Mortgage now Cheaper than Rent in 80% of the UK

System

Stick to soundbites doire.

Graham_Devon

What is this about natural wastage...

Grrrr!!!

Natural wastage is fine. It's always happened. But the position is usually filled by someone else, someone who isn't at retiring age. So it's a job opening for someone else in the work force.

What we have is job positions being lost. Whether its natural wastage to that company or body, it still means less job positions.

That would be fine in a world where there were less people needing jobs, but unfortunately, new people are coming to the workforce to take the place of those retiring out of it, on a rolling basis.

Less positions available = higher unemployment. Unless we somehow come up with a solution of stopping people reaching working age.

poppycod

Cleaver wrote: »

Thanks Dervish.

more baseless accusations.

poppycod

benb76 wrote: »

I see the usual crowd over at HPC have picked up on this article and are doing their best to discredit it. Some outrageous claims being made, such as that the savings interest earned on the money that it would cost to buy a property us actually more (after tax) than the cost of renting the same property!

I just wish I could find those savings accounts that yield 5% net of tax!

The HPC folks dont need to discredit it.

Anything Hamish posts is instantly discredited.

N1AK

HAMISH_MCTAVISH wrote: »

No, they are not very clear in the article.

I think we'll have to assume they're talking about the interest component.

If we're assuming something as fundamental as that then it's hardly very clear

I think you're right that it is 'interest only' they are comparing against. Which is still interesting.

HAMISH_MCTAVISH wrote: »

To rent a 1 bed flat up here costs around £550 per month.

To buy the same flat costs around £90,000

Even at 100% LTV, a full repayment mortage at £532 is less than the rent.

The problem with anecdotal evidence is everyone has it and it doesn't mean very much. I've rented two places for ~£550 and both were worth ~£150k.

I'm willing to accept that if we just look at interest it may be cheaper, although I'd like to see more explanation. Most people would expect 'mortgage' to mean actually buying the property though

benb76

If you're comparing renting vs buying you have to discount the capital repayment part of the monthly payments. If not you're ignoring the fact that you own the house at the end of your mortgage period, unlike if you were to rent the same place for 25 years!

N1AK

benb76 wrote: »

If you're comparing renting vs buying you have to discount the capital repayment part of the monthly payments. If not you're ignoring the fact that you own the house at the end of your mortgage period, unlike if you were to rent the same place for 25 years!

If your comparing TCO (total cost of ownership) then absolutely. The problem is that this article is saying your monthly outgoings will decrease. Very few people, especially those with tight budgets buy on 'interest only' mortgages.

As I've already said, I'm not trying to say buying is a bad idea, I just think their assertion that getting a mortgage will decrease your monthly outgoings is misleading at least in the short term.