Young unable to buy as rents soar

Graham_Devon

Jack_Johnson_the_acorn wrote: »

You and Graham can't both be this stupid.

ANSWER THESE QUESTIONS
How much Deposit is needed to get a rate of 1.5%?
Im guessing at least 30%

So why don't you read Andy's original assumptions then?

AndyGuil wrote: »

Deposit and repayments, (25% deposit is the average FTB amount in London).
15% - 1359 pcm
20% - 1243 pcm
25% - 1110 pcm

Were saying the same thing as you. You just don't appear to realise it. Were not saying you are wrong, we are saying you are correct, but that the sums above are wrong...therefore, you are "laughing out loud" at the wrong people.

He won't get the rates HE has used at those deposit level. So instead, he's used the introductory rates. And you can't assume those same rates will be there, or that you will be able to remortgage onto said introductory rates 2 years down the line. Something which he is assuming in his calculation.

HAMISH_MCTAVISH

aggypanthus wrote: »

Note that this thread was started by A scot...all this talk of rising rents doesnt apply here, we get £410 for a smart, big 2 bed, £345 for small 1 bed ! The latter has been the same for 5 yrs.

It may not apply in your area, but it most certainly does in much of Scotland.

Where I am you'd pay £650 for a 1 bed flat and £1000 for a 2 bed flat.

Rents and prices have been going up relentlessly for the last few years up here.

AndyGuil

Graham_Devon wrote: »

So why don't you read Andy's original assumptions then?



Were saying the same thing as you. You just don't appear to realise it. Were not saying you are wrong, we are saying you are correct, but that the sums above are wrong...therefore, you are "laughing out loud" at the wrong people.

He won't get the rates HE has used at those deposit level. So instead, he's used the introductory rates. And you can't assume those same rates will be there, or that you will be able to remortgage onto said introductory rates 2 years down the line. Something which he is assuming in his calculation.

When you go for a new mortgage you go for the tracker (much lower) or fixed rate. You don't hang about for the rate after the fixed period so you don't see those higher rates. Who knows 100% for sure what will happen in 2, 5, 10.. years time. We can look at history to help to give a confident estimate. The same is true for the rental market. I bet in 2 years time we will be talking the same things still and all that will have changed is people that own will have paid off a couple of years their mortgage, we probably will have had more HPI and rents will be more expensive. If you fear what will happen in a couple of years time then either fix for longer. If we feared little thing then we wouldn't leave our homes everyday.

HAMISH_MCTAVISH

HAMISH_MCTAVISH wrote: »

The average rent in June 2009 was £643. (LSL rent index)

The average rent in June 2014 is £747. (LSL rent index)

That's an increase of 16.1%.....

In a time when we've had high unemployment, recession, the worst financial crisis in a century, cuts to housing benefits, etc, rents have risen by 16% in just 5 years.

Given that rents are not funded by mortgage lending to renters, and benefits have been cut, how do you explain that one Graham if not through supply and demand?

How do you explain that one Graham if not through supply and demand?

Jack_Johnson_the_acorn

Graham_Devon wrote: »

So why don't you read Andy's original assumptions then?



Were saying the same thing as you. You just don't appear to realise it. Were not saying you are wrong, we are saying you are correct, but that the sums above are wrong...therefore, you are "laughing out loud" at the wrong people.

He won't get the rates HE has used at those deposit level. So instead, he's used the introductory rates. And you can't assume those same rates will be there, or that you will be able to remortgage onto said introductory rates 2 years down the line. Something which he is assuming in his calculation.

I said

"I'd guess that Graham 's scenario of cheaper to rent is correct in less than 1% of house purchases"

Nowhere have I mentioned Andy's figures.... I'm talking the 99% of house purchases not the 1% that are above 500k in the heart of the capital!

Surely it doesn't need explaining that property in the capital of one of
the most affluent cities in the world is going to be extremely expensive?!?!.

Or does it?

AndyGuil

Rent in the capital is very expensive too. I have found that rents are higher than mortgages in London.

aggypanthus

HAMISH_MCTAVISH wrote: »

It may not apply in your area, but it most certainly does in much of Scotland.

Where I am you'd pay £650 for a 1 bed flat and £1000 for a 2 bed flat.

Rents and prices have been going up relentlessly for the last few years up here.

Would that be north east? Or Edinburgh.
I mean central belt, even around Stirling or Cumbernsuld a 2 bed is from 500, not much more .

HAMISH_MCTAVISH

aggypanthus wrote: »

Would that be north east? Or Edinburgh.

North East. Although as you note also Edinburgh, and some of the better areas surrounding it as well.

Inverness is now also starting to look expensive to me, and I say that as someone from Aberdeen, where high prices and rents are a fact of life. Many parts of the Highlands and Islands are also rising quite strongly.

I mean central belt, even around Stirling or Cumbernsuld a 2 bed is from 500, not much more .

Well yes, but it's Cumbernauld.....

Seriously though, much of Glasgow is cheap, and the areas around it can be too.

But that's not representative of the rest of Scotland.

aggypanthus

Hamish, its the oil of course, I expect.
I helped my sister flathunting a few yrs ago, in the city, rather pricey for a buyer then.It was around the olde beechgrove gdn area.

HAMISH_MCTAVISH

aggypanthus wrote: »

Hamish, its the oil of course, I expect.

In all these areas, whether prices/rents are rising or falling, it's simply a matter of supply and demand.

The oil industry is a contributor to demand being strong in Aberdeen, other places such as Edinburgh and it's surrounds and the Highlands have their own factors, be that the tourism economy, the whisky industry, financial services, education, etc.

The areas where the economy is not as good tend to attract fewer people, so prices/rents don't rise as much or even fall.

It's always, all about supply and demand. There is nothing else.

And when we talk about these situations, like in the OP, we are talking about the nation on average.

There will always be differences between local areas, which is why Cumbernauld is cheap and Aberdeen is expensive. Or why Middlesbrough is cheap and London is expensive.

Each area has it's own balance between supply and demand, and that is what sets rents and house prices.