How much to rent?

PasturesNew

ManAtHome wrote: »

Or to put it another way - how much better would the economy be if people were spending £500 a month on housing and the other £500 somewhere else..?

Ooops, sorry, forgot - we are well-placed and stable and all that.

It'd be even better if it were lower, say in line with social housing figures. That'd be fantastic for all of us! Finally we'd be able to afford stuff! Stuff like things and holidays and meals out!

pickledpink

carolt wrote: »

Why strange? Sensible, to lock in their profits before prices crash.

That way, they'll be able to buy two properties in a couple of years for your one!

They'll have to save up about a Million Pounds in 2 years then to buy 2 of mine! :rotfl: Bit more actually...........

Anyway, if you all think buying is such a bad investment why are you all scrimping and scraping to save up the deposit for one?:rotfl:

Something else too.......I don't believe you lot who claim they have the likes £200k in savings....it's all wishful thinking. Pastures New should read back on some of her old posts - she lives a terribly frugal lifestyle - because she has to.

beingjdc

pickledpink wrote: »

Anyway, if you all think buying is such a bad investment why are you all scrimping and scraping to save up the deposit for one?:rotfl:

Because for as long as governments run economic policies based on permanent inflation, owning assets will beat owning cash over the long term - as long as you don't buy at or near the peak of the cycle in each particular asset. Like housing now.

pickledpink

So in that case then it proves how better off you are buying rather than renting.

Of course, it's always better to buy when houses are in a slump - and it's always better to sell when houses are at a premium. But as property has highs and lows all the time - ultimately they always go up eventually. You just need to ride the waves.

Even if property were to drop by 30% they still wouldn't reach the levels they were at 10 years ago. And we all know how quickly time flies.

It's onlt the FTBs who need to be prudent at the moment then? For someone who is upsizing or downsizing it's all relative as all property is affected by price hikes or drops. If mine goes down - so does everyone else's. And when mine goes up - theirs do too. I suppose it doesn't make much odds to the average homeowner.

beingjdc

If you're not going to move or remortgage, then once you've bought, the price in future makes no difference, no, apart from saying "ooh look how much extra I can leave to my kids", or "ooh look how much more I could have got for my money if I'd waited".

If that doesn't matter, then sure. To me even a 20% real-terms fall (in London) would make the difference between whether I can afford a 2-bed flat where the second bedroom is a cupboard, or a spacious 2-bed flat in a nicer area, or even a terrace with a garden.

In point of fact, I don't really intend to stick around in London unless something unexpected happens like prices halving, but there we are - the futures market is as of now predicting a 25% real terms fall between now and the end of 2010.

So I'll hang on, for as long as I can rent an ensuite room in a nice 2-bed flat on the borders of zone 1 for less than the interest would be on a grotty studio, and get 6.5% tax-free on my savings which would otherwise be locked up in a deposit.

PasturesNew

pickledpink wrote: »

Something else too.......I don't believe you lot who claim they have the likes £200k in savings....it's all wishful thinking. Pastures New should read back on some of her old posts - she lives a terribly frugal lifestyle - because she has to.

ha ha ha .... how stupid you are.
Shoo... get thee gone with thy naive mindset.

beingjdc

PasturesNew wrote: »

ha ha ha .... how stupid you are.
Shoo... get thee gone with thy naive mindset.

Quite. I live a terribly frugal lifestyle too! I enjoy the challenge, and I'd rather have savings and investments than most 'things' - I've trained myself out of the mindset that the way to be happier is to have more stuff.

That doesn't mean I'm tight with my family or friends, and it doesn't mean I couldn't spend more - I consider a month where I don't make a 4-figure contribution to my ISA, savings account, or something similar, to be a failure.

PasturesNew

beingjdc wrote: »

I consider a month where I don't make a 4-figure contribution to my ISA, savings account, or something similar, to be a failure.

What PP's on about though is that, reading my posts, I don't even START with a 4-figure income. And am a single-person household. So, where's this mythical money come from.

All my savings is directly from HPI. I bought when I was mortgageable for one tiny short period. And I sat in the house. For 7 years. That's it. It just happened to be a 6-bed house where they went up handsomely.

However, if I do ever get a good income again, I won't change my frugal ways. It's ingrained!

Bf109

pickledpink wrote: »

Something else too.......I don't believe you lot who claim they have the likes £200k in savings....it's all wishful thinking.

I agree. We have scarcely got £150k!

123oleary

barnaby-bear wrote: »

Not so simple:

With that level of savings - likely to be a higher band tax payer so
£12k reduced to £7.2k (basic rate £9.6k) after tax (offset mortages attractive to higher band tax payers over savings for this reason - plus if made redundant and all savings in an offset - can claim benefits rather than use savings)

If taking all the interest to pay the rent then next year your money is only worth (take inflation 5%) = 240/1.05 = £228.57k and rent liable to rise while capital savings depreciate over several years

with that level of savings it will probably have been built up over a few years so it is possible full use of isas and tessas have been used meaning less tax to pay