Saturday, April 10, 2010

Another nail in the demand coffin

Couples waste 5bn

Couples that want to be together but run two homes waste £5bn. Maybe so but its their money. I can only guess one day they will get together properly. When the cat dies, or when they grow up, or when they dare tell mum and dad they don't really want to get married, or whatever the reason. All fair enough - its a free country (sort of). But please don't tell me there's a "shortage" of housing.

Posted by chrisch @ 09:23 AM (1005 views)
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3 thoughts on “Another nail in the demand coffin

  • 3 problems:

    1st: It compares the RENT OR MORTGAGE payed by non-cohabiting couples to the MORTGAGE paid by cohabiting ones. IE the article isn’t comparing like with like. To show how much more expensive living apart is than cohabiting you would need to compare rent with rent and mortgage with mortgage.

    2nd: It compares “rent or morgage” of non-cohabitees with “typical FTB mortgage”. But what if the cohabitees are not living in “typical FTB” properties? What if they are predominantly renting, and (due to the bubble) renting far nicer properties than a “typical FTB” property? Again, not comparing like with like.

    3rd: The £4819 a year is not “squandered” or “wasted” as per the article. It is the price that the couple choose to pay for the easy ability to spend time apart in an unshared property. You might consider it a high price, but it is paying for an obvious and definite service; who is to declare they are “squandering it”?

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  • tenyearstogetmymoneyback says:

    A working link http://www.guardian.co.uk/money/2010/apr/10/long-term-couples-co-habit-costs

    To add to this. During the noughties I wasted about £100K by co-habiting. My biggest financial mistake
    was thinking that by saving £10K a year I would stay ahead of house price inflation. THe saving was easy
    but during that time the house I sold went up about £100K while the house I would have liked to have bought
    a share in went up £200K. In hindsight I should have let the house I had but back in 1999 that was a novel idea,
    plus I never wanted to see the neanderthal neighbours again.

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  • tenant super says:

    If a non-cohabiting couple have a child, the mother’s tax credits cancel out the cost of maintaining a separate home and in many cases (particularly if they bought before the boom) the tax credit value of living apart (because they are then assesed on her income only) give a substantial ‘profit’ even after the two home cost is accounted for. In our case, with one child and me going down to part time work, the financial gain of living apart (additional tax credits minus cost of his home) is over 6k per annum.

    Even though we don’t have children together and therefore have no tax credit entitlement, I would find it hard to put a price on the personal space which we enjoy by not shacking up together; also we are both able to live within cycling distance of our respective workplaces.

    I think the sociobiology of the human animal is more favourable to this living arrangement anyway!

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