SOD IT!!! I'm giving up and having a damn good holiday instead!!!

Graham_Devon

TheAble wrote: »

Anti renters always rattle on about paying rent is like throwing money away. But what's the difference between paying £6K in rent a year or paying £6K a year in mortgage interest on a £100K mortgage @ 6% (if you can get 6% these days). Plus the fact that when you own you have to pay buildings insurance, repairs, mortgage application fee every time you remortgage etc etc.

The money you save on that by renting you can put into some other investment, and by renting you can avoid tying up your capital.

After paying the mortgage, you own the house. Thats the biggest difference which people seem to have overlooked!

So imagine selling your house for 200k and then renting. You'd have 200k sitting in the bank making interest.

After all the years renting, what do you have at the end of it? Nothing.

Then theres the fact that rent will always be a certain amount. I..e say averages is now £500 for a 2/3 bed terrace. In 10 years time, it might be £1000 for that same terrace.

Your mortgage though, apart from interest rates, stays static. So in 10 years time you'll still be paying that £500 and better off than the renter. Of course, interest rates vary, but then its always a rate on the amount you borrowed.

So in 20 years time, you may be paying £2000 a month for that rental. But the person who bought is still paying £500, and got masses of equity in the house.

Buying a house is a different thing. And you could have 6 moths rent paid up front for the amount of JUST buying the house (fee's etc) but this is quickly, at least in this climate, ruled out by increased equity. And certainly down the line when your paying less each month than the renter.

James240

thesaint wrote: »

Kneel down and suckle my left one.:p

(Too any children reading, abuse isn't big, and it isn't clever)

whatever u idiot!

brasso

fimonkey wrote: »

Here's the rant.....

As a FTB with a good salary (30K) and good deposit (30K) I have finally been priced out of the market for the area I live in (Christchurch/ Bournemouth). All I want is a nice little 2 bed place with a private garden, but now all I can afford is a grotty 1 bed flat in an over-developed area, and this ridiculous further rise in property prices has happened in the past year!! (this time last year I could have afforded what I want, however this time last year my dear mother was alive and therefore I had no deposit together from the sale of her house recently).

So THAT'S IT! I'm OUT of this stupid game!!! Good luck to the suckers who intend to continue to work their assess off to afford a leasehold cupboard! Ha ha, skit! and no sympathy whatsoever from me IF there's a house market crash (I personally don't think there will be, but I'll be laughing the loudest if there is)!!

Meanwhile I'm taking my deposit and booking myself a damn good luxury holiday. :j My late mother would have wanted me to be happy, and a holiday will do just that! Then I'm gonna go buy a whole new wardrobe, and perhaps throw a couple of parties. Life is for living right? Well being a frugal-boring-old-paying-60%-of-my-salary-on-a-mortgage isn't what I call living!

And finally I feel relaxed!.... Off you all go now little ratties, carry on with your big important race!

Sorry, I've not read the whole thread so this point may already have been made, but it seems illogical for you to complain about the way prices have risen in the past year when your late mother's house has been sold in this same period. In other words, you will have benefited from the increase in value of her house, in exactly the same way that you've lost out on the value of property you wanted to buy. If the whole market has remained flat, yes, your target property would be cheaper but you would also have received less on the sale of your mother's house, therefore you would probably still be priced out.

Also, is it just me, or does it seem a bit undignified to crow about how you're going to blow all this cash on holidays etc -- money that you received as a consequence of your mother's death?

If you were a bit more canny, you could turn that £30K into an investment opportunity and stay well ahead of inflation in the housing market. HPI is on the wane in any case, and we are at or near the top of the market. So in fact, you have the best of both worlds. You've benefitted from the HP bubble, and are thinking about buying property just as it's starting to turn into a buyer's market.

But you seem too impatient and too short-sighted to understand this. You'll blow half the money and continue to complain, even when property will start to become affordable again in the next year or two. It's your financial myopia that will keep you priced out, not the state of the market.

If it's not too late, I'd urge you to try to think longer term, or you will bitterly regret it.

daisyroots_2

Brasso is right, just because we now see housing as a good investment, doesn't mean it's the only investment, and renting is only a wise option when you are investing elsewhere. An ISA is such an obvious first step for someone in your position, and then a high interest bond, or even Premium Bonds. But I think you just want an excuse to blow the money, so that's what you'll do.

wecanhelpu

Fim - I agree with brasso also.

