Rents soar to (another) record high

HAMISH_MCTAVISH

Crashy_Time wrote: »

http://www.rightmove.co.uk/property-to-rent/property-37493466.html?showcase=true


Wonder how low rents will eventually go on stuff like this?

Well that one's been let.

Crashy_Time

wotsthat wrote: »

Yeah, the decade you rented after selling up in 1998 don't count because you weren't interested in the housing market then.

Didn`t sell up in 1998, and even if I did not sure what that has to do with tanking rent opportunities for Aberdeen landlords?

wotsthat

Crashy_Time wrote: »

Didn`t sell up in 1998, and even if I did not sure what that has to do with tanking rent opportunities for Aberdeen landlords?

Late nineties or whatever then. Being a pedant about your backstory doesn't change the horror of the maths.

Sorry about mentioning something other than Aberdeen.

westernpromise

130% BCR now.

One hundred and thirty per cent.

economic

crashy - its obvious that renting has been a bad idea vs owning. specially now given the low rates. i would be p*ssed off if i listened to you and decided not to buy. would have been a huge mistake.

Crashy_Time

wotsthat wrote: »

Late nineties or whatever then. Being a pedant about your backstory doesn't change the horror of the maths.

Sorry about mentioning something other than Aberdeen.

No, still wrong (on purpose I suspect)

Crashy_Time

economic wrote: »

crashy - its obvious that renting has been a bad idea vs owning. specially now given the low rates. i would be p*ssed off if i listened to you and decided not to buy. would have been a huge mistake.

Didn`t you just buy?

westernpromise

economic wrote: »

crashy - its obvious that renting has been a bad idea vs owning. specially now given the low rates. i would be p*ssed off if i listened to you and decided not to buy. would have been a huge mistake.

Crashy's financial advice is life-changingly bad.

Suppose you had had the opportunity to buy 3 North Hill, Highgate, N6 4AB 3.5 years ago. Let's work out what your BCR would now be.

http://www.zoopla.co.uk/property/3-north-hill/london/n6-4ab/15104985

I chose that because it's a fairly typical 2-bed flat on the main Highgate drag and fairly handy for the tube. It was sold in November 2012 for £475k. Including stamp duty it would have cost you £490k at that time.

Had you bought it you'd have paid about £2,250 a month in mortgage payments since then, and you'd now owe about £438k.

Had you taken Crashy's advice not to buy in 2012, you'd have paid £2,000 a month to rent since then which is to say £11.5k less in rent than the mortgage has cost. So as long as you can buy it again today for say £450k, which is what you'd still owe on the mortgage plus the money you saved by renting, you'd break even. Yo'd be in the same position as the 2012 buyer with the same amount owed on the mortgage.

In fact, you could not today buy that flat for £450k. You'd have to pay £730k plus stamp duty of £26k, a total of £756k.

So following Crashy's advice to speculate against ownership by renting would thus have cost you £306,000, and you would have accumulated a BCR of 38%. That is, you'd need the price to crash 38% from its present value in order to be no worse off buying it today. And that's in just three and a half years. Crashy has been speculating against owning for at least 10 and possibly 20 years, and hence now needs prices to crash by at least 130% to break even. So he is what I call an "unvested interest". It's like what crash trolls sneer at as a vested interest, but with poor judgment.

You are, what, 32, 33? Can you afford to take a £300k hit? Probably not. Life-changing, no?

When thinking about whether or not to pay attention to a crash troll, think about what sort of BCR you'd be left with if you followed their advice and on the basis of some conservative assumptions about mortgage cost and house prices. The usual conclusion is that they're fun to laugh at, but have nothing to say that's worth hearing where your personal net worth is concerned.

Crashy_Time

westernpromise wrote: »

Crashy's financial advice is life-changingly bad.

Suppose you had had the opportunity to buy 3 North Hill, Highgate, N6 4AB 3.5 years ago. Let's work out what your BCR would now be.

http://www.zoopla.co.uk/property/3-north-hill/london/n6-4ab/15104985

I chose that because it's a fairly typical 2-bed flat on the main Highgate drag and fairly handy for the tube. It was sold in November 2012 for £475k. Including stamp duty it would have cost you £490k at that time.

Had you bought it you'd have paid about £2,250 a month in mortgage payments since then, and you'd now owe about £438k.

Had you taken Crashy's advice not to buy in 2012, you'd have paid £2,000 a month to rent since then which is to say £11.5k less in rent than the mortgage has cost. So as long as you can buy it again today for say £450k, which is what you'd still owe on the mortgage plus the money you saved by renting, you'd break even. Yo'd be in the same position as the 2012 buyer with the same amount owed on the mortgage.

In fact, you could not today buy that flat for £450k. You'd have to pay £730k plus stamp duty of £26k, a total of £756k.

So following Crashy's advice to speculate against ownership by renting would thus have cost you £306,000, and you would have accumulated a BCR of 38%. That is, you'd need the price to crash 38% from its present value in order to be no worse off buying it today. And that's in just three and a half years. Crashy has been speculating against owning for at least 10 and possibly 20 years, and hence now needs prices to crash by at least 130% to break even. So he is what I call an "unvested interest". It's like what crash trolls sneer at as a vested interest, but with poor judgment.

You are, what, 32, 33? Can you afford to take a £300k hit? Probably not. Life-changing, no?

When thinking about whether or not to pay attention to a crash troll, think about what sort of BCR you'd be left with if you followed their advice and on the basis of some conservative assumptions about mortgage cost and house prices. The usual conclusion is that they're fun to laugh at, but have nothing to say that's worth hearing where your personal net worth is concerned.

And when a person who claims to know what they are talking about, and who claims to be "totally comfortable" with their past decisions about how much debt to take on posts lengthy rants day after day after day on the internet you know that this is definitely the path you should follow.....:rotfl:

economic

Crashy_Time wrote: »

Didn`t you just buy?

i did - after selling the one i owned previously.