If renting is dead money what's this

Lunar_Eclipse

neas wrote: »

In the current climate Renting IS NOT dead money lol, far from it. The FTBers renting will be laughing all the way to the bank as their first homes get reduced by ncie 30-40k drops... yuumy yummy for my tummy.

Having read many posts of this nature over the past few days, I feel compelled to offer some balance by pointing out that the opposite can be true.

First time buyers are the most obvious market segment better off renting than buying, because they typically have a high LTV and minimal equity. However for people with a reasonable amount of equity in their house this is not necessarily true. Personally speaking, our mortgage is under £700/month vs a rental value of £2500-3000, which we couldn't afford in relation to our income. £700 would get us a one bedroom flat, which would be a very tight squeeze for a family of four. I appreciate this is a very specific example, but an alternative real one none the less.

Additionally, whilst house prices on average are falling, that does not mean that prices are falling for all houses. It really depends on the area, specific property and local vicinity - at the moment at least. Flats are taking the worst hit, due mainly to supply and demand factors. The market is flooded with them so buyers have lots of choice and can take their pick. Family homes can be very under supplied in many areas which keeps prices rising. This is especially true if good schools and transport links are close by. A desirable house in a desirable area is still doing well in my experience. (By well I actually mean very well - a lot of bidding beyond asking prices.)


So my thoughts in this area are that everyone needs to do a lot of research based on their own personal circumstances and not sensationalised media headlines and make decisions based on that information. No-one has a crystal ball to see what might or might not happen.