mortgages are dead money!

Jim_B_3

saxy1 wrote:

Renting is lining someone elses pocket, buying the property is 'eventually' yours.

Likewise it's just stupid to buy food; you're just giving your money to the supermarkets.

Snow_Dog

Actually I must confess to have skipped over a lot of the posts in this thread having just picked up on your first post where you suggested 0 HPI and 0 rent inflation over 25 years as being a strange comparison.

As far as whether I agree with your arguments or not, then to clarify. Yes I believe there is a time and place to rent and a time and place to purchase. I personally think that ftb's at the moment should not enter the property market as it appears to be so stretched. However I formed that opinion in 2004 and am quite surprised at the continuing trend upwards.

I am also aware of the arguments that have been used for and against buying/renting and find it slightly annoying to see an oversimplification of the factors involved as your post appeared to be initially.

PS were you at uni at the time as most of the economists that appeared so surprised by the recent rate rises, if so I would be going back and tracking down the tutor and asking them some very serious questions.;)

MJMum

I was very surprised by the OP's stats. It's normally cheaper to rent from the bank (ie mortgage) than from a LL - at least, in my experience. Plus, I like a gamble (that prices will rise)

roswell

As before its all about research some times its cheaper (mortgage) sometimes its cheaper to rent off a LL, making the right choice at the time for your needs is the only answer.

Woby_Tide

devils_advocate wrote:

I'm sure its so blindingly obvious that you didn't point it out, but if there's no wage or price inflation you wouldn't be paying 5.25% on your mortgage either! Seems like my attempts to level the playing field make my comparison more valid than yours.:D

hmmm....and then reading your further replies you suggest that other people are "taking an assumption out on one side and forgetting to apply it to the other"


yet you give us an example where mortgage and savings rates are affected by inflation, yet wages and house prices aren't. If you include wage inflation, apparently the renter can put the wage increase aside further building their 'investment', I didn't realise a homeowner would be exempt from a wage increase at the same time (I mean as the mortgage rate isn't changing they can pump the extra wages into savings, or pay off the mortagage early)

this economics degree then was it "The economics of truth"?


(actually I forgot in my assumptions, the homeowner got so thoroughly depressed at the size of their mortgage they whacked their wage increase on lottery tickets and hit the big one, so they're now £4m better off than renting, to compensate on the other side the renter went for 10 homes on Littlewoods pools and got £40k)

saxy1

Jim_B wrote:

Likewise it's just stupid to buy food; you're just giving your money to the supermarkets.

Hardly the same comparison, but thanks anyway!

:hello: