

It looks like I have been saving much more than I anticipated because I did not take into account the money I save by not paying high mortgage payments. The mortgage plus other fees in the first year came in at £45k, but the rent was only £12k. So I pocketed £33k in year one alone by renting vs buying. The trend continues over years 2-3.

And if you model even modest house price declines over the next few years I save an astronomical amount by renting. Enjoy...

http://www.whichwayhome.co.uk/q-a.html

[Disillusioned]

please note that i used the present progressive passive tense ,

the market is being forced to drop = there is an ongoing action to force the market to drop,

this doesn't necessarily mean that the market is dropping or will drop.

THAT'S THE WORST BACK-TRACKING I'VE SEEN YET! YOUR CAPACITY FOR DENIAL ASTOUNDS ME!

restricted lending standards concern especially the small deposit holders, the first time buyers,

if you have large deposits and guarantees you wouldn't be much affected,

(if int.rates get higher rents get increased, like it's already happening)

So what does your BTLer do after paying the deposit on the first few houses? No more deposit, so no more houses. Suddenly the portfolio is reduced dramatically.

Also, please explain the correlation between rents and interest rates.

[dontmakemelaugh]

Also, please explain the correlation between rents and interest rates.

average rent sore 6.5 % since the beginning of the year !!

it's a fact that when properties value is not doing fine rents get higher,

and viceversa,

don't know why... you seem to know everything why don't you tell me why ...

[Guest The_Oldie]

average rent sore 6.5 % since the beginning of the year !!

it's a fact that when properties value is not doing fine rents get higher,

and viceversa,

don't know why... you seem to know everything why don't you tell me why ...

My rent would have to sore [sic] by 100% to make it equal to the cost of the money that would be required to buy the house. In fact, it is the same as it was two years ago and is fixed for a further year. However, even if it were to sore [sic] 100%, I still wouldn't buy as I expect prices to fall by 40%ish.

[geoffk]

I would advise anyone thinking of buying to read this from the newstatesman first....

http://www.newstatesman.com/economy/2008/0...housing-british

[dontmakemelaugh]

My rent would have to sore [sic] by 100% to make it equal to the cost of the money that would be required to buy the house. In fact, it is the same as it was two years ago and is fixed for a further year. However, even if it were to sore [sic] 100%, I still wouldn't buy as I expect prices to fall by 40%ish.

---

i don't really get your calculations,

let's take a 3 bed flat in an area in SW london, zone 3,

cost now approx. 250k,

you put a deposit of 30k and get a mortgage of 220

at 5.89% it's 1079.83 pcm (int. only) !!!!

if i rent it it costs me £ 1400 pcm now !!!! ,

if i mortgage it with 1400 i well pay mortgage, bills, ecc,

if i rent it i need to add : gas, electricity, council tax, water ecc...

i'll end up with much less money , so i think it really depends where you live my friend,

there in Sw16 where i want to go as it stands right now

it's much better to buy,

why ? you can get 2006 prices and if it goes down in the next couple of years, so what?

it'll come back up from 2010...that's guaranteed,

if you think that this dip has the scale of the 90's crash you'll be disappointed,

you just need one thing:

the banks that start easing the mortgage market and this will happen sooner than you think.

this followed by some good headlines and people will think we touched bottom,

it won't take long before vendors will start receiving multiple offers and start raising prices,

my advice: you find a good property now, correctly priced, ask for a 10% discount

and go for it,

read read below!::

--

Renters worse off than ever

By Damian Clarkson, EveryInvestor.co.uk

June 05 2008

Tenants unable to afford that first step onto the property ladder have been rocked by news that rental costs may rise sharply in the next two years.

http://money.uk.msn.com/Mortgages/firsttim...umentid=8464550

[Bosh]

---

i don't really get your calculations,

let's take a 3 bed flat in an area in SW london, zone 3,

cost now approx. 250k,

you put a deposit of 30k and get a mortgage of 220

at 5.89% it's 1079.83 pcm (int. only) !!!!

