Renting is NOT Dead Money

chucky

Procrastinator333 wrote: »

Renting is NOT Dead Money

too many variables to say that this is correct.

renting is NOT Dead Money and buying a house is NOT Dead Money either.

they both are good options, it all depends on the individual circumstances.

Procrastinator333

HAMISH_MCTAVISH wrote: »

Whatever.

Based on the facts shown, it's accurate. Play around with the mortgage rates or months involved, and it's still close either way.

The facts shown are the pick of mortgage products with that wonderful thing called hindsight. What were interest rates at the time 5.5%? Who predicted the collapse in mortgage rates?

So basically, if you got lucky and picked the best possible mortgage product back then, you would still be behind. Great.

HAMISH_MCTAVISH wrote: »

6 months? Not much.

12 months? Depends on the results of the CSR and whether or not they QE and otherwise intervene to alleviate the mortgage shortage that is the only thing limiting effective demand and holding back prices.

So if there is little to drive hpi in the next 6 months, why shouldn't the FTB just take it easy and keep saving for that higher deposit and access to better ltv rates?

If you are right and the government does fund the mortgage market, blimey, can't even begin t think that through, but it would be a game changer.

Procrastinator333

chucky wrote: »

too many variables to say that this is correct.

renting is NOT Dead Money and buying a house is NOT Dead Money either.

they both are good options, it all depends on the individual circumstances.

Agree chucky and I should really have added a bit more to my opening post. I put it up to oppose the opposite point made by the ghouly. IT made sense when the threads sat side by side. Think I may just edit to add that point.

HAMISH_MCTAVISH

Procrastinator333 wrote: »

The facts shown are the pick of mortgage products with that wonderful thing called hindsight. What were interest rates at the time 5.5%? Who predicted the collapse in mortgage rates?

So basically, if you got lucky and picked the best possible mortgage product back then, you would still be behind. Great.

No, those were typical high street mortgage rates at the time, not the best. The best were UNDER base rate. I didn't use those because it would be unfair.

And if you took one of those typical rates, you'd be ahead, not behind.

So if there is little to drive hpi in the next 6 months, why shouldn't the FTB just take it easy and keep saving for that higher deposit and access to better ltv rates?

For most, probably not too big an issue.

But if, as you suggest, a minor downtrend is developing, then it can only be doing so because mortgage availability is tightening. Which means higher rates and less mortgages being issued. Less people able to buy houses, in other words. One of which could be you.

And it will also then lead to housing supply contracting rapidly as well, just as we saw last time. Which is not a problem if you're in the market for a Barret rabbit hutch, to be fair. But could be if you want something a bit different.

If you are right and the government does fund the mortgage market, blimey, can't even begin to think that through, but it would be a game changer.

Massively so.

And if prices do contract significantly, it's inevitable.

Procrastinator333

HAMISH_MCTAVISH wrote: »

No, those were typical high street mortgage rates at the time, not the best. The best were UNDER base rate. I didn't use those because it would be unfair.

And if you took one of those typical rates, you'd be ahead, not behind.

What were the fixes of the time? You talk like these variables were a no brainer. I don't really know as we never seriously considered buying an option then.

I also find it strange that you talk of not buying as a massive gamble yet you seem to advocate people leveraging up and taking on variable mortgages.

HAMISH_MCTAVISH wrote: »

But if, as you suggest, a minor downtrend is developing, then it can only be doing so because mortgage availability is tightening. Which means higher rates and less mortgages being issued. Less people able to buy houses, in other words. One of which could be you.

I do not wish to come across as a !!!!!! here and I'm only responding to the point, but if it ever gets to the stage where we are turned down, nobody will be getting mortgages and prices will collapse to the point where we could buy with our deposit alone. So it would actually make my day if we were declined for a mortgage.

HAMISH_MCTAVISH wrote: »

And it will also then lead to housing supply contracting rapidly as well, just as we saw last time. Which is not a problem if you're in the market for a Barret rabbit hutch, to be fair. But could be if you want something a bit different.

There will always be the 3d's.

HAMISH_MCTAVISH wrote: »

Massively so.

And if prices do contract significantly, it's inevitable.

I think they are looking for small nominal falls to go with some real term falls.

By this point, prices are stagnant or lower than 3 years ago. Mortgages have required 10% deposits for most of that time. I do think the vast majority of mortgages these days have a good 10-20% equity via deposit and repayments. If I were a bank I would be quite happy for that to fall away.

Anyway, we will see, and if they do that, then kudos to you for calling it.