Today's Bear food

p1212

wotsthat wrote: »

I don't get it. He wants to buy a house, finds one he likes (loves it no less) and despite knowing the government and BoE are going to increase prices finds he's only willing to offer £310k when the asking price is £315k.

It must be up by at least £100k and he's paid nearly 3 years rent in the meantime. At least his rent is heavily subsidised (although I might be thinking of Mr Leg End). No wonder he isn't exactly Mr sweetness and light.

That 100K should be more or less right, it was like 30-40 miles from London.

Renting is actually not that much of a loss, but you need to do some math to see it, for some people it is quite hard I know...

If I would rent the same house it would cost today less than 1300 according to rightmove, but let's calculate with 1300. For a house like that above with 20% deposit you would pay 500 interest for two years, then around 700-800 for many more years, at the 2014 rates.

Let's calculate with 700. So we are at 1300-700=only 600 is wasted.

You can invest that 63K deposit + all the fees and moving costs + some furnitue you'd bought, lets say total 73K slightly better than the average, let's say on 4% with a little work and zero risk. That is 3 grand per year, that is 250 per each month, so I've only wasted 600-250=350.

Then I don't have insurance costs, minus 20, we are down at 330.

What else? We got a lot of new stuff in the meantime, that alone would've costed over 2 grand in the last two year, that's another 100 down, so we are at 230.

As I said that house was 30-40 miles from London, that is an extra 2x20=40 miles commuting per day, for all members of the family, that is four extra tanks per month = another 200. We are down at 30.

Even if I don't find another 30 pounds, I've only lost 720 in the last two years by renting.

OK, there is the capital appreciation, but that would be just a paper gain for the next 23 years anyway and no one really knows how expensive property will be in 23 years time.

Also I am still checking the market there and at the moment there are 4 times the houses on the market today than in 2014, the supply is back on 2009-2010 levels, I am not sure this paper gain will stay there for too long.

You have a big mouth, but you haven't done your homework.

AnotherJoe

p1212 wrote: »

That 100K should be more or less right, it was like 30-40 miles from London.

Renting is actually not that much of a loss, but you need to do some math to see it, for some people it is quite hard I know...

If I would rent the same house it would cost today less than 1300 according to rightmove, but let's calculate with 1300. For a house like that above with 20% deposit you would pay 500 interest for two years, then around 700-800 for many more years, at the 2014 rates.

Let's calculate with 700. So we are at 1300-700=only 600 is wasted.

You can invest that 63K deposit + all the fees and moving costs + some furnitue you'd bought, lets say total 73K slightly better than the average, let's say on 4% with a little work and zero risk. That is 3 grand per year, that is 250 per each month, so I've only wasted 600-250=350.
You'd invest it? Why? You've just spent pages of text telling us about all the QE thats going on and what a disaster that is and why you shouldnt invest !!


Then I don't have insurance costs, minus 20, we are down at 330.

What else? We got a lot of new stuff in the meantime, that alone would've costed over 2 grand in the last two year, that's another 100 down, so we are at 230. Irrelevant, the fact you spent some money on "new stuff" while renting doesn't affect the argument at all. So you bought a new i Phone? So what, thats got nothing to do with renting or buying.

As I said that house was 30-40 miles from London, that is an extra 2x20=40 miles commuting per day, for all members of the family, that is four extra tanks per month = another 200. We are down at 30. That will only last about 4 - 5 years unless you plan to have your family live with you forever.

Even if I don't find another 30 pounds, I've only lost 720 in the last two years by renting.

OK, there is the capital appreciation, but that would be just a paper gain for the next 23 years anyway and no one really knows how expensive property will be in 23 years time.

Also I am still checking the market there and at the moment there are 4 times the houses on the market today than in 2014, the supply is back on 2009-2010 levels, I am not sure this paper gain will stay there for too long.

You have a big mouth, but you haven't done your homework.

Yeh, just the one hundred thousand pounds. :eek: But other than that, not much
Which you could now take and move into rented and have a hundred £k to play with and buy even more "stuff".

And when those 23 years are up by the way, you've got the rest of your lifetime to continue to pay someone elses mortgage for them, instead of having no rent again, ever.

Homework? D minus.

ukcarper

p1212 wrote: »

That 100K should be more or less right, it was like 30-40 miles from London.

Renting is actually not that much of a loss, but you need to do some math to see it, for some people it is quite hard I know...

If I would rent the same house it would cost today less than 1300 according to rightmove, but let's calculate with 1300. For a house like that above with 20% deposit you would pay 500 interest for two years, then around 700-800 for many more years, at the 2014 rates.

Let's calculate with 700. So we are at 1300-700=only 600 is wasted.

You can invest that 63K deposit + all the fees and moving costs + some furnitue you'd bought, lets say total 73K slightly better than the average, let's say on 4% with a little work and zero risk. That is 3 grand per year, that is 250 per each month, so I've only wasted 600-250=350.

Then I don't have insurance costs, minus 20, we are down at 330.

What else? We got a lot of new stuff in the meantime, that alone would've costed over 2 grand in the last two year, that's another 100 down, so we are at 230.

As I said that house was 30-40 miles from London, that is an extra 2x20=40 miles commuting per day, for all members of the family, that is four extra tanks per month = another 200. We are down at 30.

Even if I don't find another 30 pounds, I've only lost 720 in the last two years by renting.

OK, there is the capital appreciation, but that would be just a paper gain for the next 23 years anyway and no one really knows how expensive property will be in 23 years time.

