£200k inheritance, property ladder or not?

ReadySteadyPop

confusedfreelancer said:

SadieO said:

This is ridiculously simplistic but if I put all my money into buying a house and its value tanks to zero, I've still got a house to live in. If all my money is in stocks and shares and they tank to zero then I've got nothing. Right?? 

Bingo. I reckon that even if my house value drops to zero, it's still going to be cheaper than renting once you factor in the decades of living rent free. It's such a stupid thing to be arguing against.

This is how I feel too. I feel a bit sick when I think of everything I've spent on rent.

Imagine how people coming off fixes just now feel when they realise how much they will be paying the bank for the use of their house loan?

https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

Run the numbers for that ex-council Bristol house on the "Overpriced" thread and the amount you end up paying back even at 5% (highly unlikely that rate will be available in a couple of months let alone over 25 years) is heart breaking.

Herzlos

ReadySteadyPop said:

confusedfreelancer said:

SadieO said:

This is ridiculously simplistic but if I put all my money into buying a house and its value tanks to zero, I've still got a house to live in. If all my money is in stocks and shares and they tank to zero then I've got nothing. Right?? 

Bingo. I reckon that even if my house value drops to zero, it's still going to be cheaper than renting once you factor in the decades of living rent free. It's such a stupid thing to be arguing against.

This is how I feel too. I feel a bit sick when I think of everything I've spent on rent.

Imagine how people coming off fixes just now feel when they realise how much they will be paying the bank for the use of their house loan?

"Wow this is expensive, but still less than rent! At least I can stop paying in a few years! Thank God I bought when I did".

Not that I need to imagine because I'm in exactly that category. My rate is about to go from 2% to 5%, meaning my mortgage will go from about £800 to £1000. Bad, eh? Well the only rental I can see in my town with the same number of bedrooms is £1400/month, but is a smaller house. So I think I'll be fine.  I'm not happy about paying more for mortgage, but I'm still so glad I've got a mortgage and not rent.

I'm sure you'll try and say that the only reason it's the only one for rent is because it's overpriced, any maybe it is, but if I needed to rent and had a choice of 1, what else do I do?

Herzlos

ReadySteadyPop said:

Run the numbers for that ex-council Bristol house on the "Overpriced" thread and the amount you end up paying back even at 5% (highly unlikely that rate will be available in a couple of months let alone over 25 years) is heart breaking.

Try running the numbers on an equivalent rental, remember to factor in equity and rent after the mortgage term.

I'd love to see you contort that so that renting is cheaper.

ReadySteadyPop

With the media now latching onto the possibility of a debt crisis I would just stick 50k in premium bonds and drip the rest into a money market fund held in an ISA until things become clearer, much too risky to pay kite flying prices at the moment.

ReadySteadyPop

Herzlos said:

ReadySteadyPop said:

confusedfreelancer said:

SadieO said:

This is ridiculously simplistic but if I put all my money into buying a house and its value tanks to zero, I've still got a house to live in. If all my money is in stocks and shares and they tank to zero then I've got nothing. Right?? 

Bingo. I reckon that even if my house value drops to zero, it's still going to be cheaper than renting once you factor in the decades of living rent free. It's such a stupid thing to be arguing against.

This is how I feel too. I feel a bit sick when I think of everything I've spent on rent.

Imagine how people coming off fixes just now feel when they realise how much they will be paying the bank for the use of their house loan?

"Wow this is expensive, but still less than rent! At least I can stop paying in a few years! Thank God I bought when I did".

Not that I need to imagine because I'm in exactly that category. My rate is about to go from 2% to 5%, meaning my mortgage will go from about £800 to £1000. Bad, eh? Well the only rental I can see in my town with the same number of bedrooms is £1400/month, but is a smaller house. So I think I'll be fine.  I'm not happy about paying more for mortgage, but I'm still so glad I've got a mortgage and not rent.

