An entire generation locked out of property ownership

chucky

Graham_Devon wrote: »

Previous figures (produced by the media last year sometime) show that based on today (which is all figures can do, as rents could tumble and interest rates rocket etc).

The figures concluded it would take approximately 39 years for the buyer to come out on top of the renter. This obviously didn't include equity, as it was concluded that the equity is not physical money that can be spent, unless the house is given up.

Based on a 40 year mortgage, instead of a 25 year mortgage, and I can only guess that it would take longer than 39 years to come out above the renter.

All the figures were done on averages for that year. It included stamp duty, solicitors fees, mortgage fees, mortgage interest, maintanance, insurances etc.

You are just taking a blase guess that the renter will end up worse off. At some point, yes. But today, I believe you would be better off renting than entering a 40 year mortgage deal....especially if you are entering this based on the mere assumption that things will go swimingly and you'll be able to pay more off.

do you expect the landlord to keep the same tenant for 39 years? i don't think so...

i can't believe that you're so desperate to try to convince people that renting is better than buying for 40 years. you're de-ramping is getting silly now...

Graham_Devon

chucky wrote: »

do you expect the landlord to keep the same tenant for 39 years? i don't think so...

i can't believe that you're so desperate to try to convince people that renting is better than buying for 40 years. you're de-ramping is getting silly now...

What has it got to do with the landlord and keeping the same tenant for 39 years?

This is about a tenant renting vs someone buying.

wotsthat

Graham_Devon wrote: »

What has it got to do with the landlord and keeping the same tenant for 39 years?

It seems about as likely as taking out a 40 year mortgage and keeping it for 40 years.

Graham_Devon

wotsthat wrote: »

It seems about as likely as taking out a 40 year mortgage and keeping it for 40 years.

I think you are deliberately trying to confuse the situation here.

What's likely and unlikely is neither here nor there. You are jumping back to the "if's" you accused me of using.

In any case, if you want to start bringing moves into the equation, feel free to do so, as the renter will end up far better off.

I'm not gonna sit here arguing it out. Know better than that with you and your counterpart around. Do the sums yourself if you take issue, rather than taking issue with myself.

chucky

Graham_Devon wrote: »

What has it got to do with the landlord and keeping the same tenant for 39 years?

This is about a tenant renting vs someone buying.

so who do you think the tenant is going to rent from if has got nothing to do with the landlord?

do you really think that people will be renting one property for 39 years? he'll get moved on quite a few times by the landlord.

you failed to grasp this when it was explained to you before a few times - a mortgage is inflation proof, rent is affected by inflation.

ukcarper

Modern 2 bed near me £200k rent £850

20% deposit leaves £160k mortgage £777 per month 5% 40 years

Legal and mortgage fees £4000 3% interest on £44k = £110 a week

Building insurance £10 a month

Therefore Mortgage £777 effective rent £850-£120 = £730

Lets say house prices stagnate rent increase at half present inflation 2%

Maintenance nobody knows but after 40 years renter would have spent £17k more than buyer. Buyer will have house renter will have to carry on renting, which would be £1.8k a month and increasing.

Of course inflation might not be 4% rents might not keep up and it is unlikely that house prices will stagnate for 40 years and mortgage interest rates stay the same.

wotsthat

Graham_Devon wrote: »

I think you are deliberately trying to confuse the situation here.

What's likely and unlikely is neither here nor there. You are jumping back to the "if's" you accused me of using.

In any case, if you want to start bringing moves into the equation, feel free to do so, as the renter will end up far better off.

I'm not gonna sit here arguing it out. Know better than that with you and your counterpart around. Do the sums yourself if you take issue, rather than taking issue with myself.

I did the sums that's why I bought a house. Mortgage nearly paid off and in my mid-forties - after the mortgage has gone it's all gravy.

People read this stuff you know Graham. To say that there's a 40 year breakeven on buying vs. renting is to mislead.

Graham_Devon

chucky wrote: »

so who do you think the tenant is going to rent from if has got nothing to do with the landlord?

do you really think that people will be renting one property for 39 years? he'll get moved on quite a few times by the landlord.

you failed to grasp this when it was explained to you before a few times - a mortgage is inflation proof, rent is affected by inflation.

Oh good lord.

I stated in my first post, the ONLY way, you can look at these figures is look at todays costs. You don't know what inflation is going to be in 10 years time. You don't know what the average rent is going to be in 10 years time. You don't know what the average interest rate is going to be in 10 years time. Let alone 40.

Therefore, it's impossible to take these factors into consideration, without looking 2-3 decades back and taking the average of those. Which, again, feel free to do so.

I openly admit, due to future market changes either on the rent side, mortgage side, or both, the sums could look very different at the end of a 40 year period. But we cannot calculate based on unknowns.

The amount of times the tenant is displaced makes absolutely no odds to the average rental costs. If the tenant is displaced 3 times 5 years, but continues to rent somewhere else at average rent, it doesn't make a jot of difference to the comparison. It doesn't cost the renter in mortgage fees, stamp duty, or legal fees. Therefore, it's merely a red herring. All that's up for dicsussion here is 12x average monthly rentals vs 12 x average monthly mortgage payments (times x number of years) plus all the extra costs of owning.

The very fact that you are trying to argue the above, rather bizzare argument when it comes to rent vs buying, shows me you are trying to simply confuse matters. Why, I dunno.

Graham_Devon

ukcarper wrote: »

Modern 2 bed near me £200k rent £850

20% deposit leaves £160k mortgage £777 per month 5% 40 years

Legal and mortgage fees £4000 3% interest on £24k = £110 a week

Building insurance £10 a month

Therefore Mortgage £777 effective rent £850-£120 = £730

Lets say house prices stagnate rent increase at half present inflation 2%

Maintenance nobody knows but after 40 years renter would have spent £17k more than buyer. Buyer will have house renter will have to carry on renting, which would be £1.8k a month and increasing.

Of course inflation might not be 4% rents might not keep up and it is unlikely that house prices will stagnate for 40 years and mortgage interest rates stay the same.

Unfair comparison really.

Straight away, you have knocked 20% off the total mortgage figures and given absolutely nothing to the renter. (interest for instance on that 20%).

Plus 2 bed for £850? Is that average? Seems pretty high to me!!

Do it again, with both on an even keel, one earning 3% interest on 40k for 40 years compounded, and suddenly the renter has an extra £92,600 you have failed to account for.

I'd suggest doing it again on averages. Not your street. However, even with the very high rent for a 2 bed, you have only calculated after 39 years that the renter is just 17k worse off. Less than one years average wages.

chucky

wotsthat wrote: »

People read this stuff you know Graham. To say that there's a 40 year breakeven on buying vs. renting is to mislead.

when people have such entrenched views it becomes like a religious mantra that is hard coded into his mind as you can see from his post below

Graham_Devon wrote: »

Oh good lord.

Graham_Devon wrote: »

The very fact that you are trying to argue the above, rather bizzare argument when it comes to rent vs buying, shows me you are trying to simply confuse matters. Why, I dunno.

not to confuse and it's not bizare at all. it's fact. but as i said in my previous post you never understood it then and i didn't expect you to understand it now. your post shows exactly why you missed the point completely regarding inflation.

so froth away trying to mislead people. it's not everyone elses fault that you got yourself into so much debt. so please stop trying to mislead people.