I've £100K equity and I'm going to sell and rent...

EdInvestor

Note to RI:

The Oz market isn't really comparable to the UK market because rentals charged are much lower.This reflects the fact that losses incurred on letting property can be claimed as tax deductions against employment income by part-time landlords.

As a result of this, many Oz letting properties are deliberately run at a loss, making renting a much cheaper deal for tenants.This tax dodge of course doesn't apply in the UK.

ReportInvestor

Thanks both. Neither of these points should affect the calculator, though AFAIK.

You just input the data relevant to you and UK market. Or am I missing something ?

I went for an Oz calculator because the US ones seem complicated by different state taxes depending on your ZIP code.

Is there a UK rent v buy calculator? And if not, why not?

Chrismaths

Ed, that's a hugely simplistic way of looking at it. Leaving aside who gets credit for what, and whether we have "full employment" (despite there being 2.7m people on incapacity, and another 4% of working age people unemployed), the reason why global (not just UK) interest rates have been low has been the financing of the US trade defecit by China and Japan, and the deflationary pressures created by global outsourcing to China and India. But these are one-off gains - inflation is an annual measure. If risingcosts from input and labour costs get passed through to end prices, inflation increases.

And this is the key point. Central bankers are not paid to create economic growth. They are paid to control inflation. That's it. If the two year view for CPI goes above 2.5%, interest rates go up. If that causes a recession, that's irrelevant, as the theory goes that better to have a small one now than a big depression later. In a recession, people lose jobs. Unemployed people default on their mortgages. Banks foreclose, sell the property, increasing supply at a time when there is less demand (due to less people having jobs and therefore money).

The economic system is hideously complex. Putting your faith in central bankers and politicians to take away risk is not a realistic strategy.

Chrismaths

RI - agreed, it won't effect the calculator, that's why I said it was off topic. It's reasonable other than that, but as you would expect from a mortgage company, it is biased (in ways you explained) to produce a result that favours owning property.