Getting some Perspective

Turnbull2000

borntobefree wrote: »

Erm yes "we" do.....the cost of my mortgage over 21 years has been way cheaper than the cost of renting....and I have something to show for it at the end. To be worse off my house would have to have no value whatsoever. I don't think anyone on here is predicting a crash of that magnitude - the most I have seen is 10%.

So what you spending the money on you've made on your home? My mother is mortgage free but hasn't "made" any money, neither has my Uncle, my Aunt and a cousin. I'm curious.

Of course, everybody could have more money if they didn't have to spend so much on bloated house values. Real money that is, not the mickey mouse money you talk about.

mikthe20

I own my own home with tons of equity so have no particular bone to pick with the OP. However, a couple of points for the IP:

- you're right, it's all in the timing - no point paying £650k for your house now (what goes up must come down?)
- no maintenance costs in over 20 years?
- Main point: You say you can get £2500 per month rent. This equates to £30k per annum. A typical BTL should make 8% gross yield, which after costs would give roughly 5%-6% net yield (ie. equivalent to bank savings rate). On £30k per annum income 8% gross yield target would mean that someone buying your property to rent today should pay £375,000 for it, not £650,000. £650,000 gives a yield a lot less than the bank savings rate. Your house by this indicator is worth £375,000.

We need sanity to return to the housing market so that we have stable economy in which we can all live our lives in a civilised manner.

Turnbull2000

The rent dead money, up or down what difference does it make argument has been done to death on thie forum. Maybe you should search through some of the older threads to see why it matters.

Like many others who have come and gone or tried and failed, you base your points on the economy of three decades ago. Th outlook was very different back then... it wasn't as bad.

Sisyphus

Not sure what you're saying BtbF should I go back in time and buy a place? Or buy now cos "in the long term prices always go up"?

RHemmings

borntobefree wrote: »

ooops sorry that should read 1987:D....My point being.... there seems to be an over-reaction to a down turn on this board. Prices would have to fall a long way before anyone had made a bad financial decision buying a house and would have been better of renting. I sold my first flat for £500 less than I bought it, but in the long run we all make money because as a previous poster said nobody is suggesting that houses are not a good investment. Even if you bought a house now....so what if it is worth less 6 months from now or even 2 years from now? Who buys a property with such a short stay in mind?

Yes, but if we're at the top of a bubble now, and prices are going to be cheaper in a year or two, then we may well make a lot more money over the long term by buying a bit later. Or on the other side of the coin, may have a smaller mortgage, so be paying it for less time and be mortgage free for longer.

Turnbull2000

borntobefree wrote: »

LOL:rotfl:You obviously never lived in Thatchers Britain

You telling me there's been another time when houses were so overvalued, the nation so indebtited, public finances in such a poor state (worst in history, actually), salary growth completely pitiful (below inflation) whilst living costs increase.

I suppose you could go back to the 1930's if you wish to compare the financial industry... or look silly when you don't have a proper answer and use another LOL smilie.

dannyboycey

borntobefree wrote: »

You obviously never lived in Thatchers Britain

Unfortunately, we're still experiencing it. Much of what is wrong with this country can be traced back to her!

pinkshoes

Turnbull2000 wrote: »

My mother is mortgage free but hasn't "made" any money

But on the plus side she'll be entering retirement without having to spend 80% of her poxy state pension on rent, then deciding between eating or heating with the rest of the money, which is what is happening to alot of people who reach retirement without owning their own home.

It happened to one of my grandparents, and I wouldn't wish her standard of living on anyone! If it wasn't for the kind landlord who hardly put her rent up in 10 years (in return for no complaints about above the vile decor!!), then life would have been even worse.

Newbird

btbf - GFY, I hear what you're saying - but FYI...smug mode doesn't go down well around here...we are in a similar position, to you having bought in '84 (1984 that is hehe) for relative peanuts, and I've used my advantage of the years rolling by to help my 3 sons get on the prop ladder..so I'm still not mortgage free, tho I could have been! There is jolly old inflation to consider and everything is relative. No big deal, your equity isn't liquid in your pocket, but if it gives you a good feeling then fine, no need for smug. I was struggling to pay a14% mort rate in the 80s....I struggled thru and yes it was worth it.

Hey, its what's happening NOW, daily lending rates etc. that ppl are worried/confused or whatever about and posting about for help. You just sit tight and massage your ego and congratulate yourself on your equity then mate, there's a good boy.

Newbird

What was yr purchase price of the flat in '87?