I do not agree with the premium bonds suggestion though.

Think carefully about all your options before doing something you may later
regret.

TheAble

Graham_Devon wrote: »

After paying the mortgage, you own the house. Thats the biggest difference which people seem to have overlooked!

So imagine selling your house for 200k and then renting. You'd have 200k sitting in the bank making interest.

After all the years renting, what do you have at the end of it? Nothing.

You'd have the interest on the £200K less the rent you'd spent. Alternatively you could invest the money in a decent income fund and obtain around 5% a year plus growth, plus accumulation on the interest and growth as the years go by.

The point I'm trying to make is that there's other, often better, higher yielding forms of investment than property.

Graham_Devon

TheAble wrote: »

You'd have the interest on the £200K less the rent you'd spent. Alternatively you could invest the money in a decent income fund and obtain around 5% a year plus growth, plus accumulation on the interest and growth as the years go by.

The point I'm trying to make is that there's other, often better, higher yielding forms of investment than property.

Yes I know, and I myself have property and investments. Don't own my property, but could plough all money into it, but don't want to.

But, property isn't always an investment, it offers something else too, which you can never get in a rented place. A home.

lynzpower

Graham_Devon wrote: »

Yes I know, and I myself have property and investments. Don't own my property, but could plough all money into it, but don't want to.

But, property isn't always an investment, it offers something else too, which you can never get in a rented place. A home.

eh? Of course a rental place can be a home. Im here in my rented house, I much prefer it and feel more homely here than I ever did in the flat the bank owned?

PosterBoy77

Graham_Devon wrote: »

After paying the mortgage, you own the house. Thats the biggest difference which people seem to have overlooked!

So imagine selling your house for 200k and then renting. You'd have 200k sitting in the bank making interest.

After all the years renting, what do you have at the end of it? Nothing.

Then theres the fact that rent will always be a certain amount. I..e say averages is now £500 for a 2/3 bed terrace. In 10 years time, it might be £1000 for that same terrace.

Your mortgage though, apart from interest rates, stays static. So in 10 years time you'll still be paying that £500 and better off than the renter. Of course, interest rates vary, but then its always a rate on the amount you borrowed.

So in 20 years time, you may be paying £2000 a month for that rental. But the person who bought is still paying £500, and got masses of equity in the house.

Buying a house is a different thing. And you could have 6 moths rent paid up front for the amount of JUST buying the house (fee's etc) but this is quickly, at least in this climate, ruled out by increased equity. And certainly down the line when your paying less each month than the renter.

What you say held true years ago. However these days many terraces that you can rent for £500 per month cost 200k to buy. A repayment mortgage on such a property would cost in the region of £1250 per month at present.

This means that if someone could afford the cot of buying, they could choose to rent and save the difference of £750 per month. £750 per month with compound interest over a few years would be a fair bit of cash. At the moment it can make a great deal of sense to rent and put of buying till the figures make better sense.

keeperbear

lynzpower wrote: »

eh? Of course a rental place can be a home. Im here in my rented house, I much prefer it and feel more homely here than I ever did in the flat the bank owned?

How can it feel like a home when your landlord can legally force you to move in six months time? I feel more homely here in my flat than I ever did in the property that my landlord owned.

After years of renting you end up with nothing to show for your money. After years of paying a mortgage (which you can overpay to reduce the payments) you own your property.

I suspect that someone will talk about renting being cheaper blah, blah. However, trying comparing the cost of renting versus buying over 40 to 50 years. A total no brainer decision in favour of buying. Immediately before I bought my flat in 1996, the rent per month on my old flat was £625. The same sized flat now rents out at £850 per month if you can find one available. In that time my mortgage payments have gone from £720 per month to NOTHING. I now now 36 years old, have no rental costs to pay in retirement and have over 200k of equity. If I rented, I would still be paying £10,200 of rent per annum. That is £17,000 of pre-tax income (at 40% tax) that I no longer have to earn to pay my rent. I also have no crappy landlord.