anyone else want a CRASH...?

CB1979_2

manhattan wrote:

also add the compulsary council tax, bills and insurances etc

true cos when you rent you don't have to pay council tax, bills or insurance :rolleyes:

lynzpower

CB1979 wrote:

true cos when you rent you don't have to pay council tax, bills or insurance :rolleyes:

well many rented properties include bills and you certainly dont pay buildings & life insurance when renting

roswell

CB1979 wrote:

true cos when you rent you don't have to pay council tax, bills or insurance :rolleyes:

Would you honestly insure someone else`s asset?? Most rentals are council tax inclusive and you only have elec / gas /TV and possibly water to pay. so when you take a monthly mortgage payment + insurance / life insurance / council tax in most case`s it will be cheaper to rent in the current market state.

When I Purchased in 2002 it was the reverse of the above.

roswell

Just to add a note, Im not sayting renting long term is the answer but at the current state of play it would be the cheaper choice for many till the tables turn again.

tomstickland

We could afford to pay a mortgage of 6 times our salary. So the days of allowing 3x your salary in mortgage are outdated. If you were to take out a mortgage of about 6 times a 30k salary, add this to a decent deposit, you would be looking at buying somewhere for 220k plus, a bit more likely to buy a more sensible property.

And banks now are offering 6 times salary mortgages easily.

It's not a good idea though.

cupid_s

tomstickland wrote:

It's not a good idea though.

I agree and I would never stretch myself that far. And wouldn't recommend it to anyone else. It's people buying stupidly like this that has propagated the cost of buying.

But regarding other costs when renting. Nowhere to rent here is council tax inclusive. I have never heard of this! Also you don't always HAVE to have life insurance with a mortgage. We don't (it isn't compulsory with my mortgage and we don't need it). And for me my buildings insurance is teeny tiny compared to my contents. And contents insurance you obviously need whether in your own home or renting.

Though all that said if I was buying now... well I wouldn't. I'd rent instead.

CB1979_2

roswell wrote:

Would you honestly insure someone else`s asset?? Most rentals are council tax inclusive and you only have elec / gas /TV and possibly water to pay. so when you take a monthly mortgage payment + insurance / life insurance / council tax in most case`s it will be cheaper to rent in the current market state.

When I Purchased in 2002 it was the reverse of the above.

ah ok as with everything I'm only speaking with my experience and everywhere round here (unless it's a bedsit) is plus ALL them bills.

my tenants pay me £800 pcm, then they have to pay, council tax, gas/elec/water bills, their contents insurance, telephone, tv etc etc on top

granted they don't pay a whopping £30 a month for life insurance and also the £20 a month for building's insurance.

manhattan

CB1979 wrote:

ah ok as with everything I'm only speaking with my experience and everywhere round here (unless it's a bedsit) is plus ALL them bills.

my tenants pay me £800 pcm, then they have to pay, council tax, gas/elec/water bills, their contents insurance, telephone, tv etc etc on top

granted they don't pay a whopping £30 a month for life insurance and also the £20 a month for building's insurance.

how much would the mortgage be per month to buy the above place at todays prices?

CB1979_2

i bought it end of August

and my IO mortgage on £165k is £670 pcm.

just a little note, I'm not a BTLer this is going to be my home, but due to my g/f having an operation in October we decided to let it for 6 months as she wouldn't be getting full pay.

scorpio_princess

ukbondraider wrote:

By stock are you referring to shares?

If so a 100% increase every year is a bit far fetched. When buying equity a 10-15% increase per yr is considered very good and even this is hard to sustain. Shares can also easily decrease in value.

Not sure if your calculations work.

As for a housing crash, this will only happen when no one can afford to buy. This will be evident by observing what is happening around you. I'm currently looking at my friends aged 25-28 and although they are first time buyers they are happily buying their 2 bed apartments for around £350K. I am looking at other people I know and although not as fortunate they all seem to be able to afford a house albeit a smaller one than they would have preferred. Interests rates are not going much higher so people rightly or wrongly can still stretch themselves. Everyone also seems to happy in their jobs and are generally spending alot socially aswell. i.e the economy seems relatively good. Now this does not seem to be changing and only until it does will we see any impact. Also the crash seen a decade ago will unlikely repeat itself as the Bank of England will never raise rates as high (as Warren Buffet will not be arbitraging the country again). The BOE have also learnt from their past mistakes so any downturn in the housing market will be engineered to be a soft one via interest rates.

What I guess needs changing is the mentality that everyone should be able to buy their own house regardless of their earnings. Life is hard but in the UK it is harder because here we always get shafted. Mind you in the UK we all expect to earn £100K as a toilet cleaner which is why the country is not as prosperous so I am not sure whos really to blame.

The Britain you're depicting here is a real rosy, perfect one isn't it - brilliant economy, low interest rates, plenty of social spending. Are you in London by any chance??! If you are, you need to take a look a lot further afield - things aren't nearly as lovely as you're making out. Unemployment is rising in some areas - partly due to immigrant labour, but mostly to do with businesses going bust because the governments policies on business and employment are strangling employers. Interest rates WILL go up - why can't history repeat itself? It has before.

One more thing - high social/leisure spending is donw to one thing - EASY CREDIT. Once that cow has been milked, and all the banks and credit card companies start running scared and restrict their lending, everythign else will slide too.