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Debate House Prices
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Better to buy than rent!!
Comments
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Chucky the guy cant work out why people would rent rather than buy and then uses an example with a 60K deposit.
I used a 60k deposit, but you could just as easily use a 30k deposit and get a rate like that! With no problems at all, granted repayments would be higher, but to be honest, 30k and interest at 4% over the period isnt going to be a game changer to the total cost.
If you havent saved a deposit, then it doesnt matter what prices reduce too, there will be 95% buying in front of you who have saved SOMETHING towards a deposit. You need to have cash on side to make a difference, either that or equity based on a realistic current valuation.Plan
1) Get most competitive Lifetime Mortgage (Done)
2) Make healthy savings, spend wisely (Doing)
3) Ensure healthy pension fund - (Doing)
4) Ensure house is nice, suitable, safe, and located - (Done)
5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)0 -
in Abaxas dream world rental property has higher maintenance costs than rental income...
i feel it outstanding that people like this are allowed out on their own...
We should forgive him chucky, when my wife sees me getting angry at fools she usually says it's people like that, that make us so successful, leave him be.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
if prices dropped to the level that they [STRIKE]hoped[/STRIKE] wished for, there would be less banks willing to lend meaning deposit requirements would be higher anyway - it's what happened over the few years and happened in every house price correction...I used a 60k deposit, but you could just as easily use a 30k deposit and get a rate like that! With no problems at all, granted repayments would be higher, but to be honest, 30k and interest at 4% over the period isnt going to be a game changer to the total cost.
If you havent saved a deposit, then it doesnt matter what prices reduce too, there will be 95% buying in front of you who have saved SOMETHING towards a deposit. You need to have cash on side to make a difference, either that or equity based on a realistic current valuation.
it's so logical some people just don't get it...0 -
Someone who rents chooses the quality of the property rented. Like buying a car people dont just buy anything, they buy what they like.
Maybe some markets are different, but I've rented for the last 10 years as I contract and move around. Everywhere I've been it's the same, so much choice, why bother with the hovels.
I cant comment on central London, maybe it's like that there?
Thats the same with buying. You can choose to buy a new build where you move in and everything is nice and new or you can buy a house that needs work (usually at a cheaper price) and replace the items yourself. In either case, the maintenance is negligable because you either have new stuff or you are going to buy new stuff to replace the old.
If your argument is that there is less maintenance required on a rented new build property than on a OO newbuild or that there is less maintenance on a renovated rental proeprty than on a renovated OO property, then I'm afraid I cant see how your doing your sums?
If your saying that the maintenance costs are the same but that the landlord soaks up the maintenance costs on the rental property but the owner soaks up the maintenance costs on the owner occupied property, then you are being terribly naive.0 -
Yes I've done the simple maths. How many homeowners actually stay in 1 property for 25 years? Some do, some don't. The average is about 7 years. Buildings insurance? Costs of buying. That annoying thing called stamp duty and solicitor fees? Boiler maintenance? The britsh gas service contract for £15 per month. The mortgage protection insurance? Renters have the ability to fall back on Housing Benefit for free. You need to add all these things. What about the possible interest earnt on this £60k that you started with? Over 25 years that's about £100,000 compounded every year.
I do however admit that it's cheaper buying than renting but the difference is minimal and the real benefit comes in the later years when there is no more mortgage to pay due to the higher payments in the earlier years.
For a FTB buying now, which is who we are talking about
Stamp duty EXEMPT for another 15 months upto 250k
Legal fees altogether 1k max (over 25 years) or 3.33 per month, divided by 300 payments on the mortgage
House insurance £250 per annum (shop around, get some cash back too, via quidco or the like)
Boiler maintenance (have you not got a friend who services gas boilers?) or £60 per annum if you dont for boiler and fire.
interest on 60k... WHAT INTEREST or are you talking about 0.10%??
Mortgage protection? WHY? its just a savings account to get it back as it was missold anyway. the government offers about 4% of interest only protection at the moment anyway.