if i rent it it costs me £ 1400 pcm now !!!! ,

if i mortgage it with 1400 i well pay mortgage, bills, ecc,

if i rent it i need to add : gas, electricity, council tax, water ecc...

i'll end up with much less money , so i think it really depends where you live my friend,

there in Sw16 where i want to go as it stands right now

it's much better to buy,

why ? you can get 2006 prices and if it goes down in the next couple of years, so what?

it'll come back up from 2010...that's guaranteed,

if you think that this dip has the scale of the 90's crash you'll be disappointed,

you just need one thing:

the banks that start easing the mortgage market and this will happen sooner than you think.

this followed by some good headlines and people will think we touched bottom,

it won't take long before vendors will start receiving multiple offers and start raising prices,

my advice: you find a good property now, correctly priced, ask for a 10% discount

and go for it,

read read below!::

--

Renters worse off than ever

By Damian Clarkson, EveryInvestor.co.uk

June 05 2008

Tenants unable to afford that first step onto the property ladder have been rocked by news that rental costs may rise sharply in the next two years.

http://money.uk.msn.com/Mortgages/firsttim...umentid=8464550

Hang on a bit of wee just come out stop it

[dontmakemelaugh]

Hang on a bit of wee just come out stop it

=

the usual reply of someone that doesn't know what to write.

[Bosh]

=

the usual reply of someone that doesn't know what to write.

Your name says it all

[Guest The_Oldie]

---

i don't really get your calculations........

Simple really. In round figures, I pay £10,000pa rent on a £400,000 house. If I were to draw £400,000 out of the bank and buy it, I would lose £20,000pa net interest, therefore, my rent would have to go up by 100% to £20,000pa before buying would be cheaper than renting. But, I expect house prices to drop by 40% over the next few years so the house will only be worth £240,000 and in the meantime, I'm £10,000pa in pocket by renting.

If, for argument's sake, it takes three years for prices to drop 40% and I then buy the house, I will have saved £190,000 (£30,000 difference between rent and interest received over three years and £160,000 depreciation). Not to mention any maintenance costs currently paid by my landlord. Rates and utility bills are the same whether renting or buying.

Thank you for your advice, but I shall not be taking it.

By the way, are you an estate agent or a mortgage broker?

[Bosh]

---

you can get 2006 prices and if it goes down in the next couple of years, so what?

it'll come back up from 2010...that's guaranteed,

if you think that this dip has the scale of the 90's crash you'll be disappointed,

you just need one thing:

the banks that start easing the mortgage market and this will happen sooner than you think.

this followed by some good headlines and people will think we touched bottom,

it won't take long before vendors will start receiving multiple offers and start raising prices,

my advice: you find a good property now, correctly priced, ask for a 10% discount

and go for it,

read read below!::

--

Renters worse off than ever

By Damian Clarkson, EveryInvestor.co.uk

June 05 2008

Tenants unable to afford that first step onto the property ladder have been rocked by news that rental costs may rise sharply in the next two years.

http://money.uk.msn.com/Mortgages/firsttim...umentid=8464550

Maybe I was being a bit petulant but FFS, you can guarantee price rises from 2010

You state it only needs one thing but you state two Banks easing the mortgage market? sooner than we think , followed by some good headlines will make it all go away

Nah, sorry I was right, you are one funny F;'ker

Maybe too much vino at your EA`s closing down shin dig ?

[Disillusioned]

average rent sore 6.5 % since the beginning of the year !!

it's a fact that when properties value is not doing fine rents get higher,

and viceversa,

don't know why... you seem to know everything why don't you tell me why ...

Show me the proof.

Tenants unable to afford that first step onto the property ladder have been rocked by news that rental costs may rise sharply in the next two years.

http://money.uk.msn.com/Mortgages/firsttim...umentid=8464550

This is not proof. Show me a graph or something that isn't based ENTIRELY on unresearched speculation.