Also I am still checking the market there and at the moment there are 4 times the houses on the market today than in 2014, the supply is back on 2009-2010 levels, I am not sure this paper gain will stay there for too long.

You have a big mouth, but you haven't done your homework.

Just two things

1:- if you rent 3 years thats three years more before you are mortgage free and you are living rent free.

2 :- can you point me to where i can get 4% with zero risk.

Jack_Johnson_the_acorn

p1212 wrote: »

That 100K should be more or less right, it was like 30-40 miles from London.

Renting is actually not that much of a loss, but you need to do some math to see it, for some people it is quite hard I know...

If I would rent the same house it would cost today less than 1300 according to rightmove, but let's calculate with 1300. For a house like that above with 20% deposit you would pay 500 interest for two years, then around 700-800 for many more years, at the 2014 rates.

Let's calculate with 700. So we are at 1300-700=only 600 is wasted.

You can invest that 63K deposit + all the fees and moving costs + some furnitue you'd bought, lets say total 73K slightly better than the average, let's say on 4% with a little work and zero risk. That is 3 grand per year, that is 250 per each month, so I've only wasted 600-250=350.

Then I don't have insurance costs, minus 20, we are down at 330.

What else? We got a lot of new stuff in the meantime, that alone would've costed over 2 grand in the last two year, that's another 100 down, so we are at 230.

As I said that house was 30-40 miles from London, that is an extra 2x20=40 miles commuting per day, for all members of the family, that is four extra tanks per month = another 200. We are down at 30.

Even if I don't find another 30 pounds, I've only lost 720 in the last two years by renting.

OK, there is the capital appreciation, but that would be just a paper gain for the next 23 years anyway and no one really knows how expensive property will be in 23 years time.

Also I am still checking the market there and at the moment there are 4 times the houses on the market today than in 2014, the supply is back on 2009-2010 levels, I am not sure this paper gain will stay there for too long.

You have a big mouth, but you haven't done your homework.

So 2+yrs closer to being housing cost free or 100k cash.... and you choose to rent.... nice use of logic.

mwpt

ukcarper wrote: »

Just two things

1:- if you rent 3 years thats three years more before you are mortgage free and you are living rent free.

2 :- can you point me to where i can get 4% with zero risk.

Over what timeline? If you do a monthly cost average low cost investment in a FTSE 100 tracker (eg. Vanguard), the returns average over 4% and in the history of the FTSE 100, it has never gone to zero.

ukcarper

mwpt wrote: »

Over what timeline? If you do a monthly cost average low cost investment in a FTSE 100 tracker (eg. Vanguard), the returns average over 4% and in the history of the FTSE 100, it has never gone to zero.

I wouldn't call that zero risk you might not lose all your money but there is a chance you could lose some.

System

We need a BCR calculation for p1212

AnotherJoe

Joeskeppi wrote: »

We need a BCR calculation for p1212

Back of a fag packet, it will be in the region of 35%.

cells

p1212 wrote: »

That 100K should be more or less right, it was like 30-40 miles from London.

Renting is actually not that much of a loss, but you need to do some math to see it, for some people it is quite hard I know...

If I would rent the same house it would cost today less than 1300 according to rightmove, but let's calculate with 1300. For a house like that above with 20% deposit you would pay 500 interest for two years, then around 700-800 for many more years, at the 2014 rates.

Let's calculate with 700. So we are at 1300-700=only 600 is wasted.

You can invest that 63K deposit + all the fees and moving costs + some furnitue you'd bought, lets say total 73K slightly better than the average, let's say on 4% with a little work and zero risk. That is 3 grand per year, that is 250 per each month, so I've only wasted 600-250=350.

Then I don't have insurance costs, minus 20, we are down at 330.

What else? We got a lot of new stuff in the meantime, that alone would've costed over 2 grand in the last two year, that's another 100 down, so we are at 230.

As I said that house was 30-40 miles from London, that is an extra 2x20=40 miles commuting per day, for all members of the family, that is four extra tanks per month = another 200. We are down at 30.

Even if I don't find another 30 pounds, I've only lost 720 in the last two years by renting.

OK, there is the capital appreciation, but that would be just a paper gain for the next 23 years anyway and no one really knows how expensive property will be in 23 years time.

Also I am still checking the market there and at the moment there are 4 times the houses on the market today than in 2014, the supply is back on 2009-2010 levels, I am not sure this paper gain will stay there for too long.

You have a big mouth, but you haven't done your homework.

Renting will always be more expensive than owning in the medium and long term as you add another layer of work cost regulations time and profit. To pretend otherwise is silly.

The only case where it might work out in your favour is if capital price falls exceed the additional overheads and long term thah is veru unlikely.

With landlords typically charging 5% and with owner mortgages at 2% you need at least a 3% fall in house prices each year to make it about even. Over the next ten years you would need a 30% house price crash to stand still but instead of a 30% house price crash you have experienced a 30% house price gain. So you personally need a 50% house price crash over the next 8 years just to break even.

Are you beginning to see why trying to time the market is silly? The overheads and additional costs of renting means you are almost certain to be worse off. Its like rolling two dice and trying to call it. You will be correct one time. The other 35 tines you are a loser.

cells

Like I've said before we need someone to invent house price crash insurance to save these people from themselves. The insurer bears the cost of a house price crash in excess of 20% if the owner sells by offering a 5 or 10 year insurance policy for an upfront fee of say 1 or 2%. Would be like taking candy from a house price crash baby.