I'm sure you'll try and say that the only reason it's the only one for rent is because it's overpriced, any maybe it is, but if I needed to rent and had a choice of 1, what else do I do?

You can`t generalise the whole UK market from one town with a lack of rentals, if you expand your search area you will find more/cheaper rentals for sure, landlords can`t just bail out of the market the same way someone with stocks or a money market fund can, they have to wait for a buyer and in the meantime need to try to keep the property occupied to avoid double council tax etc. there are good deals out there if you look for them.

Herzlos

ReadySteadyPop said:

Herzlos said:

ReadySteadyPop said:

confusedfreelancer said:

SadieO said:

This is ridiculously simplistic but if I put all my money into buying a house and its value tanks to zero, I've still got a house to live in. If all my money is in stocks and shares and they tank to zero then I've got nothing. Right?? 

Bingo. I reckon that even if my house value drops to zero, it's still going to be cheaper than renting once you factor in the decades of living rent free. It's such a stupid thing to be arguing against.

This is how I feel too. I feel a bit sick when I think of everything I've spent on rent.

Imagine how people coming off fixes just now feel when they realise how much they will be paying the bank for the use of their house loan?

"Wow this is expensive, but still less than rent! At least I can stop paying in a few years! Thank God I bought when I did".

Not that I need to imagine because I'm in exactly that category. My rate is about to go from 2% to 5%, meaning my mortgage will go from about £800 to £1000. Bad, eh? Well the only rental I can see in my town with the same number of bedrooms is £1400/month, but is a smaller house. So I think I'll be fine.  I'm not happy about paying more for mortgage, but I'm still so glad I've got a mortgage and not rent.

I'm sure you'll try and say that the only reason it's the only one for rent is because it's overpriced, any maybe it is, but if I needed to rent and had a choice of 1, what else do I do?

You can`t generalise the whole UK market from one town with a lack of rentals, if you expand your search area you will find more/cheaper rentals for sure, landlords can`t just bail out of the market the same way someone with stocks or a money market fund can, they have to wait for a buyer and in the meantime need to try to keep the property occupied to avoid double council tax etc. there are good deals out there if you look for them.

I'm comparing like for like, based on the actual house I'm sitting in right now, to provide my perspective as to why I, the sort of person you were targeting in your claim, don't agree with your claim.

Pick any other city and property type you wish and I can hash out numbers but the results will be the same.

The point your trying to dodge is that an equivalent rental is still 50% more than my mortgage *after* the rate hike.

ReadySteadyPop

Herzlos said:

ReadySteadyPop said:

Herzlos said:

ReadySteadyPop said:

confusedfreelancer said:

SadieO said:

This is ridiculously simplistic but if I put all my money into buying a house and its value tanks to zero, I've still got a house to live in. If all my money is in stocks and shares and they tank to zero then I've got nothing. Right?? 

Bingo. I reckon that even if my house value drops to zero, it's still going to be cheaper than renting once you factor in the decades of living rent free. It's such a stupid thing to be arguing against.

This is how I feel too. I feel a bit sick when I think of everything I've spent on rent.

Imagine how people coming off fixes just now feel when they realise how much they will be paying the bank for the use of their house loan?

"Wow this is expensive, but still less than rent! At least I can stop paying in a few years! Thank God I bought when I did".

Not that I need to imagine because I'm in exactly that category. My rate is about to go from 2% to 5%, meaning my mortgage will go from about £800 to £1000. Bad, eh? Well the only rental I can see in my town with the same number of bedrooms is £1400/month, but is a smaller house. So I think I'll be fine.  I'm not happy about paying more for mortgage, but I'm still so glad I've got a mortgage and not rent.

I'm sure you'll try and say that the only reason it's the only one for rent is because it's overpriced, any maybe it is, but if I needed to rent and had a choice of 1, what else do I do?

You can`t generalise the whole UK market from one town with a lack of rentals, if you expand your search area you will find more/cheaper rentals for sure, landlords can`t just bail out of the market the same way someone with stocks or a money market fund can, they have to wait for a buyer and in the meantime need to try to keep the property occupied to avoid double council tax etc. there are good deals out there if you look for them.

