ONS- June: +2.3%

DervProf

ukcarper wrote: »

Can yo show me where.

Indeed I can.

Hopefully you can now see it. It's red and it's in bold.

HAMISH_MCTAVISH wrote: »

A buyer in Aberdeen in 2007 takes a 10K deposit and buys a 200K house.

Today, that house would be worth £212K. So a profit of £12,000.

Had he instead taken the 10K and bought Gold, that Gold would be worth £24,700. So a profit of £14,700.

So far so good, right?

That, to me, is clear as day. Hamish is asking me to consider if what he had typed so far was accurate.

It was not, so I pointed this out. I have since been told that I have to take the whole post into consideration. This reminds me some of the recent Open University course books that I studied. Some of the text was shockingly cyptic and badly written . Some parts wouldn't make any sense until you read several of the following paragraphs. This left me thinking that some thing could have been explained in a way that would have been far easier to understand.

I wonder if Hamish wrote any of those course books ?

ukcarper

I’ll try and clear things up.

If someone in Aberdeen put off buying in 2007 invested their 5% deposit and rented until now if they had bought gold with that £10k in would now be worth £24.7k

If they had bought a £200k house with a 10% deposit at 3.5% deposit on a repayment mortgage they would have saved £3000 in rent and paid off £28k of their mortgage. Leaving them with owing £162k on a house worth £212k leaving equity of £50k so ignoring the £3k they have saved in rent they are over £25k better off. If you are going to buy you would need to pay stamp duty etc at some time anyway but ignoring that the £3k saving in rent would cover it.

So would you be better off putting off buying or buying in 2007.

If you just have £10k to invest you could buy a BTL and get the tenant to pay £28k of your capital as well as getting the £12k hpi not something I would do but it looks like it would have worked out ok but that and putting all your money in gold are both high risk without the benefit of hindsight.

　

ukcarper

DervProf wrote: »

Indeed I can.

Hopefully you can now see it. It's red and it's in bold.



That, to me, is clear as day. Hamish is asking me to consider if what he had typed so far was accurate.

It was not, so I pointed this out. I have since been told that I have to take the whole post into consideration. This reminds me some of the recent Open University course books that I studied. Some of the text was shockingly cyptic and badly written . Some parts wouldn't make any sense until you read several of the following paragraphs. This left me thinking that some thing could have been explained in a way that would have been far easier to understand.

I wonder if Hamish wrote any of those course books ?

I suppose technically he should have said an increase of £12k but to just take out one part of the post and ignoring the rest is real nitpicking. As he explain in the same post why the £12k was profit.

DervProf

ukcarper wrote: »

I suppose technically he should have said an increase of £12k but to just take out one part of the post and ignoring the rest is real nitpicking. As he explain in the same post why the £12k was profit.

I can now see that he explained it in the rest of the post. I wasn't nitpicking, although now I understand more clearly what Hamish was trying to convey, it may seem that way. I still don't see why he didn't just correct himself, or even explain it more clearly in the first place.

Graham_Devon

ukcarper wrote: »

I’ll try and clear things up.

If someone in Aberdeen put off buying in 2007 invested their 5% deposit and rented until now if they had bought gold with that £10k in would now be worth £24.7k

If they had bought a £200k house with a 10% deposit at 3.5% deposit on a repayment mortgage they would have saved £3000 in rent and paid off £28k of their mortgage. Leaving them with owing £162k on a house worth £212k leaving equity of £50k so ignoring the £3k they have saved in rent they are over £25k better off.

　

Yes, you are correct.

You appear to have doubled the outlay for the house deposit though.

HAMISH_MCTAVISH

DervProf wrote: »

I can now see that he explained it in the rest of the post.

Finally......

ukcarper

Graham_Devon wrote: »

Yes, you are correct.

You appear to have doubled the outlay for the house deposit though.

Yes typing error I used £190k in calculations but said 10% in second paragraph by mistake

Graham_Devon

ukcarper wrote: »

Yes typing error I used £190k in calculations but said 10% in second paragraph by mistake

Well thankfully the calculations are now proven.

Don't wish to be pedantic, but although you have now proven what was meant, all that leaves is:

- The fact a 3.5% repayment mortgage in 2007 was simply not available. The base rate was over 5%.

- The fact that all legal fee's are ignored.

- The fact that the person investing in gold can take and use his cash, whereas the person invested in the house as a home would have to sell up and live on the streets to make use of the cash.

- The fact that it's still a levereged investment vs a cash only investment.

Apart from that, I can see what you and Hamish mean. I guess the only route to go down now, is to carry on the ignorance and pretend this argument never happened and get on with another thread.

ukcarper

Graham_Devon wrote: »

Well thankfully the calculations are now proven.

Don't wish to be pedantic, but although you have now proven what was meant, all that leaves is:

- The fact a 3.5% repayment mortgage in 2007 was simply not available. The base rate was over 5%.

- The fact that all legal fee's are ignored.

- The fact that the person investing in gold can take and use his cash, whereas the person invested in the house as a home would have to sell up and live on the streets to make use of the cash.

- The fact that it's still a levereged investment vs a cash only investment.

Apart from that, I can see what you and Hamish mean. I guess the only route to go down now, is to carry on the ignorance and pretend this argument never happened and get on with another thread.

I did take account of Legal fees saving on rent £3k.

I've already said you could argue the figures Hamished used but his reasoning was correct.

What I am saying is that if you are renting want to buy and can afford to buy it is better to buy that invest your deposit in one asset and hope that rises and house prices fall.


If you are living rent free or with very low rent and are happy where you are you might as well stay where you are and save a bigger deposit although I wouldn't advise speculating that deposit on one asset.

DervProf

HAMISH_MCTAVISH wrote: »

Finally......

And not a peep from you about your badly worded post, and misuse of the word profit.

Still, you still can't deny that gold has gone up in value much more than Aberdeen property over the past 5 years. Well, you can deny it, but 147% is a much larger increase than 6% (without Hamish seasoning).