"Rent money is dead money"

neverdespairgirl

clobber wrote: »

FWIW I am fairly sure I would prefer you or ndg as neighbours, renters or no.

I'd like Sue as a neighbour too (-:

But much as I love her, she'd have to move here, I don't fancy rural Suffolk, too much of a journey to work!

chucky

StevieJ wrote: »

I only used 5% and 10% as examples of how other things can affect the equation
If interest rates have gone up to 10% then inflation will be on th rise. asset prices will almost certainly be increasing not decreasing.

stevie makes a good point that DD made a while ago that buying a property is not only related to the property price but also to numerous other factors which can determine the long term price paid for a property.

Paulgonnabedebtfree

Sally_Gee wrote: »

That is all.

Not necessarily. Depends on circumstances.

furndire

"You get help with your rent if you lose your job"

The problem with this is that you only get help with the "going rate" (which is not necessarily the amount that people are paying in the local area) for the rent in your area, how many people live in the house etc, and you have to top up the rent yourself which is then a drain on savings (if you are lucky enough to have any.

For example - in our local area, the rent for a three bed terrace is approx £100 per week. Rent paid for a single person even a single pensioner, is slightly under £70 per week. £30 to be made up from somewhere - or they don't find somewhere to live. Affordable houses to rent are still difficult to find - so you are not getting the choice of where you want to live

Ok, you supposedly get the first 3 months (?) made up, while you look for a job, but there are less jobs, so its only prolonging the time you have to make up the money,

sympatex

LydiaJ wrote: »

Money spent buying a depreciating asset is dead money.

I didn't get too far in the thread but this quote caught my eye.

The usual argument is that renting is dead money, renters will come back and say "compare the interest paid on your mortgage compared to the rent money".

In a falling market makes sense rent, you don't want to own a depreciating asset, the quote above.

In a rising market, providing the asset is appreciating faster than the difference between the interest in your mortgage itnerest and your rent, it is clearly better to buy.

The problem i have in my area, Camberley (south east 'greater metropolitan' according to land registry) is this;

Rent for a 3bed house is £200-215 p/w circa 875 a month. To buy interest is £650 on a mortgage on a mortgage of 5.5% but my gf and i have a mortgage at 2.99% and probably going to go to 1.99% shortly where mortgage interest will be perhaps £350 p/m. Right now it makes sense to buy providing houses don't crash too far..... i'm not brave enough fortunately i'm also helped out at the complete tat that's available within our mortgage requirements.

Renting makes no sense unless house prices fall a further 30%+ it might happen, what price "you're own home" sorry "your own debt".

SingleSue

neverdespairgirl wrote: »

I'd like Sue as a neighbour too (-:

But much as I love her, she'd have to move here, I don't fancy rural Suffolk, too much of a journey to work!

Ah now London, I love London and my plan was to move there on leaving school....then I met hubby.

Not sure it would be my ideal now though as I crave the sound of the sea from one direction and the looking at the fields in the other...both of best worlds really.

carolt

sympatex wrote: »

I didn't get too far in the thread but this quote caught my eye.

The usual argument is that renting is dead money, renters will come back and say "compare the interest paid on your mortgage compared to the rent money".

In a falling market makes sense rent, you don't want to own a depreciating asset, the quote above.

In a rising market, providing the asset is appreciating faster than the difference between the interest in your mortgage itnerest and your rent, it is clearly better to buy.

The problem i have in my area, Camberley (south east 'greater metropolitan' according to land registry) is this;

Rent for a 3bed house is £200-215 p/w circa 875 a month. To buy interest is £650 on a mortgage on a mortgage of 5.5% but my gf and i have a mortgage at 2.99% and probably going to go to 1.99% shortly where mortgage interest will be perhaps £350 p/m. Right now it makes sense to buy providing houses don't crash too far..... i'm not brave enough fortunately i'm also helped out at the complete tat that's available within our mortgage requirements.

Renting makes no sense unless house prices fall a further 30%+ it might happen, what price "you're own home" sorry "your own debt".

I take it your mortgage is on a long term fix? Or failing that you have read the runes and know interest rates are not going to shoot up any time within the 25 year average lifespan of your mortgage?

Basing your calculations for paying off long-term debt on short-term (historically low) interest rates is a recipe for disaster, IMO.

pickles110564

mr.broderick wrote: »

Not sure this is the right thread to mention this but after careful consideration i am a little peeved that only rugged toast nominated me for most respected member of the year.....

We were only allocated one vote and however much we love you it would have cost us 4 or 5 or 6 or 7 or 8 etc votes!;)

sympatex

carol, you're right and NE would prevent switching should value of the house continue to fall for a sustained period and fall faster than the rate you'd be paying it off at. the idea of a long term fix (i'm a ftb) is unappealing as my circumstances could change quickly and unforseably, i may get opportunities which are too good to turn down and get lumped with a house and mortgage i no longer want.
The cost of short term fixes is too high on fee's so a tracker right now is my best option.

Anyway i replied in response to the topic heading, renting in my area is quite expensive compared to the cost of a house. HOWEVER and the big one is while the house is falling in value (substantially?) renting is a safer option as it leaves more "outs".

neverdespairgirl

furndire wrote: »

"You get help with your rent if you lose your job"

The problem with this is that you only get help with the "going rate" (which is not necessarily the amount that people are paying in the local area) for the rent in your area,

In my neck of the woods, for some weird reason LHA is much more than normal market rents. And I mean an awful lot more.