Buying Cheaper Than Renting Everywhere except London

chucky

carolt wrote: »

What a load of rubbish. How many FTB's are going to get long-term fixes for 4.39%?

can someone please explain that rents will not be the same as they will be during that 5 year fix :rolleyes:

carolt wrote: »

And what idiot would buy on a short term rate now, when inteest rates are going to shoot up within a year or two?

do you have access to the BOE or G20 meetings or do you really have a crystal ball?

BOE rates are going to be this low for a good long while yet...

carolt wrote: »

Ignoring the fact that the article is wong even now - I don't live in London, and it's certainly FAR MORE EXPENSIVE to buy than to rent at current prices/rates, even for those few for whom it does apply, the chances of it continuing to apply over the 25 year life of the mortgage are non-existent - if they buy at current prices.

Far better to wait - unless you can get a long-term fix at those rates (you can't) - as once rates rise, prices, will, inevitably fall.

not many people would qualify for a 25 year mortgage and deifinetly not at 90% LTV... there were 10 year fixes a few months ago at just under 5%.

those expecting to get long term fixes along with a cheap house are in cuckoo land. long term fixes (over 10 years) will be on the market when house prices have started to rise over the long term.

Entertainer

Wrong, wrong, wrong. Rental yields are around 5.5% where I am and seem to be similar all around the country if you ever watch Homes under the Hammer, except the north. The "renting is cheaper than buying" Ponzi schemers always conveniently forget lost interest on deposits, in fact sometimes they even forget the interest on capital as well.

5.5% is no saving with mortgage rates nowhere near base rates plus you have maintenance. I don't think rents will increase much during the next few years given the supply of rental properties and the pressure on earnings. In the mid 90's rental yields were 12% and base rates were 6% and then there really was a saving but of course, no one wanted to buy then and there weren't any property programmes on t.v. Those two freaks on HUTH were probably estate agents in some crap provincial town.

the_ash_and_the_oak

phil_b wrote: »

What about the superiority of the property you can have buying Vs renting too?

We bought nearly a month ago and are about £250 per month better off and living in a house about 50% bigger on a much better road.
We are also actually HAPPY now Vs just plodding along in a rental we didnt given a sod about and couldnt even decorate.

Lets also consider that many FTB's buy a house with a chunk (if not all) of their deposit coming from the bank of mum and dad and wouldn't actually be getting any interest on that if it was left in the bank.

Definitely agree that those that have a free sum of money equivalent to a deposit coming to them from their parents are going to be in a better position than those that don't have this imo

the_ash_and_the_oak

HAMISH_MCTAVISH wrote: »

If you applied that amount to your rent, you would be £6 a month cheaper renting than buying for now, but would still be adding the full monthly costs to your lifetime housing expense as it's another month you could be living rent/mortgage free at the other end of the mortgage. .

Don’t agree w this. Think this is only the case if you don’t use wisely. For example there is not harm in instead of a 25 year mortgage now, renting for 3 years and then getting an 18 year mortgage, and being mortgage-free 4 years earlier

To further put that £690 a year interest on the deposit in perspective, it doesn't even cover the average price increase in that 93K house last month alone, let alone since February.

While this may be true we are comparing rent vs mortgage costs at this time (todays buyer doesn’t get the savings of any previous rises). If we are going to factor in price rises (or falls) then it is no longer a straight mortgage vs rent comparison but a bet on prices rising (or falling).

Either this is a debate about whether it is cheaper now to buy than rent or not, or it is about price rises (if it is the latter it doesn’t matter whether its cheaper to rent or buy right now or not – ie – if I thought prices would double in a years time then I would buy instead of rent – regardless of whether the montly costs were greater for that year)

HAMISH_MCTAVISH

the_ash_and_the_oak wrote: »

Don’t agree w this. Think this is only the case if you don’t use wisely. For example there is not harm in instead of a 25 year mortgage now, renting for 3 years and then getting an 18 year mortgage, and being mortgage-free 4 years earlier

Yes, but as the article shows, that is not really very practical for most people.

When the cost of renting and a mortgage are the same,, where do the savings come from?

And if you can save when renting when the costs are the same,, then you could just as easily over pay the mortgage and come out equally ahead.

