Mortgage now Cheaper than Rent in 80% of the UK

Cleaver

doire wrote: »

Yes lets get back to the good old days again when anyone who turned up at a bank got as much as they wanted. No deposit? No worries...just sign here and the money is yours.

Oh but wait! That didn't work too well did it? A lot of banks lost huge amounts of money! Pity there are now 3 million households at tipping point if IR rates rise by the smallest of margins eh hamish?

Has Hamish suggested that we go back to the days of people getting mortgages with no deposit then?

doire_2

Cleaver wrote: »

Has Hamish suggested that we go back to the days of people getting mortgages with no deposit then?

If it was up to him i bet he would. Anything to get the market moving again. Whether that be 90, 95, 100 or 125% mortgages.

Cleaver

doire wrote: »

If it was up to him i bet he would.

So to summerise, rather than actually discussing the article, you've thought up something that Hamish might say and then argued against that point instead?

HAMISH_MCTAVISH

doire wrote: »

Oh but wait! That didn't work too well did it? A lot of banks lost huge amounts of money!

In the interests of balance, and you know, accuracy.....

Perhaps you'd be kind enough to list the banks that "lost huge amounts of money" on UK mortgage lending.

Or should I save you the trouble by pointing out that with an average reposession rate of well under 1%, UK mortgage lending has remained immensely profitable for all concerned.

Pity there are now 3 million households at tipping point if IR rates rise by the smallest of margins eh hamish?

Absolute nonsense.

That discredited figure is based purely on existing spending patterns, and makes the incorrect assumption that people are unable to modify their spending in any way if interest rates rise.

It's complete and utter alarmist twaddle.

IveSeenTheLight

poppycod wrote: »

There is no way that the average monthly mortgage payment on the price of an average house (140k?) is going to be less than the average rent payment.

That would depend on the rental market.

Certainly, I know areas where the rent received is higher than the mortgage of properties circa £140,000

Here's a flat in that range
http://www-r.aspc.co.uk/cgi-bin/public/LiveProperty/284347?ID=FGKDNKDO#picture

It would command about £800 per calendar month.

The mortgage interest on a £140k property (assuming a 10% deposit) at say 5% would be only approx £525.00



Indeed there are even cheaper properties that would command a similar rental that are much cheaper
http://www-r.aspc.co.uk/cgi-bin/public/LiveProperty/283883?ID=FGKDNKDO#picture

Before you say their offer over, here's one at fixed price
http://www-r.aspc.co.uk/cgi-bin/public/LiveProperty/281703?ID=FGKDNKDO#picture

IveSeenTheLight

IveSeenTheLight wrote: »

The mortgage interest on a £140k property (assuming a 10% deposit) at say 5% would be only approx £525.00

To follow this up, after a year, the mortgage interest drops to circa £515.00 due to capital repayment.
The year after £503.77
And the next year £491.85

I'm not aware of progressingly cheaper rental properties year after year.

HAMISH_MCTAVISH

doire wrote: »

If it was up to him i bet he would. Anything to get the market moving again. Whether that be 90, 95, 100 or 125% mortgages.

I've already stated clearly 125% mortgages are ridiculous, and should not return.

90% and 95% mortgages have a place, for sure, and have always had a place in traditional lending. Perhaps with some form of insurance as they used to have though.

I was offered a 95% mortgage in 1990. My parents were offered one in 1967.

So to portray them as new or irresponsible is bonkers.

N1AK

HAMISH_MCTAVISH wrote: »

What a horrible position...... to be forced into paying more in rent than a mortgage, wasting all that money, month after month after month just to enrich your landlord, because the banks are still underfunded and rationing the limited funds they have.

The problem with pouring your opinion so thickly over the facts is that the facts become very hard to discern.

It is interesting to know that mortgage payments, on average, are so low.

What you either haven't considered or have chosen to ignore is that the people renting would not be paying the 'average' if they themselves choose to get a mortgage.

Suppose for example they could get a 10% deposit mortgage on a £150k property, and wanted to buy it over 25 years. The best 'fixed' mortgage on Moneysupermarket will cost you £788.41 per month. You can save £40pm going with a tracker, something you'd be brave to do if you couldn't risk noticeable rises.

As I'm currently renting a ~£140-150k property at the moment for £525pm it's pretty clear that if my main concern was decreasing my monthly outgoings then a mortgage would be a stupid way to do it.

IveSeenTheLight

Originally Posted by Graham_Devon
But, who pays for your boiler when it breaks down? You don't have to pay that if you're renting.

In my experience a boiler usually lasts 10-15 years, more so if maintained properly.
Do you wish to put into your scenario renting for a similar period to counter the renter not having to repair the boiler?

HAMISH_MCTAVISH

N1AK wrote: »

The problem with pouring your opinion so thickly over the facts is that the facts become very hard to discern.

Indeed.

A similar problem arises when you fail to comprehend what the article is telling you.....

It is interesting to know that mortgage payments, on average, are so low.

Thats not what the article says.

It's saying a mortgage at 5% interest rates (more than most people are paying at the moment, BTW) is cheaper than rent, on average, in 80% of towns in the UK.

That's all it's saying, so the rest of your post is meaningless.