House Building everywhere, Can it Continue?

buglawton

https://news.sky.com/story/britains-houses-have-never-been-smaller-according-to-new-analysis-11323783
Living rooms now smaller than in the 1930s.

Herzlos

buglawton wrote: »

https://news.sky.com/story/britains-houses-have-never-been-smaller-according-to-new-analysis-11323783
Living rooms now smaller than in the 1930s.

I can definitely see that, the living room spaces in the few new builds I've had a look at have been puny - literally room for a 3 seater sofa, a coffee table and a TV (and only then because you can wall mount it). I can't fathom how frustrating that'd be for a family that has hobbies beyond TV/internet/consoles.


Our 70's house isn't exactly big but we've still got more floor space in this 2 bed semi than the 3 beds we were looking at for double the price.

ukcarper

buglawton wrote: »

https://news.sky.com/story/britains-houses-have-never-been-smaller-according-to-new-analysis-11323783
Living rooms now smaller than in the 1930s.

Although house might be smaller many now have on suites and cloakrooms which most 70s houses didn't so that will make other rooms smaller.

AG47

lisyloo wrote: »

Even if that were true, people still need somewhere to live and can’t wait forever to strat a family (female fertility drops off a cliff at 35).

Even if houses are overpriced they are still cheaper than renting and for most unsophisticated investors better than putting your money elsewhere, when you take account of

Gearing
No tax
Several decades of rent free living in retirement

It’s not cheaper to buy than to rent.

If you rent fully furnished then it’s far better to wear out your landlords furythan your own.

Plus all the fees involved with buying Nd selling, both to the government and to agents and solicitors

Once interest rates go back to normal and even overshoot on the correction because they were held down too low for too long, then your house which you thought was an asset will become a liability

ukcarper

AG47 wrote: »

It’s not cheaper to buy than to rent.

If you rent fully furnished then it’s far better to wear out your landlords furythan your own.

Plus all the fees involved with buying Nd selling, both to the government and to agents and solicitors

Once interest rates go back to normal and even overshoot on the correction because they were held down too low for too long, then your house which you thought was an asset will become a liability

Over a lifetime it's much cheaper to buy I haven't paid any mortgage for almost 10 years that buys a lot of furniture and I can sit on a sofa I like and find comfortable instead of something cheap my landlord could lay his hands on .

Herzlos

AG47 wrote: »

It’s not cheaper to buy than to rent.

If you rent fully furnished then it’s far better to wear out your landlords furythan your own.

Plus all the fees involved with buying Nd selling, both to the government and to agents and solicitors

Once interest rates go back to normal and even overshoot on the correction because they were held down too low for too long, then your house which you thought was an asset will become a liability

If you rent you're likely paying the landlords mortgage + maintenance + some profit percentage, so rent must be more than an average mortgage (with the caveat that the landlord might have cleared it already or get a better term). You'll also be paying more if it's furnished.


It costs a lot of money to move, but if you buy you're likely moving every decade at most so that cost is amortized over the years between moves. If you rent you may be moving as often as every 6 months, with associated agency / reference fees, moving vans, redecorating and so on.


Plus assuming someone were to move out and buy or rent at 20, and an average mortgage term of 30 years, that means it's clear (and therefor free on a monthly basis) by 50 and easily have another 30 or 40 years of 0 rent.

Then there's equity. Every months rent payment goes to the landlord, but every months mortgage payment is split into equity and interest. So even if the house price doesn't go up, you'd have a growing equity in it which either means you can cash out or just get a cheaper monthly payment due to better loan to value.

lisyloo

AG47 wrote: »

It’s not cheaper to buy than to rent.

If you rent fully furnished then it’s far better to wear out your landlords furythan your own.

Plus all the fees involved with buying Nd selling, both to the government and to agents and solicitors

Once interest rates go back to normal and even overshoot on the correction because they were held down too low for too long, then your house which you thought was an asset will become a liability

Your wrong (for the case where people are relatively stable).
You can get decades for free if you buy a house.
I haven't bought any furniture for years and rarely wear it out.
I had to have a new boiler after 14, but this is over a long period.


How will it become a liability if I'm not paying any rent//mortgage?


There is maintenance (of course) but that's pretty low - for example £1800 boiler over 14 years.


What are you doing on your sofa to wear it out - extreme trampolining?
I've got the same one I bought in 2001 and have no plans to change it.

Sapphire

lisyloo wrote: »

Your wrong (for the case where people are relatively stable).

There is maintenance (of course) but that's pretty low - for example £1800 boiler over 14 years.


What are you doing on your sofa to wear it out - extreme trampolining?
I've got the same one I bought in 2001 and have no plans to change it.

:rotfl:

Ha! I can top you there. My sofa and two armchairs are from the 1930s. I've had them re-covered twice since getting them (a sister gave them to me, and she got them from a friend), the second time only because beloved cat tore up the front legs.

Thinking of stuff I have replaced: a fridge/freezer last week, but only because my last one broke down after 13 years and could not be repaired; carpet in bedroom about two months ago (after living with old carpet for about 14 years); boiler about seven years ago because old one broke down irreparably.

Other stuff I've bought, like a long Georgian table (dark brown because I like dark brown wood), is here to stay and it has only appeared every couple of years or so when I've found something I really like (all of this is stuff once beautifully made in Britain).

lisyloo

Maintenance, building insurance and transactional costs (removals, stamp duty, legal fees, mortgage fees) should all be included in any valid comaparison of rent vs mortgage. They just aren’t that significant.

chucknorris

AG47 wrote: »

It’s not cheaper to buy than to rent.

If you rent fully furnished then it’s far better to wear out your landlords furythan your own.

Plus all the fees involved with buying Nd selling, both to the government and to agents and solicitors

Once interest rates go back to normal and even overshoot on the correction because they were held down too low for too long, then your house which you thought was an asset will become a liability

It is definitely cheaper to buy than rent, do you really think that landlords are running some sort of charity? All the maintenance, fees and furniture costs are factored into the rent. On our last submitted tax returns our rental profits that we paid tax on were well over £100k, how do you account for that profit, if renting is cheaper than buying? I suspect that you are being short sighted and making a common bear mistake, by looking at only the first year, but property is a long term investment, and gets much better as the years pass by.

Properties are definitely an asset in the long run. These are the properties that we have sold, and don't forget that the ones sold a while ago, that the profit was worth more back then:

2 bed bungalow bought for £28k in 1988, sold for £51.5k in 1991 (£6k spent on refurbishing).

4 bed house bought for £68k in 1992, sold for £135k in 1997.

3 bed house bought for £133k in 1991, sold for £375k in 2003.

4 bed house bought for £110k in 1997, sold for just over £1m in 2016 (about £30k spent on refurbishment I think, it was my wife's house and she bought it before I met her)

2 bed flat bought for £84k in 1999, sold for £440k in 2016


We've just bought a new house, the old one has recently been put on the market for over £300k than I paid for it.

EDIT: I've also recently decided to sell a 3 bed flat when my tenants move out next June, I bought it in 1991 for £70.5k, it will probably go on the market for around £600k. I will probably sell another 3 bed flat the year after that, as my tenants finish their PhD's then, and will mostly likely move out. I bought that one for £58.5k, and it will go on the market for about £460k.