Own a house - you're working for nothing.

des_cartes

RenovationMan wrote: »

It seemed to me that this particular thread had nothing to do with money saving for people who are thinking of buying houses and everything to do with trying to goad people who have already bought houses.

End of story, really.

More the reverse I would say. There is no place on a forum dedicated to money saving for people talking up the cost of the biggest purchase most people will ever make. Why are you here? what is your motivation? I am here to reduce the cost of buying a house, to save myself money, and you?

des_cartes

G_e_o_r_g_e wrote: »

I agree. It is like renting at the moment.

G e o r g e

Except the average house is decreasing in value by three times as much as the cost of renting the equivalent property.

des_cartes

nearlyrich wrote: »

This confuses me, it will take a lot for my home to decrease in value to the level at which we bought it in 1992, it would have to lose about £300k so as we no longer have a mortgage I struggle to see how I am working for nothing please explain?

Well as you asked.

Lets assume your house is valued at 350k.

It's losing about 1% per month = about 3.5k per month.

You could probably rent it for about 1k per month

Your net loss is 2.5k per month.

Of course owning a house as others have said is not only about the financial implications, but as an answer to your question, I hope i have helped your understanding of the topic. Bearing in mind that UK houses have around 30% further to fall, your net loss from here could be around 75k. Fine as long as you do not need 75k, but for me when I sold 4 years ago, the potential saving I could achieve by selling at the top of the market and buying when prices fell was too good to miss.

phil_b_2

des_cartes wrote: »

Well as you asked.

Lets assume your house is valued at 350k.

It's losing about 1% per month = about 3.5k per month.

You could probably rent it for about 1k per month

Your net loss is 2.5k per month.

Of course owning a house as others have said is not only about the financial implications, but as an answer to your question, I hope i have helped your understanding of the topic. Bearing in mind that UK houses have around 30% further to fall, your net loss could be around 75k. Fine as long as you do not need 75k, but for me when I sold 4 years ago, the potential saving I could achieve by selling at the top of the market and buying when prices fell was too good to miss.

As I read that all my brain could hear is blahlahblahblahblaaaaa. You're making stuff up.

des_cartes

phil_b wrote: »

As I read that all my brain could hear is blahlahblahblahblaaaaa. You're making stuff up.

What have I made up? Please explain.

phil_b_2

des_cartes wrote: »

What have I made up? Please explain.

You have no idea how his house is losing/gaining or how much it stands to lose/gain in the future. Claiming you do doesn't do you any favours IMO.

des_cartes

phil_b wrote: »

You have no idea how his house is losing/gaining or how much it stands to lose/gain in the future. Claiming you do doesn't do you any favours IMO.

1. house prices are falling by an average of 1% per month (Fact see 3 month data from Nationwide/Halifax/Land Registry)

2. Average UK house prices are currently 7 times average incomes. The long term ratio is 4 times average incomes. Fact.

These are not made up numbers. These are facts. Basing an argument on facts seems to me a more sustainable way of putting forward an argument than blahblahblahblah.

Both the above are good reasons to put forward an argument that house prices are falling and have further to fall. As for the op, I have no idea where hos house is. It could be in London where prices are holding up or in the North of England where they are falling faster, or somewhere in between where 1% mom falls are representative. The fact remains that most people who own a house are losing more in the decreasing value of their property than the cost of renting a similar property and their earnings combined. Hence the DT headline.

phil_b_2

des_cartes wrote: »

Bearing in mind that UK houses have around 30% further to fall

Some of your facts sound a lot like personal opinion and assumption to me (with some bias and wishful thinking thrown in for good measure).

Your assessment of the other posters profit/loss had little to do with known facts really.

You mentioned regional difference which is massive, then there are differences with properties in those regions, and that's not considering that falls would have to be solid and consistent for the next x years for you to be making these 'savings' by renting each month.

IveSeenTheLight

olly300 wrote: »

Not true.

Landlords have to give 2 months notice due on rent day. And you can delay moving out until they go to court giving you up to another 6 months during which time you can trash the house and be behind on the rent. You can also annoy the neighbours if you want to as well.

Now what is true is that lots of people have repayment mortgages so the amount owed on their property decreases every year.

To even consider the part in bold says a lot.
You seem to consider it's an easy option, however when it does get to courts, you'd end up liable for all the costs, refurbishment, late payment of rental etc.

Your option seems to be to stick your head in the sand and try to make the most out of it, which may work short term, but ultimately mean your worse off in the long term.

toocan

I dont see how house prices could fall by 30% - this is just my speculative opinion - for 2 reasons.

1) It would push millions of people into negative equity
2) It would effectively make the business of building new houses profitless

I personally believe house prices may fall a little more but level out purely due to supply/demands issues. With LTV being relatively large for average wage earners I guess we will adopt a more German model with more people renting and those buying having to save over a longer period and buying in there 40's rather than 20's