House prices > Rent = Price fall

[Pickle2]

Ok... now I know your economics degree was complete pants.

There is finite value in the world economy. The fact you dont understand that puts your views into perspective.

No Tay, your wrong. Banks have the power to create money out of thin air via "credit". When you borrow 100k from the bank, they dont have that cash sat there in notes waiting for you. They just stick the 000's into your account. Google fraction reserve lending, how is money created, fiat currency etc etc.

The fact you dont understand that puts your views into perspective.

So the more banks can lend out, the money the money supply grows. There is no finite limit to the money supply. It (usually) grows continually, and this is called inflation.

[gingerjedi]

I think you will find that renting legislation will be improved as more people lose houses and have to become renters - frankly the rights of the tenant in this country are crap, EU should have really stepped into this and get standard continental rights over here too. That shoud also weed out some wanna be BTLers who seen it on TV and wanted to get rich quick.

Where's the 'gobsmacked' smiley? It's not a bloody charity, though try telling that to my father in law who has a 'junky' tenant that doesn't pay her rent yet demands he replaces the windows and doors she smashed.

[AtW]

Where's the 'gobsmacked' smiley? It's not a bloody charity, though try telling that to my father in law who has a 'junky' tenant that doesn't pay her rent yet demands he replaces the windows and doors she smashed.

I agree it is not charity. And I fully agree if tenant is like you describe then they should be kicked out - I have no problem with that. The laws should protect good citizens, or good renters in this case - those that pay on time, don't create trouble etc.

Let me just give you example of what I mean: in the last place that I rented (and it was the best place) I rented it for 3+ years from company that owned lots of properties, they decided to sell them off so they gave notice - barely 2 months or so. That's bull - for non-very-short term lets it should not be possible to kick out tenant that pays on time and who lived for 3 years just like that. I believe you can't do that this easily in the continent.

Also this crap about "no pets" - it should be possible to get a pet without any permission, however if this pet causes damage than obviously tenant should pay. Perhaps deposit should be doubled in case of pets but I don't like the idea of practically begging someone to be allowed a pet - it's none of landlords business if I have a pet or not. My landlord allowed me to have a pet though.

[tay]

No Tay, your wrong. Banks have the power to create money out of thin air via "credit". When you borrow 100k from the bank, they dont have that cash sat there in notes waiting for you. They just stick the 000's into your account. Google fraction reserve lending, how is money created, fiat currency etc etc.

The fact you dont understand that puts your views into perspective.

So the more banks can lend out, the money the money supply grows. There is no finite limit to the money supply. It (usually) grows continually, and this is called inflation.

When you can find the word money in the post you quoted you will be making sense. But you wont as I said value.

Nice rant.. if pointless.

I changed it to value after my first post as I realised I had made a mistake in terms.

[Pickle2]

When you can find the word money in the post you quoted you will be making sense. But you wont as I said value.

Quote:
If you took time to study economics you would have known that wealth can be created and economics grow, it's not a closed system with finite money.

Quote:
Ok... now I know your economics degree was complete pants.

[AtW]

When you can find the word money in the post you quoted you will be making sense. But you wont as I said value.

Value is growing with the population growth or with increase in demand from population that formerly could not afford it.

[expat]

... it is possible to rent a much nicer home for much less than actually buying it. I can rent a 200k house for £800/month = £9600/yr. The interest on the average 200k mortage needed to buy it @ say 7% a.p.r = £1166/mo = £14000/yr. That is without all the additional costs involved in home ownership and repaying the capital! In a normal market situation the rent should be higher. My calculations prove that house prices are at least 40% overvalued at current prices....

Yes and no. Your point is sound, as far as it goes, and is one that I make often. Rent is "money down the drain", but so is interest. Actually both could be regarded as the price you pay to get something that you want; and indeed the interest could be higher than the rent on a similar house.

But the good being purchased for the price, whether rent or interest, is not the same. Which is preferable depends on the desires of the buyer (/renter). When you rent, you have less responsibility; when you buy, you have more control. When you rent, you have more flexibility to change, and are more or less indifferent to house prices; when you buy, you only pay until the end of the mortgage, and you may hope and expect that the price you pay in interest will not only give you a roof over your head (as would the rent) but also the opportunity to invest (the capital repayments) in an appreciating asset not available to renters.

There are many more differences between the same house as rental and as owned. Personally, for example, I am buying, but not because I expect to profit from it. I'm more concerned about not being subject to landlords' and agents' whims. I buy because then it's mine, and I prefer my life to be mine.

[tay]

Quote:
If you took time to study economics you would have known that wealth can be created and economics grow, it's not a closed system with finite money.

Quote:
Ok... now I know your economics degree was complete pants.

That isnt the one you quoted is it... check again sunshine.

[bogeyman]

Turion

It seems to be your mission here to cast doom and despondency amongst those of us who own and invest in property.

What's your motive exactly?

[HRH]

I am not bitter. And I am certainly not jealous - as I said it clearly I would NOT want to be that kind of person.

The reason those speculants are scumbags is because they cause economical problems that will affect good people too who had nothing to do with this speculation - this makes speculants scumbags in my book.

If you mean the greedy bankers who creamed off millions and sold our economy down the river I agree.... You don't mean those who had the sense to but some BTL houses with their spare wonga though?