'We've reached a tipping point' Signs of house price weakness

Crashy_Time

padington wrote: »

Thanks, were did you learn this stuff ? Economics degree ?

Same school you learned to spell I think!

HAMISH_MCTAVISH

Crashy_Time wrote: »

Are you still smoking the crack pipe Hamish?

You'd have to be smoking crack to think it was a good idea to rent for the last 17 years....

Still, I'm sure your landlord is grateful that you bought him a house.....:D

Crashy_Time

HAMISH_MCTAVISH wrote: »

You'd have to be smoking crack to think it was a good idea to rent for the last 17 years....

Still, I'm sure your landlord is grateful that you bought him a house.....:D

The key is to save/invest the equivalent amount that you pay in rent each month. Things start to look much better when you do that. Most people either rent the house or rent the money that lets them stay in the house?

HAMISH_MCTAVISH

Crashy_Time wrote: »

The key is to save/invest the equivalent amount that you pay in rent each month. Things start to look much better when you do that.

Well that may be true, but rent is more than a mortgage in most of the UK, even with todays prices.

And rent is certainly more than a mortgage on a house bought 17 years ago....

In fact you could probably have paid off the mortgage by now with just the money you've spent on rent.

Crashy_Time

HAMISH_MCTAVISH wrote: »

Well that may be true, but rent is more than a mortgage in most of the UK, even with todays prices.

And rent is certainly more than a mortgage on a house bought 17 years ago....

In fact you could probably have paid off the mortgage by now with just the money you've spent on rent.

Rent very unlikely to be more than a repayment mortgage in most of the UK?


Many who bought 17 years ago have MEW`ed themselves senseless and are deep in the money pit?


I have shelled out about 81,600 in rent over the period. You might have bought a flat for cash at that amount 17 years ago, but if you factor in repairs and insurance plus bankers interest if you took out a mortgage it is a no brainer I`m afraid. Renting in my case has so far been the best choice.

Rota

Crashy_Time wrote: »

Rent very unlikely to be more than a repayment mortgage in most of the UK?


Many who bought 17 years ago have MEW`ed themselves senseless and are deep in the money pit?


I have shelled out about 81,600 in rent over the period. You might have bought a flat for cash at that amount 17 years ago, but if you factor in repairs and insurance plus bankers interest if you took out a mortgage it is a no brainer I`m afraid. Renting in my case has so far been the best choice.

Do you have some stats on how many have MEWed and how much?
Renting has been the best choice so far you say. Where will you live when you retire?

Insurance is next to nothing (about £15 a month) so you hardly count that as a "cost". Interest on a loan is how a loan works. When a mortgage is paid off the house is worth more than everything you have put in so I don't see the issue.

I've got a new question for the bears. At which point do you realise you are wrong? Is it 10, 15, 20 years or longer? That's a long time between drinks.

HAMISH_MCTAVISH

Crashy_Time wrote: »

Rent very unlikely to be more than a repayment mortgage in most of the UK?

If I had to rent my house I'd pay £400 a month more than my repayment mortgage.

Renting was more expensive from day one.

I have shelled out about 81,600 in rent over the period. You might have bought a flat for cash at that amount 17 years ago, but if you factor in repairs and insurance plus bankers interest if you took out a mortgage it is a no brainer I`m afraid. Renting in my case has so far been the best choice.

I think you are very wrong about that.

17 years ago the average house price in Scotland was around £52,000, and the average flat price in Scotland was around £30,000.

Even allowing for the fact that you're in Edinburgh, you could have bought a decent enough flat in the late 90's for under 40K.

Had you done so, the repayment mortgage payments to date would have totalled significantly less than your rent (don't forget the last 7 years have been at very low interest, and the first 10 years would have averaged 5% interest), so you could have paid the equivalent rent amount and cleared off the mortgage in full.

You would now own the flat outright and be paying no rent.

Insurance and repairs might be a few grand.... But they're not a huge amount of money, and I expect you'll have had a number of moving costs in there as a renter as well.

You really would need to be financially illiterate to think it was a better move to rent for the last 17 years than buy.

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

And I reckon the next boom will make the last one look tiny

As you know, I believe that buying is better than renting and have invested in BTL property as well.

I'm yet to be convinced that the market is ready for a surge to make the last boom look tiny.

Part of the fuel in house price expansion was availability of credit and whilst I can see population expansion increasing demand, I question whether there will be sufficient pay increases / credit expansion to support the HPI you are predicting.

Of course, there could be the situation where there is rampant HPI, but at lower volume of sales, in which we would probably also see increased BTL's and increased HMO's to balance the increase in people per property

In your own back yard, property has been increasing, but we have also seen a cooling in the labour market with companies cutting back on workforce and others putting a freeze on headcount.
We are seeing a reduction in opportunities for contractors to make high day rates, so this will ripple out into affordability to again fuel your HPI forecast.

I predict increasing house prices, just can't see the market reacting as it did in the late 90's early 00's

Percy1983

IveSeenTheLight wrote: »

As you know, I believe that buying is better than renting and have invested in BTL property as well.

I'm yet to be convinced that the market is ready for a surge to make the last boom look tiny.

Part of the fuel in house price expansion was availability of credit and whilst I can see population expansion increasing demand, I question whether there will be sufficient pay increases / credit expansion to support the HPI you are predicting.

Of course, there could be the situation where there is rampant HPI, but at lower volume of sales, in which we would probably also see increased BTL's and increased HMO's to balance the increase in people per property

In your own back yard, property has been increasing, but we have also seen a cooling in the labour market with companies cutting back on workforce and others putting a freeze on headcount.
We are seeing a reduction in opportunities for contractors to make high day rates, so this will ripple out into affordability to again fuel your HPI forecast.

I predict increasing house prices, just can't see the market reacting as it did in the late 90's early 00's

I would have to agree with this, I am not going to argue with house prices are going to go up but I can't see it being rampant and potentially won't even be more than inflation. Likewise I can see how long term renting can put you in a better position than buying, yes some may choose renting for mobility but if not you are surely wasting your time.

With the current sensible lending going on it won't be the free for all we had 2000-2007 where it was as simple as going to the bank and saying 'give me a mortgage'.

IveSeenTheLight

Percy1983 wrote: »

Likewise I can see how long term renting can't put you in a better position than buying, yes some may choose renting for mobility but if not you are surely wasting your time.

I take it you meant you can't see how long term renting can put you in a better position than buying.