Nationwide September -0.4%

SteveV2

brit1234 wrote: »

That's great news, didn't house prices with Nationwide fall the year before and year before that.

These falls must be a lot bigger when you take London out of the figures.

And a lot smaller if you take the north out.

HAMISH_MCTAVISH

Ah ha!

The quarterly regional numbers are out too.

Aberdeen +4% year on year.

:beer:

Abatement

DpchMd wrote: »

So let's pretend my house has been impacted by the average 1.4% fall YoY.

It was worth around 210k a year ago which means it's now worth 207k. Gulp, I've just lost 3k

Mortgage is about 1k a month with about 300 quid interest pm inclusive. So not only have I lost 3k in value, but I've also lost 3.6k in interest bringing my total loss to 6.6k. Ouch.

But, if I was to have rented this property it'd still cost about a grand a month, so I would have "lost" 12k. So I'm very roughly 5.4k better off by buying, even though house prices have gone down.

Is that right? Have I screwed up somewhere?

Gin and tonics all round?

I wouldn't say you've screwed up, but your assumptions aren't valid for everyone. You're assuming a low mortgage interest rate, a pretty decent rental yield, and ignoring the lost interest on your chunk of equity and other miscellaneous housing costs (repairs, insurance etc)


Tweaking the assumptions:

Assuming you could rent it for, say, £900 x 12 = 10600

vs

Assuming a 4% mortgage rate on 170k = £6800
Assuming you could get 3% if you put the 40k equity in the bank = £1200
Plus the 3k loss in value
Total = 11k (plus maintenance, repairs, insurance etc etc)

(I'm not saying my assumptions are necessarily better than yours overall, but they are realistic for at least some people)

DpchMd

Abatement wrote: »

I wouldn't say you've screwed up, but your assumptions aren't valid for everyone. You're assuming a low mortgage interest rate, a pretty decent rental yield, and ignoring the lost interest on your chunk of equity and other miscellaneous housing costs (repairs, insurance etc)


Tweaking the assumptions:

Assuming you could rent it for, say, £900 x 12 = 10600

vs

Assuming a 4% mortgage rate on 170k = £6800
Assuming you could get 3% if you put the 40k equity in the bank = £1200
Plus the 3k loss in value
Total = 11k (plus maintenance, repairs, insurance etc etc)

(I'm not saying my assumptions are necessarily better than yours overall, but they are realistic for at least some people)

Thanks, I'll put the gin back in the cupboard!

HAMISH_MCTAVISH

DpchMd wrote: »

Thanks, I'll put the gin back in the cupboard!

Unless you live in Aberdeen.....

Where it's time for doubles all around. :beer:

200K house, plus 4% = £8K gain in the last year.

Plus the gain from buying versus renting on a pre-2008 mortgage.

So 6% yield = 12K, minus 2.5% mortgage interest, = 5K, for net gain of £7K.

£7K + £8K = £15K.

£15K tax free in a year just for living in a house.

Not a bad gig if you can get it......:rotfl:

Thrugelmir

DpchMd wrote: »

But, if I was to have rented this property it'd still cost about a grand a month, so I would have "lost" 12k. So I'm very roughly 5.4k better off by buying, even though house prices have gone down.

Is that right? Have I screwed up somewhere?

Would you consider renting it though?

If you were getting nothing for your money.

In the back of your mind do you believe that house prices must rise in the future?

DpchMd

Thrugelmir wrote: »

Would you consider renting it though?

If you were getting nothing for your money.

In the back of your mind do you believe that house prices must rise in the future?

I don't know what you're on about mate

Graham_Devon

HAMISH_MCTAVISH wrote: »

£15K tax free in a year just for living in a house.

Not a bad gig if you can get it......:rotfl:

Which you can't, without selling up.

Which would cost legal fees, eating into your profit.

Plus theres the tiny issue of you having ignored the legal fees and stamp duty when moving in, eating into your profit.

Not saying buying a house isn't currently the best way...it is. But these sums? They just get worse and worse, and leave more and more out the closer the results get.

DervProf

HAMISH_MCTAVISH wrote: »

Unless you live in Aberdeen.....

Where it's time for doubles all around. :beer:

200K house, plus 4% = £8K gain in the last year.

Plus the gain from buying versus renting on a pre-2008 mortgage.

So 6% yield = 12K, minus 2.5% mortgage interest, = 5K, for net gain of £7K.

£7K + £8K = £15K.

£15K tax free in a year just for living in a house.

Not a bad gig if you can get it......:rotfl:

Hamish, in another thread you recently started, you claim that rising house prices are the way to start improving the economy. You seem to think that everyone can enjoy the same gain (on paper) in the value that you have seen in your property. In reality, you know this isn't really possible. There'll always be winners and losers in what you crave, and you are pretty sure you'll be one of the winners, hence your constant fixation that HPI is the cure for everything.

1 Trick Pony springs to mind.