You get your mortgage interest paid for when your not earning enough... WHAT would you want to fall back on the state for anyway, get another job?
Thats like saying... dont save for a pension, cause you get a state pension anyway. True, it probably isnt worth saving a pension fund up unless its over 50k worth at the end in todays values, but still, better to do something than nothing!
Just explain to me how much pension you would have to save to cover your RENT in 2040 for example... exactly ... you dont know,you dont know cause, you wont know how your investments will perform, you wont know what rents will be, you wont know if you can even rent by then or if you earn money in the meantime to make pension investments, or will you be able to CLAIM housing benefit, or if there will be social housing available for longer than 2 years then?
25 years from now, you know the house is yours...thats a known fact if you take action. but a missed oportunity if you dont!Plan
1) Get most competitive Lifetime Mortgage (Done)
2) Make healthy savings, spend wisely (Doing)
3) Ensure healthy pension fund - (Doing)
4) Ensure house is nice, suitable, safe, and located - (Done)
5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)0 -
Loads of people, with kids, get LHA/Housing Benefit top ups for their rent though, so it's subsidised for them, a house/mortgage wouldn't be.0
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buying a house isn't for everyone...
the people that find buying a house unaffordable are usually those that can't afford it...
Most without parent aid then.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
PasturesNew wrote: »Loads of people, with kids, get LHA/Housing Benefit top ups for their rent though, so it's subsidised for them, a house/mortgage wouldn't be.
But if someone is on benefits they are unlikely to be in a position to buy a property. So I think this debate is limited to those tenants that could afford to buy, if they can't then it's a pointless discussion, since they do not have the option to buy in any case.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
if prices dropped to the level that they [STRIKE]hoped[/STRIKE] wished for, there would be less banks willing to lend meaning deposit requirements would be higher anyway - it's what happened over the few years and happened in every house price correction...
it's so logical some people just don't get it...
This is exactly the way banks price risk.
When risk is low, they go all out for market share, zero risk premium.
When risk is high, they think carefully about WHO, and WHAT finance they would be willing to provide.
If there are expectations in 2011 for 20% falls, Id be surprised to see anything less than 70% LTVS being offered.
If there are 5% gains, I see 90% being the return to the norm, as its still not certain.
15% gains, and 100% wouldnt be a surprise to be honest.
I can see CASH FLOW is the stumbling block for most, rather than the fact they CHOOSE to rent. I know, I have been here before.
But trust me, if your well placed now, deposit in hand, and secure job, IMO, now is the time to get in. 2011 its an unknown quantity.
Mortgage debt, your not a slave, its just a facility to make progress in life, the only way life would work without a mortgage is if NO ONE could get a mortgage! But the fact they are there means you have to join the rabble, and get involved or just simply miss out.
Yes you can live at home for 15 years, save like mad, and when you 40 yo, you can buy cash. But, its late then to start a family and have kids, its late to enjoy life. But there is a risk your savings at some point over those 15 years could inflate away severly!Plan
1) Get most competitive Lifetime Mortgage (Done)
2) Make healthy savings, spend wisely (Doing)
3) Ensure healthy pension fund - (Doing)
4) Ensure house is nice, suitable, safe, and located - (Done)
5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)0 -
chucknorris wrote: »But if someone is on benefits they are unlikely to be in a position to buy a property. So I think this debate is limited to those tenants that could afford to buy, if they can't then it's a pointless discussion, since they do not have the option to buy in any case.
agree totally, lets compare like 4 like...
All my working friends who have lost employment recently who are house owners and renters have still toughed it out and found alternative employment and carried on paying the bills and the rent/mortgage.
Battle of the fittest mentality, survivalists! You do what you need to do to meet the costs as necessary.Plan
1) Get most competitive Lifetime Mortgage (Done)
2) Make healthy savings, spend wisely (Doing)
3) Ensure healthy pension fund - (Doing)
4) Ensure house is nice, suitable, safe, and located - (Done)
5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)0
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