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'We've reached a tipping point' Signs of house price weakness
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What is going on here?
Basic maths from my own point of view.
I have signed up to a 25 year mortgage, lets say payments stay at £480 for the duration.
Ok its just cost me £144k for a £93k house (ignoring value of house in 25 years time).
I will be 53 when it is paid in full so going with a life expectancy of 80 I then have 27 years rent free.
Right now I could rent a similar house for £400, but lets just call that £350. for the sake of it, so from 28 to 80 thats £218.4k in rent (ignoring inflation.
So I can spend £144k and end up with a house 'only' worth £93k or I can spend £218.4k and have nothing.
Now lets be honest the rent figures will only go up, the value of my house will only go up and my mortgage payments will come down so if anything this post is understating the the gap by quite some margin.
By all means I disagree with Hamish on many things but with this there is no argument, you can't argue with basic maths.
That is your first mistake.0 -
Crashy_Time wrote: »Hamish, I bet you never thought that a flat sold for around 70k in central Edinburgh in 2004 would be trying to sell for around 70k today? So glad you are not my financial advisor.
And looking at those flats, the median rent appears to be around £550 a month.
But even on your claimed rent of £450, you'd have paid significantly less on a full repayment mortgage since then than you would to rent.... The capital gains, or lack thereof, are irrelevant.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
I am young (alot younger than all on this thread) and I live in London and luckily not in debt but where the hell am I going to buy? With what money? House price increases hurt 99% people.0
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If its well over £100k and its not sitting in your bank,
Actually, most of it is sitting in a combination of ISA and pension funds.
A very significant cash gain from buying instead of renting from the mid 00's until today.
That must really hurt you crashaholics to see.....:rotfl:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
But he doesn't have it now. He has to sell first! And then where will he live/buy/rent?????
It appears you have a reading comprehension problem as well as being financially illiterate.
Perhaps you should pop back over to HPC.... The discussion there might be more at your level.:)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Actually, most of it is sitting in a combination of ISA and pension funds.
A very significant cash gain from buying instead of renting from the mid 00's until today.
That must really hurt you crashaholics to see.....:rotfl:
Having never been on HPC web site I can't believe how blinkered these people are.0 -
No that's just the money he has saved on rent you people really are blind to the facts.
"Saved" maybe (but whos paying the mortgage?) but its stuck in the "equity" in his home. He doesn't have £100k sitting there ready to access. Thats why he has to sell first. Its not rocket science!0 -
What is going on here?
Basic maths from my own point of view.
I have signed up to a 25 year mortgage, lets say payments stay at £480 for the duration.
Ok its just cost me £144k for a £93k house (ignoring value of house in 25 years time).
I will be 53 when it is paid in full so going with a life expectancy of 80 I then have 27 years rent free.
Right now I could rent a similar house for £400, but lets just call that £350. for the sake of it, so from 28 to 80 thats £218.4k in rent (ignoring inflation.
So I can spend £144k and end up with a house 'only' worth £93k or I can spend £218.4k and have nothing.
Now lets be honest the rent figures will only go up, the value of my house will only go up and my mortgage payments will come down so if anything this post is understating the the gap by quite some margin.
By all means I disagree with Hamish on many things but with this there is no argument, you can't argue with basic maths.
That is your second mistaken assumption. My rent has increased by the mind boggling, bank busting, inflation beating figure of 50 quid, yes 50 pounds, per month in 17 years. The value of your house is more likely to drop now than at any time in the last 20 years, and if interest rates rise your mortgage payments will go up.0 -
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