Generation Rent.... The future of those who missed the boat..

HammerSmashedFace

How can people have missed the boat ? in the areas I looked at, prices are pretty much the same as last year, with not much selling. I think the boat that some people believe has just sailed with it's cargo hold full of '0% HPI' is likely to be sunk within a couple of miles from the coast.

Unless you got an unbelievably good deal or won the lotto, the smart money is on those FTB'rs that are waiting on the 'dock side', give it 12-18 months to see the full picture. Like most horror movies the best bit is always in the last 10 mins.:D

Wookster

chucky wrote: »

i wouldn't even bother trying to explain Hamish, some of these people are a bit slow... if it's so much cheaper to rent than buy why do people make money out of letting property to tenants.

Nice to see you're still only capable of throwing petty insults around. Why don't you come back when you can behave like an adult?

chucky

Wookster wrote: »

Nice to see you're still only capable of throwing petty insults around. Why don't you come back when you can behave like an adult?

so you weren't unable to answer the point below about rent being more expensive to buy long term.

as expected a very nice way to deflect that you can't back up your random statement. well done :T

chucky wrote: »

i wouldn't even bother trying to explain Hamish, some of these people are a bit slow... if it's so much cheaper to rent than buy why do people make money out of letting property to tenants.

chucky

HammerSmashedFace wrote: »

How can people have missed the boat ? in the areas I looked at, prices are pretty much the same as last year, with not much selling. I think the boat that some people believe has just sailed with it's cargo hold full of '0% HPI' is likely to be sunk within a couple of miles from the coast.

Unless you got an unbelievably good deal or won the lotto, the smart money is on those FTB'rs that are waiting on the 'dock side', give it 12-18 months to see the full picture. Like most horror movies the best bit is always in the last 10 mins.:D

nobody missed or misses any boat... but they could miss opportunities where they could get a combination of a cheap rate and a cheap house. there have been these opportunities in the last year.

these opportunities come around when prices are falling and even when prices are rising - less so when prices are rising though.

abaxas

As I've said before.

Why buy when you can get a homeowner (who needs a job to own his home) to pay your rent.

A no brainer for most, why pay when someone else is stupid enough to.

HammerSmashedFace

chucky wrote: »

nobody missed any boat but they could miss opportunities where they could get a combination of a cheap rate and a cheap house. there have been these opportunities in the last year.

these opportunities come around when prices are falling and even when prices are rising - less so when prices are rising though.

Although I agree, I believe the cheap rate should not be factored in when buying a house, unless the deal takes you to the end of the mortgage, factoring in say 8% rate with a single wage is, in my estimation, the right thing to do.

The problem is in the last decade we have shifted away from single multiples or low joint multiples to a couple stretching themselves, leaving no room if they are faced with separation, divorce, illness, unemployment or even death. Yet at least one of these factors is highly likely to face a FTB'r couple over a 25 year period.

Of course in the past we have had good bouts of wage inflation to sooth the debt away, this time, that's unlikely to happen, leaving the debt weighing heavy.

neas

renting over 25 years as compared to buying is obviously a no brainer.

But surely if you are accusing somenoe of being 'not so bright' you can't really believe your own argument can you?

Just look at the anedoctal evidence. if you had rented at start of crash through to end of crash (some 15% drop or so) then you'd have spent say 6-7k in rent as opposed to 6k in mortgaeg interest and repayed only 2-3% of your mortgage.

So... what would you have gained statistically in this short period of a crash? Well simply you'd have saved at least 10%.

In that case renting for 1.5 years through crash.. was the right decision... in addition you can still get reasonable rates for mortgages now.

Of course this is just a simple example and the truth of the matter is there are always counter-arguments.... you could use any of the following to argue the 10% 'saving' is less than 10%:

1. If person was on a tracker mortgage and was paying 0.25% interest (i.e 100 quid a month interest compared to £500 a month rent.. then 10% saving over the 1.5 years would be offset by a £400 saving on rent vs interest (some £5000). If the 10% was > £5000 the indiividual would notionally still save money. BUT if the tracker rates continued for 3 years then the winner would be the one paying the low interest rate.
2.That before the person could get a mortgage and now they may not be able tog et one.. or be forced onto a higher rate.


basically its too complicated a comparison to do it full justice... and theres always an out.. for both parties to argue for and against.

Personally i know Im not on a tracker mortgage, would never have been on a tracker mortgage... so for me i'm in a better situation. I do believe however that soon interest rates will ramp up so it may still be a 'good' time to buy.. as even if prices drop... interest rates could ramp up so the cost on interest is more or the same as buying now.

Obviously a long fix (5 years) would help

Out,_Vile_Jelly

I can only buy by meeting The One and having a dual income, or my parents dying and providing me with inheritance. In the meantime I shall rent in a nice part of town, continue to save and get on with my life.

Saw a mate's new 6 bed house in the suburbs the other day (FTBs, but filthy rich accountants). Prefer my rented zone 3 flat to be honest, and I wouldn't want to have to marry the person they are in order to afford it.

System

That's great but the phrase "long term" was used.

Edit: @neas.

abaxas

neas wrote: »

renting over 25 years as compared to buying is obviously a no brainer.

But surely if you are accusing somenoe of being 'not so bright' you can't really believe your own argument can you?

Just look at the anedoctal evidence. if you had rented at start of crash through to end of crash (some 15% drop or so) then you'd have spent say 6-7k in rent as opposed to 6k in mortgaeg interest and repayed only 2-3% of your mortgage.

So... what would you have gained statistically in this short period of a crash? Well simply you'd have saved at least 10%.

In that case renting for 1.5 years through crash.. was the right decision... in addition you can still get reasonable rates for mortgages now.

Of course this is just a simple example and the truth of the matter is there are always counter-arguments.... you could use any of the following to argue the 10% 'saving' is less than 10%:

1. If person was on a tracker mortgage and was paying 0.25% interest (i.e 100 quid a month interest compared to £500 a month rent.. then 10% saving over the 1.5 years would be offset by a £400 saving on rent vs interest (some £5000). If the 10% was > £5000 the indiividual would notionally still save money. BUT if the tracker rates continued for 3 years then the winner would be the one paying the low interest rate.
2.That before the person could get a mortgage and now they may not be able tog et one.. or be forced onto a higher rate.


basically its too complicated a comparison to do it full justice... and theres always an out.. for both parties to argue for and against.

Personally i know Im not on a tracker mortgage, would never have been on a tracker mortgage... so for me i'm in a better situation. I do believe however that soon interest rates will ramp up so it may still be a 'good' time to buy.. as even if prices drop... interest rates could ramp up so the cost on interest is more or the same as buying now.

Obviously a long fix (5 years) would help

The problem is that over the past 5-6 years renting has provided a much larger return on investment than buying. However that doesnt mean it will in the next 5-6 years, or even then next 1-25 years.

People need to remember that a property costs money to maintain, which is traditionally 1-3% of the houses cost per annum. Without that investment you do not maintain the value of the property.

Why not invest in someone elses greed, then buy when it is in your advantage. Never just beleive that something increasing in value is making you money, often it isnt. Be proactive in your stance and go where the money is, not where someone tells you it is.