Here is an article:

http://www.ft.com/cms/s/0/bf065c1c-12e4-11...00779fd2ac.html

...and here are some graphs for now:

from here. Do you see the falling averages? .... and...

http://www.housepricecrash.co.uk/forum/ind...ost&id=6424

which I made from here.

I await your evidence...

[dontmakemelaugh]

Simple really. In round figures, I pay £10,000pa rent on a £400,000 house.

Thank you for your advice, but I shall not be taking it.

By the way, are you an estate agent or a mortgage broker?

= average uk price is about £ 180k, so why you pick such an expensive house!!!

estate agents are evil bastards,

just like mortgage brokers,

bankers, speculators, property developers,

landlords, politicians, (and the list can go on)

i'm here online always connected just for a week or so (this is why i'm replying),

after this week i won't be here loosing my time replying to this forum, ...while you 'll still be here replying, eheh

this means only something to me .

YOU HAVE ECONOMICAL REASONS,

so to which of the above group you belong to??

...it seems there are always the same people...are you being paid by who??

[Guest The_Oldie]

= average uk price is about £ 180k, so why you pick such an expensive house!!!

estate agents are evil bastards,

just like mortgage brokers,

bankers, speculators, property developers,

landlords, politicians, (and the list can go on)

i'm here online always connected just for a week or so (this is why i'm replying),

after this week i won't be here loosing my time replying to this forum, ...while you 'll still be here replying, eheh

this means only something to me .

YOU HAVE ECONOMICAL REASONS,

so to which of the above group you belong to??

...it seems there are always the same people...are you being paid by who??

I used those figures because they are my real figures.

Yes, I do have economical reasons, I am retired and don't wish to blow £190,000 over the next few years.

[Bosh]

i'm here online always connected just for a week or so (this is why i'm replying),

after this week i won't be here loosing my time replying to this forum, ...while you 'll still be here replying, eheh

What the fu...... You are a Troll, you make no sense at all.

You should now be ignored

[Disillusioned]

i'm here online always connected just for a week or so (this is why i'm replying),

after this week i won't be here loosing my time replying to this forum, ...while you 'll still be here replying, eheh

How convenient... I'd better post this next chunk of explanation for you so that you can read it before you leave us for the last time. (Can't say I'm disappointed)

____________________________________

(if int.rates get higher rents get increased, like it's already happening)

Also, please explain the correlation between rents and interest rates.

average rent sore 6.5 % since the beginning of the year !!

You haven't explained the (alleged) correlation between rents and interest rates yet... do you understand what you're on about?

_____________________________________________

let's take a 3 bed flat in an area in SW london, zone 3,

cost now approx. 250k,

you put a deposit of 30k and get a mortgage of 220

at 5.89% it's 1079.83 pcm (int. only) !!!!

if i rent it it costs me £ 1400 pcm now !!!!

Let's see... SW16 you say...

£915.2 pcm

£925 pcm

£968 pcm

£1016.4 pcm

£1400? Tosh!

if i mortgage it with 1400 i well pay mortgage, bills, ecc,

if i rent it i need to add : gas, electricity, council tax, water ecc...

You need to add these bills when you buy OR rent. In fact, when renting you sonetimes don't have to pay these bills. For example, my heating is paid by the landlord.

you can get 2006 prices and if it goes down in the next couple of years, so what?

So What? You'll be in negative equity very soon after and then you'll be a bit stuffed with your IO mortgage and if you try to move.

_____________________________________________

it'll come back up from 2010...that's guaranteed,

if you think that this dip has the scale of the 90's crash you'll be disappointed,

you just need one thing:

the banks that start easing the mortgage market and this will happen sooner than you think.

this followed by some good headlines and people will think we touched bottom,

it won't take long before vendors will start receiving multiple offers and start raising prices,

You can say all this, with no facts to back it up but yet you say...

i'm sorry but you simply can't sum up the current market to a digit,

it's so so fragmented and localized,

...when we tell you the amount that prices are crashing? Hypocrite! :angry:

Edited June 6, 2008 by Disillusioned

[dontmakemelaugh]

How convenient... I'd better post this next chunk of explanation for you so that you can read it before you leave us for the last time. (Can't say I'm disappointed)

____________________________________

You haven't explained the (alleged) correlation between rents and interest rates yet... do you understand what you're on about?

