An entire generation locked out of property ownership

wotsthat

Graham_Devon wrote: »

I've never argued any different. I've not argued mortgaging isn't better in the long term. I only stated it would be better to rent than to take a 40 year mortgage at present. Which, as I said it, caused a raucous, and then, all this.

Well the figures show that the opposite is likely to be true even on a 40 year mortgage.

That assuming that our renter has a deposit but chooses to save and receive interest rather than rent. It's a requirement for a fair like for like comparison but it doesn't seem very real world.

Graham_Devon

ukcarper wrote: »

Well a good rate after tax would be 3% renter will have £40k deposit and £4k fees £44k use the interest to reduce rent therefore £1320 interest divided by 12. Of coarse if you are using interest to pay rent you will still only have £44k at the end of £40 years

I think what we can agree on, is that my original statement, about the media working out, was pretty darn close to what we have concluded here....even without doing a full and proper calculation.

We can talk about what if's all day long. What if they are using interest to pay rents and so on.

But basis of it is, your working out only left the renter 17k disadvantaged.

However, they still have 40k in the bank, and somewhere along the lines, they lost £70 a month interest through your calculations (£33,600).

Therefore, at the end of the day, your calculations, taking the initial 40k (which the purchaser already used) and the extra "lost" £33,600, puts the renter actually £56,600 ahead at year 40 (what happens after that is another matter, and again, hit with loads of different what ifs, such as free residentail care vs selling off the house for the same thing!! minefield!).

Either way, I think my initial point has been proven. Secondly, thankyou for actually running through the maths insteaf just throwing stupid lines all over the place.

After all that, i still side on buying. But do think 40 year mortgages are a bit stupid. let's face it, people move. That 40 year mortgage vs 40 year renting becomes a while lot more expensive after a couple of moves for the mortgagegee.

Graham_Devon

wotsthat wrote: »

Well the figures show that the opposite is likely to be true even on a 40 year mortgage.

That assuming that our renter has a deposit but chooses to save and receive interest rather than rent. It's a requirement for a fair like for like comparison but it doesn't seem very real world.

I'm not sure why we have to assume that the renter would use savings to pay their rent and the mortgagee would use earned income.

Lot of bias going into that calculation.

ukcarper

Graham_Devon wrote: »

I think what we can agree on, is that my original statement, about the media working out, was pretty darn close to what we have concluded here....even without doing a full and proper calculation.

We can talk about what if's all day long. What if they are using interest to pay rents and so on.

But basis of it is, your working out only left the renter 17k disadvantaged.

However, they still have 40k in the bank, and somewhere along the lines, they lost £70 a month interest through your calculations (£33,600).

Therefore, at the end of the day, your calculations, taking the initial 40k (which the purchaser already used) and the extra "lost" £33,600, puts the renter actually £56,600 ahead at year 40 (what happens after that is another matter, and again, hit with loads of different what ifs, such as free residentail care vs selling off the house for the same thing!! minefield!).

Either way, I think my initial point has been proven. Secondly, thankyou for actually running through the maths insteaf just throwing stupid lines all over the place.

After all that, i still side on buying. But do think 40 year mortgages are a bit stupid. let's face it, people move. That 40 year mortgage vs 40 year renting becomes a while lot more expensive after a couple of moves for the mortgagegee.

No the renter will have £40k-£17k =£23k.

The buyer could sell his house for £200k so let assume he spent £30k on maintenance and it cost him £10k to sell he would have £160k and could go and rent a similar house to the renter with an extra £127k in his pocket.

wotsthat

Graham_Devon wrote: »

Therefore, at the end of the day, your calculations, taking the initial 40k (which the purchaser already used) and the extra "lost" £33,600, puts the renter actually £56,600 ahead at year 40 (what happens after that is another matter, and again, hit with loads of different what ifs, such as free residentail care vs selling off the house for the same thing!! minefield!).

£56,000 ahead and minus a £200,000 house.

Your point's proven when you've found the renter another £144,000. Keep going though - that £17,000 down has already turned into £56,000 ahead so not far to go.

ukcarper

Graham_Devon wrote: »

I'm not sure why we have to assume that the renter would use savings to pay their rent and the mortgagee would use earned income.

Lot of bias going into that calculation.

Like not allowing for any HPI.

Graham_Devon

ukcarper wrote: »

Like not allowing for any HPI.

And not allowing for any savings interest increases either.

Nor allowing for any falls in property prices, or rental prices.

Nor allowing for any moves.

Come on, you can't allow for HPI, but only allow for todays interest when it comes to savings. That's why you have to stick to a certain set of figures.

The argument that we should allow only some inflation, but keep the savings on 3% is stupid.

I've thanked you for sitting down and working things out, but seems now you are accusing me of having bias, when all along I have treated the mortgagee, the same as the renter and looked at todays figures....the ones we can actually do sums on.

If you are going to factor in unknown HPI, then I'll just throw in "and what about possible 15% savings rates?". "What about possible falls in housing".? What about possible 9% mortgage rates"? "What about a central heating system that fails twice".

Destroy the conversation and turn it into a ping pong sessions between the usuals once again.

No the renter will have £40k-£17k =£23k

Plus the 30 oddk you seem to have mislaid somewhere. Why ignore this?

Percy1983

Is it just me who tinks the financials make little difference.

To me its about owning a place to call home and not being at the mercy of LL when its involves my childrend future (EG having to move schools often).

THe end of the day I won't have to pay rent in my older days to which my children will inherit something or it will be sold to look after me.

The point is ever if it does cost me more in total (which I doubt) I will have a house I can truely call home.

ukcarper

Graham_Devon wrote: »

And not allowing for any savings interest increases either.

Nor allowing for any falls in property prices, or rental prices.

Nor allowing for any moves.

Come on, you can't allow for HPI, but only allow for todays interest when it comes to savings. That's why you have to stick to a certain set of figures.

The argument that we should allow only some inflation, but keep the savings on 3% is stupid.

I've thanked you for sitting down and working things out, but seems now you are accusing me of having bias, when all along I have treated the mortgagee, the same as the renter and looked at todays figures....the ones we can actually do sums on.

If you are going to factor in unknown HPI, then I'll just throw in "and what about possible 15% savings rates?". "What about possible falls in housing".? What about possible 9% mortgage rates"?

Destroy the conversation and turn it into a ping pong sessions between the usuals once again.

I did allow for interest on savings I reduced the rent by that amount. I tried to do it as fairly as possible I only allowed for rent increases at less than half of present inflation figures and I picked the lowest rent.

Of coarse it’s not accurate for some all sorts of things could have happened.

Graham_Devon

ukcarper wrote: »

I did allow for interest on savings I reduced the rent by that amount. I tried to do it as fairly as possible I only allowed for rent increases at less than half of present inflation figures and I picked the lowest rent.

Of coarse it’s not accurate for some all sorts of things could have happened.

I meant you have complained I didn't allow for any possible HPI.

What I am saying is that I also didnt allow for any possible changes in interest rates for the 40k savings. (3% is low by any historial standard but it's todays rate so I never raised an issue).

If people want to throw the HPI curveball in, then I'll throw saving interest rates curveballs in. THIS is why it's stupid trying to factor in future unknowns.

Therefore, I'm not be biased. I haven't accused you of being biased, but seems you don't like the fact I'm not allowing for HPI (which makes absolutely no difference to the costs of the mortgage anyway....only to the end product which I've already agreed on, 3 times now, is beneficial, but its not cash that can be spent).