Sunday, April 24, 2011

Never give a sucker an even break

Buy House Rather Than Rent And 'Save £100'

"House price falls and record low interest rates mean buying a property is almost £100 a month cheaper than renting one, according to new research".

Posted by alan @ 05:00 PM (1913 views)
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7 thoughts on “Never give a sucker an even break

  • More details:

    Halifax said purchasing a home was now 14% cheaper than if it was rented, a major change from 2008, when buying cost 43% more than renting.
    Homeowners now spend an average of £608 a month on mortgage payments and maintenance costs on a three-bedroom property, said the high street bank.
    But rent on a similar house would cost £706 a month, it added.
    It is now cheaper to buy a property than to rent one in 10 of the 12 regions of the UK, with people in London seeing the biggest savings, of £144 a month.

    I’ve just picked a random example off Rightmove: a two-bedroom flat in Hornsey, north London. The median purchase price in that area is £335,000. The median rental price is £300pw. That gives us a yield of 4.65%. Mortgages are indeed available around 4.65%, if you have a decent deposit (25%+).

    Of course buying a house looks a lot more risky today. Are house prices going to rise or fall? Are interest rates going up or down? Is your job secure or insecure? Has your employer increased or decreased the number of employees recently? Given that, will employers be awarding pay rises this year? If the company/organisation that you work for isn’t growing, what are your chances of promotion (and hence pay rise)? Have your other costs of living (fuel, food, bills) fallen or risen recently?

    Is now a good time to buy a house at present prices?

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  • mark wadsworth says:

    Drewster: “Is now a good time to buy a house at present prices?”

    That all depends on psychology. If enough of us go on a buyer’s strike, then prices will tumble of their own accord and it will become a self-fulfilling prophecy. Don’t forget: every person who buys a house is stabbing everybody else who would like to buy a house in the back.

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  • MW,

    I don’t really think that’s true. In recent months the FTBs have held back and refused to buy. The result? BTL landlords have swooped in. That’s the trouble with a strike, there’s always a scab.

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  • 2. mark wadsworth said…..’Don’t forget: every person who buys a house is stabbing everybody else who would like to buy a house in the back.’

    Correct mark, even if house prices continue to rise. Buying a house has morphed into a grotesque debt ponzi scheme, unforunately

    stabbing your defenseless neighbour in the back is the name of the game, because without them to stab one in effect has no knife.

    ~ Solution = Invest in a stab vest to avoid being pricked..

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  • MW,
    “every person who buys a house is stabbing everybody else who would like to buy a house in the back”.

    My mate moved with his job 2 months back. He bought one and sold one. I don’t think that’s a good reason for “sending someone to Coventry” .

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  • 4. alan,

    You changed the goal posts, so let’s send you to Rugby instead.

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  • mark wadsworth says:

    Drewster, that’s as maybe, but total sales figures have halved, there just aren’t enough “cash rich” potential BTL landlords out there to buy them all.

    Alan, your mate was neither a net seller nor net buyer, so fair play to him.

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