Rents soar to (another) record high

economic

Crashy_Time wrote: »

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:

the point is you were wrong and for so long. i understand if people dont want to buy if they are not going to be living in an area long term but if you dont own you are simply short housing and are losing every day prices go up (and wasting money on rent at the same time). i wished i had bought early but im glad i eventually did when i did.

wotsthat

Crashy_Time wrote: »

No, still wrong (on purpose I suspect)

There is a search function and I'm not afraid to use it. From Nov 2014.

ukcarper wrote: »

I though you sold 16 years ago

Crashy_Time wrote: »

No, I sold before that because I lived in a different part of the country, and was sick of having people in the house causing problems with the neighbours. The fact that houses were in a bubble (Edinburgh) only started to occur to me at some point in the early 2000`s (according to debate on here it must have been 2004 or thereabouts) and the fact that it was an orchestrated credit event run for the benefit of the bankers, and that it was all going to fall down only became clear when I joined the HPC site in 2007.

2014 - 16 = 1998

You sold before that - it's more tragic than even I thought.

economic

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.

im 33, 300k is certainly a big hit for me to take. the thing is having just bought now even if we do get a 20-30% correction i would still be happy with my purchase as i am paying off my mortgage quickly, dont have to rent and thus am setting myself up for financial freedom very soon.

westernpromise

economic wrote: »

im 33, 300k is certainly a big hit for me to take. the thing is having just bought now even if we do get a 20-30% correction i would still be happy with my purchase as i am paying off my mortgage quickly, dont have to rent and thus am setting myself up for financial freedom very soon.

I think you said you paid about 600k for your place in Highgate? To understand where Crashy is coming from, you need to consider what his circumstances would be if he lived in Highgate and could have bought your flat in 2001. He didn't and he now needs its price to fall by about a million pounds. Yes, even though it's worth 6 or 700, he needs it fall to less than £0 to recoup all the rent he's wasted. About £300k less than 0 in fact.

You've got 30 years of working age left, he has maybe 10, but he's got maybe 30 more years of unfunded rent to find in that time.

The fruits of speculating with the roof over your head...

Cakeguts

floridaman wrote: »

Rents are rising.

Where exactly are these rents rising? You see it isn't the same all over the country.

Crashy_Time

https://mobile.twitter.com/Citylets/status/718421456628137984


Schum Mishtake Shurly Mish Moneypenny......:rotfl:

Crashy_Time

http://www.rightmove.co.uk/property-to-rent/property-40498875.html


400 p.m reached and breached in Aberdeen it seems. How low can they go?

dharm999

Cakeguts wrote: »

Where exactly are these rents rising? You see it isn't the same all over the country.

http://www.citylets.co.uk/research/reports/

Edinburgh, maybe?

wotsthat

Crashy_Time wrote: »

http://www.rightmove.co.uk/property-to-rent/property-40498875.html


400 p.m reached and breached in Aberdeen it seems. How low can they go?

To pay for your housing short you need them low enough that your landlord pays you.

Even then you might not have enough years left to breakeven.

Crashy_Time

Citylets report for Aberdeen must mean shares in anyone making incontinence aids up there are worth a punt?