I'm comparing like for like, based on the actual house I'm sitting in right now, to provide my perspective as to why I, the sort of person you were targeting in your claim, don't agree with your claim.

Pick any other city and property type you wish and I can hash out numbers but the results will be the same.

The point your trying to dodge is that an equivalent rental is still 50% more than my mortgage *after* the rate hike.

I can`t see that being something that is sustainable going forward to be honest.

horsewithnoname

ReadySteadyPop said:

With the media now latching onto the possibility of a debt crisis I would just stick 50k in premium bonds and drip the rest into a money market fund held in an ISA until things become clearer, much too risky to pay kite flying prices at the moment.

Please don’t anyone plan their life on the basis of what the media say!

Herzlos

ReadySteadyPop said:

Herzlos said:

ReadySteadyPop said:

Herzlos said:

ReadySteadyPop said:

confusedfreelancer said:

SadieO said:

This is ridiculously simplistic but if I put all my money into buying a house and its value tanks to zero, I've still got a house to live in. If all my money is in stocks and shares and they tank to zero then I've got nothing. Right?? 

Bingo. I reckon that even if my house value drops to zero, it's still going to be cheaper than renting once you factor in the decades of living rent free. It's such a stupid thing to be arguing against.

This is how I feel too. I feel a bit sick when I think of everything I've spent on rent.

Imagine how people coming off fixes just now feel when they realise how much they will be paying the bank for the use of their house loan?

"Wow this is expensive, but still less than rent! At least I can stop paying in a few years! Thank God I bought when I did".

Not that I need to imagine because I'm in exactly that category. My rate is about to go from 2% to 5%, meaning my mortgage will go from about £800 to £1000. Bad, eh? Well the only rental I can see in my town with the same number of bedrooms is £1400/month, but is a smaller house. So I think I'll be fine.  I'm not happy about paying more for mortgage, but I'm still so glad I've got a mortgage and not rent.

I'm sure you'll try and say that the only reason it's the only one for rent is because it's overpriced, any maybe it is, but if I needed to rent and had a choice of 1, what else do I do?

You can`t generalise the whole UK market from one town with a lack of rentals, if you expand your search area you will find more/cheaper rentals for sure, landlords can`t just bail out of the market the same way someone with stocks or a money market fund can, they have to wait for a buyer and in the meantime need to try to keep the property occupied to avoid double council tax etc. there are good deals out there if you look for them.

I'm comparing like for like, based on the actual house I'm sitting in right now, to provide my perspective as to why I, the sort of person you were targeting in your claim, don't agree with your claim.

Pick any other city and property type you wish and I can hash out numbers but the results will be the same.

The point your trying to dodge is that an equivalent rental is still 50% more than my mortgage *after* the rate hike.

I can`t see that being something that is sustainable going forward to be honest.

Absolutely. I've no idea how anyone can afford to rent long term. At least my Mortgage will go down.

The sad reality is that outside of social rents, which we need much more of, private rental rates are going to be based on the landlords mortgage, allowing for profit after tax. So the 2 are intrinsically linked but there's no way market rate will be less than an equivalent mortgage or the landlord will lose money.

kempiejon

I've rented my homes for decades, I was always able to afford it. I believe around 60% of homes in the UK are owner occupiers so although in the majority there are plenty of us affording rent. Owning is not the only game in town surely we can all see that?

I know people who gave the keys back to the mortgage company in negative equity so in their instance they lost the house and all the money up to that point they paid in mortgage and still had a debt to the mortgage company.
I never bought any white goods or paid for property maintenance or had to pay the mortgage company to rent the money they used to buy my house, I lived in a dozen homes in as many years in a dozen new places. Imagine buying a house every year. Changing rentals is fairly easy, sorted in a month or so with very little extra costs buying is not like that.