House prices continue to fall (Hometrack Report)

GreenB_2

Most people who I know who are selling or have sold are buying new houses. Very few people I know who have ever owned have then rented for a long period of time.

I still don't get why people say renting is cheaper - if you are paying an interest only mortgage (which is equiv. to paying rent) then its not always the case. You then have no control over your destiny as the landlord can decide when you want to leave. I can think of several friends who have had to move every 6 to 12 months - One bloke 6 times in 4 years - that doesn't sound fun to me (or cheap if you have to get a removal firm in each time, redirect your post,wreck your credit rating etc).

meanmachine_2

Forgive me, Green B but can I ask your motivation for coming onto this site and trying to talk up the market the whole time - even when it's clearly going down the poop chute at the moment!

My motivation is that I'm a potential FTBer who needs to keep a close eye on the market. Bridie's is that he/she is about to sell up, etc etc

Unless someone is either an estate agent or a seller/buyer, I can't quite see your motivation...

And your facts are very general. In a falling market renting does make total sense. If you can't see that, then you need a new calculator.

I've rented for many years and have never been asked to move on by anyone ever. In fact, as a decent tenant the landlord has always been desperate to keep me and extend the contract.

meanmachine_2

GreenB wrote:

One bloke 6 times in 4 years - that doesn't sound fun to me (or cheap if you have to get a removal firm in each time, redirect your post,wreck your credit rating etc).

Does it wreck your credit rating? Is that actually true or is it yet more estate agent speak?

Gets very tedious after a while, you know.

It's not accurate, so again I ask what's your motivation for having such a downer on renting?

zzzLazyDaisy

Just to balance the debate - I have rented and owned, at various times. I moved last Summer, just around the time the market reached its peak. I agree that, on a purely financial basis, I would probably have been better off renting (I daren't ask what my house is worth now, I'd probably cry).

BUT, I had an awful experience with a private landlord, who just walking in whenever he felt like it. My son has also had dreadful experiences, having his tenancy terminated and having to move on every six months or so (it is usually the agents who do this, rather than the landlords themselves - maybe they get extra commission for finding a new tenant? I don't know).

I do know I wouldn't have been able to have THIS house if I'd waited. This is my dream home, it is everything I wanted, and I'd have happly paid more than the asking price at the time, so I have no regrets.

Would I buy now, if I was a FTB? Probably, if I could get a really good deal. When I went from renting to buying, the mortgage was significantly less than the rent I had been paying. But I had a good deposit. It all depends on your circumstances. It is worth making enquiries about available mortgage deals, especially as a drop in interest rates may be on the cards. Just so you keep your options open.

BTW... I'm not an EA :rotfl:

rozeepozee

I would agree that most landlords appreciate, nay, treasure good tenants! I've only had one bad experience so far. Apart from that my tenants have all been careful with the property and paid the rent on time. I try to keep them happy and make sure I let attractive well furnished properties, I recently had an estate agent come round for a "market appraisal" and he told me that I am undercharging and should ask for a rent of 200 quid a month more than what I charge my tenants at the moment. I wouldn't put the rent up to this amount as I'd rather keep my lovely tenants and want them to stay for as long as they please! Any way, since I manage my own properties, I don't have to pay extorionate letting agents fees which would swallow up any increase in rent

Incidentally, and so I'm not too off topic, I bought my properties four or more years ago and haven't bought anything since because I felt that FTBers were being priced out and so property prices were bound to go down in the next 5 to 10 years even if they went up a bit more first. If FTBers can't afford to buy, who do the 2ndTBers sell to in order to buy their next home???

DrStep

rozeepozee wrote:

I would agree that most landlords appreciate, nay, treasure good tenants! I've only had one bad experience so far. Apart from that my tenants have all been careful with the property and paid the rent on time. I try to keep them happy and make sure I let attractive well furnished properties, I recently had an estate agent come round for a "market appraisal" and he told me that I am undercharging and should ask for a rent of 200 quid a month more than what I charge my tenants at the moment. I wouldn't put the rent up to this amount as I'd rather keep my lovely tenants and want them to stay for as long as they please! Any way, since I manage my own properties, I don't have to pay extorionate letting agents fees which would swallow up any increase in rent

Incidentally, and so I'm not too off topic, I bought my properties four or more years ago and haven't bought anything since because I felt that FTBers were being priced out and so property prices were bound to go down in the next 5 to 10 years even if they went up a bit more first. If FTBers can't afford to buy, who do the 2ndTBers sell to in order to buy their next home???

I think you have hit on something there.

Many of the come-lately BTL landlords (due to the hype) are going to be in for a shock - they are going to have to face making a loss sometimes because the rent may not cover the mortgage due to landlords like you. They cannot rasie rents either or they will suffer periods of emtpy tennancy.

I do believe the BTL sentiment is going to quickly change if house prices do not continue to rise in the rates we have seen in the last 4 years. For how long can the amateur BTL landlord haemorrhage money into their investment to riches?

DrStep

GreenB wrote:

Most people who I know who are selling or have sold are buying new houses. Very few people I know who have ever owned have then rented for a long period of time.

I still don't get why people say renting is cheaper - if you are paying an interest only mortgage (which is equiv. to paying rent) then its not always the case. You then have no control over your destiny as the landlord can decide when you want to leave. I can think of several friends who have had to move every 6 to 12 months - One bloke 6 times in 4 years - that doesn't sound fun to me (or cheap if you have to get a removal firm in each time, redirect your post,wreck your credit rating etc).

If you have taken out a interest only mortgage - most people are at their limit of paying it each month, At what point in the future can they consider to increase payments to pay off the capital when theres no money left over??? Either they take on a massive payrise or they take on another job. So at what point can people have families???? Or is that not an option anymore?

REnting can work out cheaper because you can either live in a bigger place for the same money , or a smaller place and still have money left over (the important difference).

You have to find yourself a good landlord - It is "they" that need the good tennants to look after their properties for them at the end of the day. A bad landlord - well, they wont be a landlord for long if they treat their tennants badly.

nelly_2

GreenB wrote:

I still don't get why people say renting is cheaper - .

well seeing as borrowing on a mortgage is the worst percentage wise money you can borrow people pay back over double what they borrow.

Renting and saving up a huge deposit is far more financialy sound an idea.

dccarm

Where I live (Central Scotland) there is very little difference between the cost of renting and mortgaging. We bought our flat because it would have cost more to rent a similar flat than to buy and pay a mortgage. I have a three bedroom flat with a monthly mortgage payment of £500 (over 15 years). A similar flat to rent would easily cost the same, and looking at the local market, probably about £100 more.


So obviously whether renting or buying is more "financialy sound" depends on local circumstances as well as relative interest rates.

Ian_W

nelly wrote:
well seeing as borrowing on a mortgage is the worst percentage wise money you can borrow people pay back over double what they borrow.

Shurely shome mishtake!
I thought mortgage borrowing was one of the cheapest forms of loans? The fact that you may be paying back double what you borrow is due to the fact that mortgages are generally over a much longer term than other loans?
Am I missing something?