ONS- June: +2.3%

DervProf

HAMISH_MCTAVISH wrote: »

Here's the relevant part for you DP, as you still seem to be confused....

Except of course, people need a place to live, and you can't live in £10K worth of Gold bullion....... so had he not bought the house, he'd have needed to pay rent.

A 6% rental yield (typical for Aberdeen) on £200,000 for 5 years = £60,000.....

And in that same time he'd have been able to average around 3.0% or so in mortgage interest.

So the gain from buying versus renting is now £42,000.... Which beats the alternative, ie, a £14,700 profit from investing the depsoit in Gold in 2007, hands down.

Blah, blah, blah.

The relevant part is the "so far so good, right ?" statement.

When someone says or types "so far so good, right ?", I take that as them asking me to consider what they have previously stated, not what they may or may not say next. I answered your question by telling you (and proving) that what you had previously typed was wrong.

And you have the cheek to make the accusation of "muddling" :rotfl:.

DervProf

OK Hamish, this'll rile you even more.

Take a middle aged person who has nearly paid off their mortgage (on a decent property in Aberdeen), who has, say £100K in savings. It's 2007, and they are considering investing their money somewhere for their future. They hear the arguments for investing in BTL, but they are seeing the credit crunch kicking off, and hear reports from several commentators that gold could be a good place to protect, and indeed increase the value of their savings.

As of today, which investment would have made them the most profit ?

Silly question really, you'll no doubt convince me (with some rather dubious workings) that the BTL investment would now make them much better off.

I look forward to your, no doubt, laughable response in the morning.

I'll leave you to dream about interest free mortgages and zero stamp duty.

ukcarper

DervProf wrote: »

OK Hamish, this'll rile you even more.

Take a middle aged person who has nearly paid off their mortgage (on a decent property in Aberdeen), who has, say £100K in savings. It's 2007, and they are considering investing their money somewhere for their future. They hear the arguments for investing in BTL, but they are seeing the credit crunch kicking off, and hear reports from several commentators that gold could be a good place to protect, and indeed increase the value of their savings.

As of today, which investment would have made them the most profit ?

Silly question really, you'll no doubt convince me (with some rather dubious workings) that the BTL investment would now make them much better off.

I look forward to your, no doubt, laughable response in the morning.

I'll leave you to dream about interest free mortgages and zero stamp duty.

Going back to Hamish’s example why do you keep mentioning interest free mortgage.

ukcarper

If you had bought with a £10k deposit instead of renting you would have been £42k - £14.7k = £27.3k better off.

At 5% that £42k would reduce to £24.5k so you would be would be £9.2k better off.

Stamp duty and legal fees say £2.8k invest that in gold now worth £7k so still £2.2k better off.

DervProf

ukcarper wrote: »

If you had bought with a £10k deposit instead of renting you would have been £42k - £14.7k = £27.3k better off.

At 5% that £42k would reduce to £24.5k so you would be would be £9.2k better off.

Stamp duty and legal fees say £2.8k invest that in gold now worth £7k so still £2.2k better off.

Fair enough.

I still don't see why Hamish had to muddle the debate by not correcting his mistake. Why is it that property bulls often can't or won't admit they made a mistake, or correct their errors ? In this case, it seems Hamish has conveniently "forgotten" a few important factors to enhance his argument.

Mr._Pricklepants

DervProf wrote: »

Why is it that property bulls often can't or won't admit they made a mistake, or correct their errors ? In this case, it seems Hamish has conveniently "forgotten" a few important factors to enhance his argument.

Not just the bulls, prof.
Earlier in this thread I asked brit1234 for a link when he stated that LR was on the verge of going negative.

brit1234 wrote: »

Lets see what Land Registry say in 2 weeks, they are on the verge of going negative.

Mr._Pricklepants wrote: »

Link please?

Or do you just feel it in your bones?

Still waiting for an answer. Do you think I'll get one?

ukcarper

DervProf wrote: »

Fair enough.

I still don't see why Hamish had to muddle the debate by not correcting his mistake. Why is it that property bulls often can't or won't admit they made a mistake, or correct their errors ? In this case, it seems Hamish has conveniently "forgotten" a few important factors to enhance his argument.

He didn't make a mistake he just did what most people on here do he picked his figures to enhance his point.

I'm sure you could put forward a good argument against his case it's just that his calculations used 3% not 0%.

DervProf

ukcarper wrote: »

He didn't make a mistake he just did what most people on here do he picked his figures to enhance his point.

I'm sure you could put forward a good argument against his case it's just that his calculations used 3% not 0%.

Eh ?

I buy a house (in Aberdeen) for £200K, with a £10K deposit and a £190k mortgage @3.5% (you may do the calculations with 3% if you wish, but I used a more realistic 3.5%). 5 years pass by, and my house is now valued 6% higher. Only taking into consideration the mortgage payments, how much profit would I make if I sold the property ?

You could show me the calculations based on Interest only as well as a repayment mortgage if you wish.

DervProf

Mr._Pricklepants wrote: »

Not just the bulls, prof.
Earlier in this thread I asked brit1234 for a link when he stated that LR was on the verge of going negative.

Still waiting for an answer. Do you think I'll get one?

Probably not.

There seems to be a reluctance to accept or correct an obvious mistake by a few forum members. It's a shame really, because I have a lot of respect for anyone who says "sorry, I got that wrong". I like to think I do it myself when it's quite obvious that what I stated was incorrect. Hamish is bullish on house prices, and I look at things from a different angle (more bearish, I suppose). No doubt we could debate/discuss/argue the pros and cons of HPI forever (and that's fair enough), but when one side starts quoting figures that just don't make sense, then you know they're losing the argument or are lacking in the maths department.

ukcarper

DervProf wrote: »

Eh ?

I buy a house (in Aberdeen) for £200K, with a £10K deposit and a £190k mortgage @3.5% (you may do the calculations with 3% if you wish, but I used a more realistic 3.5%). 5 years pass by, and my house is now valued 6% higher. Only taking into consideration the mortgage payments, how much profit would I make if I sold the property ?

You could show me the calculations based on Interest only as well as a repayment mortgage if you wish.

If you want to use repayment I will be £950 saving £50 a month on rent total over 5 years £3000

Capital paid of over 5 years £26k Total £29k

Interest only £555 a month saving £475 Total £28.5k

These are at 3.5%