While this may be true we are comparing rent vs mortgage costs at this time (todays buyer doesn’t get the savings of any previous rises). If we are going to factor in price rises (or falls) then it is no longer a straight mortgage vs rent comparison but a bet on prices rising (or falling).

Care to bet that there won't be another price rise this month? Even a tiny rise in a month wipes out the entire interest on the deposit for a year.

Either this is a debate about whether it is cheaper now to buy than rent or not, or it is about price rises (if it is the latter it doesn’t matter whether its cheaper to rent or buy right now or not – ie – if I thought prices would double in a years time then I would buy instead of rent – regardless of whether the montly costs were greater for that year)

Well, it's more a statement that the last great war-cry of the bears, that rent is cheaper than buying, is complete and utter tosh on a national average.

Buying is now cheaper than renting in the short term.

Buying has always been cheaper than renting in the long term, even at peak, and even with stupidly high interest rates.

The ONLY way it now pays to rent versus buy, is IF we see further substantial falls.

Very risky strategy indeed, as such a thing is looking less and less likely by the day.

Thrugelmir

HAMISH_MCTAVISH wrote: »

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Buying has always been cheaper than renting in the long term, even at peak, and even with stupidly high interest rates.

Hamish, something I find myself in agreement with you. As markets normalise buying will definately return to be cheaper to buy than renting.

The issue for those buying is raising the deposit, purchase fees and other costs involved in setting up home for the first time.

Not everyone gets a leg up from wealthy relatives.

the_ash_and_the_oak

HAMISH_MCTAVISH wrote: »

Yes, but as the article shows, that is not really very practical for most people.
When the cost of renting and a mortgage are the same,, where do the savings come from?

See where you’re coming from here – and it is interesting – esp in regard to saving the deposit in the first place. Do agree that the higher the amount saved for deposit the more the it skews towards buying than renting on a montly head-to-head cost basis tho (and the smaller the deposit the more towards renting)

Care to bet that there won't be another price rise this month? Even a tiny rise in a month wipes out the entire interest on the deposit for a year.

I don’t care to bet against a price rise this month no. It would not surprise me were there to be one

Well, it's more a statement that the last great war-cry of the bears, that rent is cheaper than buying, is complete and utter tosh on a national average.

Buying is now cheaper than renting in the short term.

For those w 25% deposits it does look to be around the same. For those w less, not really imo

Buying has always been cheaper than renting in the long term, even at peak, and even with stupidly high interest rates.

This may be true but imo there are options inbetween 25 yr rent and 25 yr mortgage tbf. Also depends on whats being bought. Don’t disagree buying lifelong house w deposit works out good, not really convinced about buying 5-7 year rung on ladder w lower deposit right now tho imo

The ONLY way it now pays to rent versus buy, is IF we see further substantial falls.

Overall can’t really agree w this tbh – I’d spin this the other way round, it pays to buy rather than rent if you think prices are going to continue increasing away from wages. This is a different argument imo

izzybusy23

HAMISH_MCTAVISH wrote: »

http://uk.news.yahoo.com/21/20091009/tuk-most-renters-better-off-buying-home-6323e80.html

So much for the "I'm saving the difference" myth......

Edited to add link.

Nah, not in my neck of the woods, complete cr&p being posted yet again.

mizzbiz

Renting is cheaper here when you compare like for like property. I do admit it was chepaer to buy than rent 8 YEARS AGO but certainly not now.

Most FTB's were stuck on circa 6% for a start. Then how many have 25% deposits? And the buying fees?

Then there's buildings insurance, maintenance if you buy a flat, the cost of not being able to move when you want because...wait for it..... prices are actually falling, whatever the Daily Mail tells you.

Factor in the costs of repairs too and I think we have a winner.

Over the course of 25-35 years obviously buying is cheaper, but now, for a fact in my area, renting is cheaper on a month to month basis at the mo.

nembot

izzybusy23 wrote: »

Nah, not in my neck of the woods, complete cr&p being posted yet again.

Agreed.

Get youself a Hamish'ometer, the scale ranges from laughable to absolute twaddle.

Copy/Paste the first and last line of his post for results, think mine is broken, needle seems to be stuck nowadays.