We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Halifax down 0.5% MoM, 15% YoY
Comments
-
What's a p1key?
I note the site blanks it out when I try and write it properly, so I must assume you're being rude.
Rude, on top of being deceitful.
Still, I expect no more from landlords, or would-be-landlords.
I think P1key derives from Turnpike (toll road) and refers to travellers,tinkers.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
No, I'm not a traveller or tinker, sorry, I'm a teacher.
I don't 'give my money' to a landlord, I pay my rent.
The alternative would be 'giving my money' to a bank to pay for mortgage interest, which would currently cost more.
Obviously, it would be lovely to keep all that money and save it/spend it on fun frivolities, but then being homeless isn't really an option for me.
I must assume from your comments, bluey, that it is for you.
Did you have a good night under your hedge last night?
Bit wet, was it?0 -
No, I'm not a traveller or tinker, sorry, I'm a teacher.
I do hope you don't teach maths or economics. That would be tragic.I don't 'give my money' to a landlord, I pay my rent.
The alternative would be 'giving my money' to a bank to pay for mortgage interest, which would currently cost more.
You pay your landlords mortgage interest instead. And in so doing increase your lifetime housing costs. Your rent could be going towards a mortgage. Even if it is slightly more in the short term, it is massively less in the long term.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
I take it economics isn't your strong suit, either, Hamish.
I'd thought you had at least a modicum of intelligence, but it appears not.
Otherwise, you'd know that paying mortgage interest pays off not one penny of capital borrowed, and so affects my lifetime housing costs not one jot.
Only paying off capital will do that - but saving in a bank account will do that just as well; or rather better, given that my rent is cheaper than the interest costs would be, thus allowing me to save more.
Hence it's 'massively less' to use your phrase, in both the short AND long term.0 -
Absolutely, carolt, you are quids in by an amount equal to
interest being earned on savings + interest not needing to be paid on mortgage - rent
As long as the price of the house you will eventually buy is either falling, or stable, or increasing by less than the amount I've just mentioned, then waiting is worth it. In an environment of HPI, though, it wouldn't be.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
0 -
HAMISH_MCTAVISH wrote: »And yet you seem quite content for a recession and mass unemployment to force down prices, leaving millions in negative equity and wiping out the retirement funds of millions more.
And you find my ideas distasteful????:rotfl:
Actually, no I'm not, and never have been, content about a massive recession causing heartache for millions of people. That doesn't stop me regarding the prospect of housing being more affordable as an important silver lining to a very dark cloud.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.0 -
I take it economics isn't your strong suit, either, Hamish.
I'd thought you had at least a modicum of intelligence, but it appears not.
Otherwise, you'd know that paying mortgage interest pays off not one penny of capital borrowed, and so affects my lifetime housing costs not one jot.
Only paying off capital will do that - but saving in a bank account will do that just as well; or rather better, given that my rent is cheaper than the interest costs would be, thus allowing me to save more.
Hence it's 'massively less' to use your phrase, in both the short AND long term.
It doesn't work like that. At some point you have to pay the mortgage interest anyway. The rent you pay now could be paying that off instead.
You are (usually) just adding to lifetime housing costs by paying rent. The exception can be in the 2-3 years every 20 or so when the market crashes. But even then, or if you delay from too far in advance, it can still end up costing the same or more, and thats before the interest rate differences kick in.
Example....
Person A could have bought house in 2005 for 150K, which was then worth 180K at peak in 2007. With a 100% mortgage at 6% lifetime average interest rate, house would cost roughly double, or 300K.
Person A decided that houses were too expensive in 2005, and instead delayed purchase til 2011. In so doing, they saved £250 per month for a deposit, but spent £700 a month in rent.
So in 2011, person A now can buy the same house for 135K (peak minus 25%), but they now have a 18K deposit. So at a 6% average interest rate will cost roughly 117 x 2 = 234K, plus 18K deposit, for total of 252K.
Plus the rent at 700 per month x 72 months (6 years) = £50400
Total cost by delaying for a 25% discount = £302,400. Or roughly the same when you include the savings interest on the 18K deposit.
If prices don't fall by 25%, and instead increase or even just stay the same, renting loses hands down every time.
It's impossible to win by renting except for a few years in the middle of a crash every couple of decades, and even then it's very, very close. And thats before we count the interest rate differences between pre and post crash lending.
For most people, in 15+ years out of 20, the best thing to do is buy young and never rent.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Absolutely, carolt, you are quids in by an amount equal to
interest being earned on savings + interest not needing to be paid on mortgage - rent
As long as the price of the house you will eventually buy is either falling, or stable, or increasing by less than the amount I've just mentioned, then waiting is worth it. In an environment of HPI, though, it wouldn't be.
In an environment of stable prices it isn't either, for most people.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »It doesn't work like that. At some point you have to pay the mortgage interest anyway. The rent you pay now could be paying that off instead.
You are (usually) just adding to lifetime housing costs by paying rent. The exception can be in the 2-3 years every 20 or so when the market crashes. But even then, or if you delay from too far in advance, it can still end up costing the same or more, and thats before the interest rate differences kick in.
Example....
Person A could have bought house in 2005 for 150K, which was then worth 180K at peak in 2007. With a 100% mortgage at 6% lifetime average interest rate, house would cost roughly double, or 300K.
Person A decided that houses were too expensive in 2005, and instead delayed purchase til 2011. In so doing, they saved £250 per month for a deposit, but spent £700 a month in rent.
So in 2011, person A now can buy the same house for 135K (peak minus 25%), but they now have a 18K deposit. So at a 6% average interest rate will cost roughly 117 x 2 = 234K, plus 18K deposit, for total of 252K.
Plus the rent at 700 per month x 72 months (6 years) = £50400
Total cost by delaying for a 25% discount = £302,400. Or roughly the same when you include the savings interest on the 18K deposit.
If prices don't fall by 25%, and instead increase or even just stay the same, renting loses hands down every time.
It's impossible to win by renting except for a few years in the middle of a crash every couple of decades, and even then it's very, very close. And thats before we count the interest rate differences between pre and post crash lending.
For most people, in 15+ years out of 20, the best thing to do is buy young and never rent.
Error in your calculations . :rotfl:
By buying in 2005 at £150 k with a 100% mortgage at lifetime 6% over 25 years . Person A would spend £290k in purchasing the property.
Person B buying in 2011 at £135 with £18k deposit, requiring a mortgage of £117k would only need a 16 year mortage term. Based on the same monthly repayments that person A is making.
Person B would therefore only spend £66,000 in mortgage interest. Making the total cost of the property £135k + £66k + £50k = £251k.
Saving themselves £39k
Person B would repay their mortgage 3 years earlier and could have saved £39k into a pension scheme. Thereby giving themselves a grossed up investment of £50k. Which could give them a lifetime pension of £3k per annum.
Debt costs money.
CASH IS KING .
0 -
Err... no. You don't have to pay mortgage interest on money you never borrow, so if you buy the house for a lower price then that's a whole chunk of interest that you never have to pay.HAMISH_MCTAVISH wrote: »It doesn't work like that. At some point you have to pay the mortgage interest anyway.
Mortgage interest isn't paid off. It's just paid, leaving you still owing the same as you did before. If you buy the house for a lower price, you can have the mortgage over a shorter term which reduces the interest even more - as per Thrugelmir's calculations.HAMISH_MCTAVISH wrote: »The rent you pay now could be paying that off instead.Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.1K Work, Benefits & Business
- 600.7K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards