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

ukcarper

http://www.rightmove.co.uk/property-for-sale/property-46652242.html?premiumA=true

Here a flat for £63k which would cost £372 a month at 5% over 25 years cheaper than the rents linked to and you own flat after 25 years.

gallygirl

ukcarper wrote: »

http://www.rightmove.co.uk/property-for-sale/property-46652242.html?premiumA=true

Here a flat for £63k which would cost £372 a month at 5% over 25 years cheaper than the rents linked to and you own flat after 25 years.

Hardly comparable though........... i.e. I'd be prepared to live in that one unlike the rental properties .

ukcarper

gallygirl wrote: »

Hardly comparable though........... i.e. I'd be prepared to live in that one unlike the rental properties .

Looks quite nice but I don't know area but if you had the 10% deposit and could get a 4% mortgage the cost would be £300 a month.

lisyloo

I'd be prepared to live in that one

If you don't know the area then that's a bit of a sweeping statement.
There will almost certainly be a reason it's cheap. Probably lack of infrastructure (at least 1.6 miles from a railway station and that's usually quoted as the crow files) or the area is rough.

I was looking at flats in London and found some at around £200K which looked quite reasonable, but when I looked into it further there's a good chance of living next door to a crack den, having bars on the windows or getting assaulted on your commute. (I'm now renting somewhere that's worth about £450K and that's a 1 bed flat but lots of people would like to live there because it's nice).

I don't know this area either but my gut feeling is that if it's cheap then there's a reason that most people don't want to live there.

It may well be comparable with the place being rented but I don't think you can say you'd be prepared to live there from the info presented on that link.

ukcarper

lisyloo wrote: »

If you don't know the area then that's a bit of a sweeping statement.
There will almost certainly be a reason it's cheap. Probably lack of infrastructure (at least 1.6 miles from a railway station and that's usually quoted as the crow files) or the area is rough.

I was looking at flats in London and found some at around £200K which looked quite reasonable, but when I looked into it further there's a good chance of living next door to a crack den, having bars on the windows or getting assaulted on your commute. (I'm now renting somewhere that's worth about £450K and that's a 1 bed flat but lots of people would like to live there because it's nice).

I don't know this area either but my gut feeling is that if it's cheap then there's a reason that most people don't want to live there.

It may well be comparable with the place being rented but I don't think you can say you'd be prepared to live there from the info presented on that link.

Don't you think that would apply to the cheapest rents as well. The only properties to rend in area are 2 beds for £600 a month.

lisyloo

Don't you think that would apply to the cheapest rents as well.

Yes - that's why I said "it may well be comparable with the place being rented".
But I don't think anyone can say it's "hardly comparable" and preferable without knowing the area.
You simply cannot tell from details whether an area is nice or rough (unless of course you know it).

I do 100% agree that comparables should be used.

ukcarper

lisyloo wrote: »

Yes - that's why I said "it may well be comparable with the place being rented".
But I don't think anyone can say it's "hardly comparable" and preferable without knowing the area.
You simply cannot tell from details whether an area is nice or rough (unless of course you know it).

I do 100% agree that comparables should be used.

I think that if people link to lowest priced properties to rent it acceptable to use lowest property's for sale. If you want to rent for 15 to 20 years paying more in rent than mortgage payments it's up to you and I can see reasons why you might want to do that. But to argue that it's cheaper doesn't make sense.

lisyloo

I think that if people link to lowest priced properties to rent it acceptable to use lowest property's for sale.

I agree.
It's gallygirl who's saying it's "hardly comparable" not me :-)

If you want to rent for 15 to 20 years paying more in rent than mortgage payments it's up to you

Certainly not me.

and I can see reasons why you might want to do that

I'm struggling a little more than you. I can't really see why you'd WANT to rent long term although I can see why the trials and tribulations of life might turn out that way.

But to argue that it's cheaper doesn't make sense.

Long term there is no argument at all. Buying is cheaper than renting.
If landlords make a profit (which on the whole they do) then buying HAS to be cheaper.
The only way renting can be cheaper is if you go downmarket and rent a hovel in which case you aren't comparing apples with apples.

Not sure why you are quoting my posts when we're in total agreement ???

lisyloo

But to argue that it's cheaper doesn't make sense.

Just one small point.
If someone self-employed lives away from home for <24 months, then they can claim their rent as business expenses.
VAT & Corporate tax don't make it simple but that's about a 30% discount over paying your rent from NET income.

I realise this will only apply to some and only for a short period, but just thought I'd mention it as there are a lot of generalised "renting is dead money", "buying is cheaper than renting" quotes bandied around which are not correct 100% of the time.

Long term there is absolutely no argument in my mind (assuming you're not moving regularly).

gallygirl

lisyloo wrote: »

I agree.
It's gallygirl who's saying it's "hardly comparable" not me :-)

Certainly not me.

I'm struggling a little more than you. I can't really see why you'd WANT to rent long term although I can see why the trials and tribulations of life might turn out that way.

I agree the area is most important - but going along with the theory that the cheapest rents and cheapest purchase prices are in the same areas (which these ones are). I should have made it clear I was talking about interiors as the one for sale is much more spacious and attractive.

lisyloo wrote: »

Just one small point.
If someone self-employed lives away from home for <24 months, then they can claim their rent as business expenses.
VAT & Corporate tax don't make it simple but that's about a 30% discount over paying your rent from NET income.

I realise this will only apply to some and only for a short period, but just thought I'd mention it as there are a lot of generalised "renting is dead money", "buying is cheaper than renting" quotes bandied around which are not correct 100% of the time.

Long term there is absolutely no argument in my mind (assuming you're not moving regularly).

This is a good point for mid-high end properties :T (and someone on this or a similar threads is doing just that in London). I don't Corporation Tax is much of a concern for someone renting those studios though .