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Debate House Prices
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Better to buy than rent!!
Comments
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I chose to ignore inflation... your 2.5% return doesnt ignore inflation, or are you assuming a 2.5% return above inflation... as CASH ISA's are not achieving anything like that... and to average out the CASH and Share isa, you would need 7.5% above inflation return on the 50% of shares /bonds or whatever... boy, you should be a fund manager, if you can achieve this, your in the wrong trade?
I was using the same parameters as your example – I admit it's very unrealistic. Obviously achieving a real return net of tax with RPI at 4.5% as it is in real life is virtually impossible without taking considerable risks.Property prices in JAPAN went wild, WILD, on a much larger scale than in the UK, and they ran out of land completely! lol The reality hit... interest rates in japan over the same period have been "nearly zero" so for the last 15 years, no interest rate shocks, if the UK goes down this road.. then straight like for like, buying v renting will still be a no brainer, although banks will continue to realign there margins to compensate further still no doubt.
True, the bubble was much larger than the UK.0 -
House worth £200k, or 750pm rent at todays values
Including inflation this time.
Total cost of mortgage 140k with 60k deposit at around 3.9%
Total payments 283k plus 37k maintenance House worth 407k in 25 years (with HPI 3% per annum- COMPOUNDED, reasonable assumption) in 25 years
Total COST 320k
TOTAL PROFIT 87K (after deducting house proceeds in 25 years time)
Renting same house today for 25 years £750 per month (with 3% inflation FINAL RENT PAYMENT REACHING £1525pm IN FINAL MONTH...)
Total cost £328k
THATS A DIFFERENCE TO YOUR POCKET OF WELL OVER £400K BY COMPARISON.
Big differencePlan
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 -
House worth £200k, or 750pm rent at todays values
Including inflation this time.
Total cost of mortgage 140k with 60k deposit at around 3.9%
Total payments 283k plus 37k maintenance House worth 407k in 25 years (with HPI 3% per annum- COMPOUNDED, reasonable assumption) in 25 years
Total COST 320k
TOTAL PROFIT 87K (after deducting house proceeds in 25 years time)
Renting same house today for 25 years £750 per month (with 3% inflation FINAL RENT PAYMENT REACHING £1525pm IN FINAL MONTH...)
Total cost £328k
THATS A DIFFERENCE TO YOUR POCKET OF WELL OVER £400K BY COMPARISON.
Big difference
Even with the benefits of owning rather than renting... with a nil resale value at the end... the real benefit is saving 1525 per month from year 2035 and onwards compounding continuing. and the fact your in control. and have the freedom to do to it as you please!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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Owning your own house mortgage-free is a major step towards financial security. And the earlier you can achieve it the better.
Paying off your own mortgage, not your landlords, will facilitate this; and the sooner the better.0 -
(with HPI 3% per annum- COMPOUNDED, reasonable assumption)
Current facts -
House prices - 1 year flat
- 3 years down 16.8%
- 5 years down 1.8%
- 10 years up 93%
As house prices doubled between 1999 and 2003 alone. Would appear that the long average is in fact declining and undergoing a correction.0 -
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really? what happens if you bought 3 years ago - what's the long term average then?Thrugelmir wrote: »Current facts -
House prices - 1 year flat
- 3 years down 16.8%
- 5 years down 1.8%
- 10 years up 93%
As house prices doubled between 1999 and 2003 alone. Would appear that the long average is in fact declining and undergoing a correction.0 -
no wonder you think house prices have fallen in the last 2 years - you haven't got a scooby dooOwning your own house mortgage-free is a major step towards financial security. And the earlier you can achieve it the better.
Lower house prices facilitate this; and the lower they are the better0 -
Owning your own house mortgage-free is a major step towards financial security. And the earlier you can achieve it the better.
Lower house prices facilitate this; and the lower they are the better."The problem with quotes on the internet is that you never know whether they are genuine or not" -
Albert Einstein0
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