_____________________________________________

Let's see... SW16 you say...

£915.2 pcm

£925 pcm

£968 pcm

£1016.4 pcm

£1400? Tosh!

_____________________________________________

average 3 bed flat in sw16 now is £ 1300/1400,

thanks for the links, i will ring up the agents to see if they are available or just

bogus for attracting people,

RIGHTMOVE SEARCHES IN SW16:

rightmove search = up to £ 1000 pcm only 6 properties

of which only 3 are furnished.

rightmove search = 1000-1250 pcm = 20 properties found

rightmove search = 1250-1500 pcm = 40 properties found

what's the AVERAGE, eh??

who's the hypocrite here ????!!!!!!

Edited June 6, 2008 by dontmakemelaugh

[Disillusioned]

average 3 bed flat in sw16 now is £ 1300/1400,

thanks for the links, i will ring up the agents to see if they are available or just

bogus for attracting people,

I refer you to my post with the graph, which shows rents are dropping.

RIGHTMOVE SEARCHES IN SW16:

rightmove search = up to £ 1000 pcm only 6 properties

of which only 3 are furnished.

rightmove search = 1000-1250 pcm = 20 properties found

rightmove search = 1250-1500 pcm = 40 properties found

what's the AVERAGE, eh??

The fact that there are cheaper properties (which look fine actually) shows that you're not getting the best value for your money.

who's the hypocrite here ????!!!!!!

You are, as explained above. See earlier post.

Edited June 6, 2008 by Disillusioned

[Disillusioned]

Rents fall by 9%, from ARLA no less!

http://www.housepricecrash.co.uk/forum/ind...c=78906&hl=

[Bosh]

Rents fall by 9%, from ARLA no less!

http://www.housepricecrash.co.uk/forum/ind...c=78906&hl=

D...

You are like a Staffordshire Bull Terrier sinking your teeth deep into Troll flesh, once you get a grip, you will not let go. I admire the effort you put into research.

Direct hits, Troll sunk....job done

Have a nice w/end

Bosh

[Conrad]

I currently rent a 2 bed flat overlooking the sea in bournemouth for 1000 per month.... The place was purchased for about 350,000 in 2004 now probably worth in the region of 450,000 +

Renting is worth it in my neck of the woods

[Paddles]

Disillusioned and Bosh, you're doing good work on here!

This thread really is like a big pot of honey for trolls, isn't it? Lovely to see such unadulterated fear and loathing from those exposed to the coming storm.

[Bosh]

Disillusioned and Bosh, you're doing good work on here!

This thread really is like a big pot of honey for trolls, isn't it? Lovely to see such unadulterated fear and loathing from those exposed to the coming storm.

Cheers Paddles

No breaches here.....

Carry on

[Whoslaughing?]

To all you "renters" out there ( me included). Unless this has already been said (if it has I do apologise) Do try to ascertain that the person you are renting from is paying their mortgage. I know it is a difficult one to ask a letting agent/individual but in the times ahead I believe it to be a very valid question. They check our financial credentials and ability to pay, I think somewhere along the line we also have some sort of similar right.

You don't want to come home from work and find the gentlemen bailiffs on your doorstep telling you to pack your bags.

[Bloo Loo]

To all you "renters" out there ( me included). Unless this has already been said (if it has I do apologise) Do try to ascertain that the person you are renting from is paying their mortgage. I know it is a difficult one to ask a letting agent/individual but in the times ahead I believe it to be a very valid question. They check our financial credentials and ability to pay, I think somewhere along the line we also have some sort of similar right.

You don't want to come home from work and find the gentlemen bailiffs on your doorstep telling you to pack your bags.

Thats very good advice. The AST is a two way contract, and you wanna be sure the landlord can fulfill his end of the bargain