"Rent money is dead money"

mr.broderick

carolt wrote: »

Tee hee.

No, not everywhere is, but my area is pretty typical. In most of the UK, it still costs more to rent than to buy. Currently house prices are falling, redressing that balance - but so are rental prices, meaning that it will take longer to reach that point.

I think, because you live in one of the few outposts of the UK where house prices continued rising past the peak, and where renting is relatively expensive, you tend to imagine that your exception is the rule rather than proves the rule.

I don't know anywhere down south where that applies, particularly for nice family houses. And it's rather a long commute from Aberdeen to here.

Don't forget that at the bottm of the last market ie mid 90's, rental costs in London (where I was renting at the time) were about double the costs of buying the same property. And they bumped along at about that level for several years - it wasn't as though everyone suddenly went - wow, so cheap, must buy now before they go up! - so I wouldn't expect that to happen now, either.

My point being that there's room for house prices to fall way below the point where mortgage interest costs = rental costs.

Have you ever actually bought a house carol? Or have you always been in rented?

There is a flaw in the highlighted, people would always pay a premium over the rental cost to actually buy the property. I sometimes wonder if it is going to be too late for you carol to actually jump on the properdee ladder xx Kisses from Mr.B.

POSSETTE

I dont care if my house has to be sold to get me in a nursinghome that, i will actually get to probably choose, because im paying for it,step children know how we both feel and accept it.My mum and dad will get the same treatment too, they have a bungalow approx 250k in value,and if that needs to be sold so they get a decent nursing home as opposed to one the council decide to chuck you in for free, then that is fine with me.
I have no right to expect inheritance,they earnt the money they use it to make themselves comfortable, too many greedy sons/daughters wanting the money instead..so i still think its better to buy for 25yrs than rent for 50+ yrs.

anguk

IveSeenTheLight wrote: »

Another major factor is that one is a burden on the tax payer, while the other is not. Harshly, but a bit similar to those that receive unemployment earnings and others that go out and work

That's true but then both she and my grandfather paid into the system all their working life, (my grandfather died before retirement age so never claimed any sort of benefit) so you could say that the state should look after her now she's older but that's a whole new arguement.

IveSeenTheLight wrote: »

Another difference is that nowadays, council homes are not similarly available to when your granparent went into rented accomodation. That oppertunity is severly limited nowadays

That's also true, there is a definate lack of council homes now. My grandmother has always privately rented, she's lived in the same house since the day she was married over 60 years ago, so she's a very secure tenant. If her house gets sold she gets sold with it!

Pobby

I have no idea about carolts finances. I have no idea where house prices will end up. What I do know is the property I am, purchased in 1998 would cost far more in rent now than a mortgage even assuming a 10% deposit. Imho that`s pretty obvious when between 1998 (I did buy rather cheaply) and 2007 the valuation was way more than a 300% price increase.
With low wage inflation that rise is all part of the economics of the mad house that we all have had to put up with under ZanuLabour.

cupid_s

But it’s not a straight choice between buying a home over 25 years or renting for 50+. The people on here who are saying don’t buy aren’t all saying ‘don’t ever buy’, more ‘wait and buy at a more sensible time with a bigger deposit’.

I want to move to a larger house in 2010. If we had never bought my current house (which we did in 2004) and had been renting privately instead by the end of 2010 we would have had 118k saved. As it happens we will have quite a bit less if we sell my house at the end of 2010 because the house has dropped in value and will probably drop further. There will be estate agents fees, solicitors fees from when we sell (plus those from when we bought), HIP costs, and we have had all the repair costs for 6 years none of which we’d have had if we’d not bought. Plus we’d be in a much better position as first time buyers with about 115k deposit.

carolt

Pobby wrote: »

I have no idea about carolts finances. I have no idea where house prices will end up. What I do know is the property I am, purchased in 1998 would cost far more in rent now than a mortgage even assuming a 10% deposit. Imho that`s pretty obvious when between 1998 (I did buy rather cheaply) and 2007 the valuation was way more than a 300% price increase.
With low wage inflation that rise is all part of the economics of the mad house that we all have had to put up with under ZanuLabour.

My finances are pretty typical, which is why I think the strength of my posts here is not any specialist knowledge I may have - I have absolutely none - but my situation as a bellweather for the housing market as a whole.

Our income is approx double the UK national average, and we are looking to buy somewhere approx 1.5 times the UK average.

Therefore, if we find it unaffordable, then for the average it is clearly unaffordable.

My example simply goes to show, as Pobby points out, what a lunatic state house prices had reached in 2007, and how far, realistically, they need to fall.

16% per annum, as agreed by both the main indices, is a nice start - another year or 2 of that and house prices should be affordable comfortably by me. But may still fall further, as they will still be above historic averages.

When will I buy?

I'll be sure to let you all know when I do.

carolt

cupid_s wrote: »

But it’s not a straight choice between buying a home over 25 years or renting for 50+. The people on here who are saying don’t buy aren’t all saying ‘don’t ever buy’, more ‘wait and buy at a more sensible time with a bigger deposit’.

A great point, well made.

Can't be said enough. I, for one, am not against buying a house. I don't actually know of a single poster on here who'd advocate renting for all time versus buying at some point. But the key is 'at some point'. Buying at the top of the market is blatantly stupid, whatever you're buying - even more so as it's something you usually do with borrowed money, so have to factor in all the extra costs of paying back the debt too.

No - buying a house is a great idea, but at an easily affordable price. Which just means now is (probably) not the best time for most non-owners at present.

chucky

carolt wrote: »

A great point, well made.

Can't be said enough. I, for one, am not against buying a house. I don't actually know of a single poster on here who'd advocate renting for all time versus buying at some point. But the key is 'at some point'. Buying at the top of the market is blatantly stupid, whatever you're buying - even more so as it's something you usually do with borrowed money, so have to factor in all the extra costs of paying back the debt too.

No - buying a house is a great idea, but at an easily affordable price. Which just means now is (probably) not the best time for most non-owners at present.

agreed - even buying at the top of the market can not only be affordable and at a good price. it's just buying well.

you can even buy over priced property in a flat market - less likely of course

carolt

Agreed - it can happen. Though unlikely.

Hence all the deliberate hedgings in my post.

Mandark

Why have so many people here responded to what was clearly a troll post?! Oh well...