The Aberdeen House Prices & Rents thread

HAMISH_MCTAVISH

Crashy_Time wrote: »

But the main point is that

You bought a house for your landlords.

Jolly decent of you.;)

Crashy_Time

wotsthat wrote: »

It's not a surprise that (a) you have no idea how much you've paid in rent and have no idea what crash you now need to breakeven or (b) you have an ever changing backstory although I expect that's related to not having a clue as per (a) rather than lying.

I can't find where you posted your total rent but have now found you saying your rent averaged £400 as well as £350. Can we agree on this one below?



That was a year ago so 17 years @ £350 and 1 year at £400. That's an average of £352.78 per month over 18 years.

Glad we sorted that - with apologies I'll correct my post..



I think the basic point remains the same but accuracy is important.

So you have managed to go the long way round and are now sure that rent wasn`t 400 p.m 20 years ago, or is there more tripe to follow?

Crashy_Time

HAMISH_MCTAVISH wrote: »

You bought a house for your landlords.

Jolly decent of you.;)

Bet some of your neighbours wish I lived in Aberdeen eh Hamish?

wotsthat

Crashy_Time wrote: »

So you have managed to go the long way round and are now sure that rent wasn`t 400 p.m 20 years ago, or is there more tripe to follow?

I'm not sure of anything because you are less than clear. Looks like you've spent 18 years and c£76,000 renting places (none of which you'd wish to buy) and currently live in a flat/ room in an area where there are lots of empty rentals and a number are boarded up.

Let me know about 19 & 20 years ago and I'll make a further amend - I'm sure it'll make all the difference.

Crashy_Time

wotsthat wrote: »

I'm not sure of anything because you are less than clear. Looks like you've spent 18 years and c£76,000 renting places (none of which you'd wish to buy) and currently live in a flat/ room in an area where there are lots of empty rentals and a number are boarded up.

Let me know about 19 & 20 years ago and I'll make a further amend - I'm sure it'll make all the difference.

Not many empty rentals at the moment, there are always a few though. Nothing boarded up either, they don`t like that 15 minutes from one of the most visited city centres in the UK.

westernpromise

Crashy_Time wrote: »

I think I once posted the actual amount of rent paid since 1998, but I can`t really be bothered again. But the main point is that rent wasn`t £400 p.m 20 years ago. Are you able to understand that without a calculator?

This confirms what I had begun to suspect, Crashy, which is that you require a crash of more than 100%. After 20 years of renting you now need houses to have negative value.

According to Rightmove you can buy, outright, a studio or 1-bedroom flat in Aberdeen or thereabouts for about £70,000*. I’m guessing such a flat 20 years ago would not have been £70k. Probably it would have been more like £35k, assuming prices have only doubled since then.

According to this** handy mortgage balance calculator, if you had paid £35k 20 years ago at an average subsequent rate of 3% (which seems about right) on a 20-year mortgage, then you’d have spent £194 a month and £47k in total on mortgage payments by now. You’d have paid that mortgage off, and you’d now own that property.

If instead of £47k to own you’ve spent £90k on rent, a difference of £43k, then the only way you get this back is if its price falls to -£43k. In other words, you would need someone to give you the flat for nothing and also pay you £43k on top to take it off their hands. That way, £90k spent in rent less the gift of a free flat and free money would mean you owned it at a total cost of £47k.

So you need prices to fall from £70k to -£43k, which is a Breakeven Crash Requirement of 161%.

To put it another way, Crashy, even if you’ve only spent £43k, then you still need a crash of 100%, from £70k to £0k. As a matter of interest, what level of crash are you actually expecting?

If anyone thinks it’s a bit cruel to rub Crashy’s nose in it, let’s not forget that Crashy spends most of most threads gloating over and applauding the misfortune he hopes is about to overtake property owners. So while I’d sympathise with some in this situation, I don’t see why anyone need do so here.

* http://www.rightmove.co.uk/property-for-sale/Aberdeen.html?sortType=1&minBedrooms=0&maxBedrooms=1&primaryDisplayPropertyType=flats&radius=10.0

** http://www.calculator.net/mortgage-calculator.html?chouseprice=35000&cdownpayment=0&cloanterm=20&cinterestrate=3&cpropertytaxes=1.2&chomeins=1200&cpmi=0&choa=0&cothercost=3000&cstartmonth=1&cstartyear=1996&printit=0&x=52&y=10

westernpromise

wotsthat wrote: »

Crashy is a chap that's made a lifestyle choice to live cheap, save hard and never ever get himself into debt again and, of course, there's absolutely nothing wrong with that.

Well, except it doesn’t work.

If Crashy sold up 18 years ago in his early 30s, he’s 50. He’s presumably Scottish, so even with a Scotsman’s attenuated life expectancy of say 75, he constructively does have a debt: the as-yet unmet cost of 25 more years of renting.

At £400 a month that’s a debt of £120,000. Me, I’d buy a £70k flat today. It’ll only cost me £93k to own, and I’m housed if I live past 75.

wotsthat

westernpromise wrote: »

Well, except it doesn’t work.

If Crashy sold up 18 years ago in his early 30s, he’s 50. He’s presumably Scottish, so even with a Scotsman’s attenuated life expectancy of say 75, he constructively does have a debt: the as-yet unmet cost of 25 more years of renting.

At £400 a month that’s a debt of £120,000. Me, I’d buy a £70k flat today. It’ll only cost me £93k to own, and I’m housed if I live past 75.

I see a distinction between debt and future liabilities. Crashy has none of the former and a lot of the latter. He's unwilling to get into debt, or spend some savings, to invest in reducing his future liabilities.

Like a lot of people who fail to properly plan for the future they think the future liabilities will take care of themselves.

westernpromise

wotsthat wrote: »

I see a distinction between debt and future liabilities. Crashy has none of the former and a lot of the latter. He's unwilling to get into debt, or spend some savings, to invest in reducing his future liabilities.

Like a lot of people who fail to properly plan for the future they think the future liabilities will take care of themselves.

Indeed, although it’s a distinction without a difference because you have to pay off the mortgage and if you avoid having a mortgage then you have to pay the rent. So constructively they amount to the same thing

HAMISH_MCTAVISH

westernpromise wrote: »

Well, except it doesn’t work.

If Crashy sold up 18 years ago in his early 30s, he’s 50. He’s presumably Scottish, so even with a Scotsman’s attenuated life expectancy of say 75, he constructively does have a debt: the as-yet unmet cost of 25 more years of renting.

At £400 a month that’s a debt of £120,000. Me, I’d buy a £70k flat today. It’ll only cost me £93k to own, and I’m housed if I live past 75.

Stop talking sense.