There is no crisis. Buying your own home is a luxury, not a right

[Sockpuppet]

Agreed.

Over the next 12 months worst case scenario (for me) is that prices stay the same. Best case is a reduction by maybe 10% which is a very real possibility. The houses I am looking at that is only £20k so not a lot.

If I rent at £600 even and the mortgage would be £1000 that £400 a month (or £5k a year) starts to look attractive.

Couple that with contracting savings (new role is £50/day better for me) so over the next siz months I am looking to save maybe another £20k easily. Which assumes that I manage to somehow piss £20k up the wall in 6 months (this is possible..rent or no rent).

So rent for 12 months then walk into a buying position with a £30k + deposit and go for a 75%-80% mortgage.

[Cyberman]

It's amazing how many people really believe that. Mortgage interest is dead money, and certainly at the moment mortgage interest is far more dead money than renting. The homeowner can pay a mortgage for 25 years and they own a house yes, but then a renter can save for 25 years and pay for a house with cash - so no advantage either way. However whilst the renter can choose different forms of investment to make the money grow, the homeowner is stuck with only one.

Mortgage interest is not dead money in an appreciating market, and in the long-run houses always appreciate in value. I bought a 4 bed house for just under 100,000 pounds 20 years ago. It is now worth 360,000 pounds and my mortgage is 90,000 pounds. Therefore, my investment is now showing me equity of 270,000 pounds.

My house now costs me under 300 pounds a month net on an offset mortgage. If I was renting this property it would be costing me about 1300 pounds a month. So not only do I have all of that equity but I am saving 1,000 pounds a month in rent.

You would not be able to rent a 4 bed detached for 20 years and then have saved enough to pay cash for that same house, so your theoretical idea simply does not add up if you wished to attain my current homeowning position. In fact your theory is laughable!!

[TimberWolf]

In fact your theory is laughable!!

Exactly, interest payment reduce in real terms while rents increase with the cost of living. You might invest any initial savings made by renting, but this saving becomes less every month until after a few years the difference becomes negative, i.e. you eventually pay less in mortgage interest than you would in rent - and eventually you end up with a house. If you do rent (and it does seem like a good short term option at the moment) it should be done as cheaply as possible IMO. Ideal might be to buy before a boom and sell before a recession.

But there are a lot of other variables involved, including having a house larger than you need (and paying more council tax), price fluctuations and maintenance costs. These may be costs to a renter or hidden in rental payments too of course.

[BrilloPad]

Exactly, interest payment reduce in real terms while rents increase with the cost of living.

We are now in an era of low inflation though - unless governments decide to print money to get us out of current "crisis" - and we are a long way from needing that.

And, at the moment, mortgage rates increasing. of course, this is a short term effect.

[BrilloPad]

Oh, really?

Any other types of investment that you'd also like banned, while you're at it?

Why is property investment 'morally wrong' exactly.

Are you some sort of Maoist?

In many ways I agree with your post.

But, the issue comes when the discrepency between the rich and the poor becomes too wide. IMO that is what caused the great depression. At the moment the gap between the haves and the have-nots is wider that at any time for 80 years.

Someone recently told me he needed high house prices so he could borrow alot to get his children on the property ladder! It seems these days the only way of getting started is to have rich parents.

I am probably one of the most right wing people on this board - I just believe in a more level playing field for those who wish to work their way up.

[BrilloPad]

Mortgage interest is not dead money in an appreciating market, and in the long-run houses always appreciate in value.

Not in Germany they don't. I do wonder if this country will ever break its obsession with the housing market.

I remember someone asking on these boards why this country has just decided to abandon manufactoring and sees its future only in providing services.

I see both the above of symptoms of what is wrong with this country.

[HRH]

Really? a real working class hero!

She was certainly a lower middle class hero. i.e if you expected the country to owe you a living you probably didn't like Thatcher. If you were willing to get of your backside, work hard and seize opportunities you would have been a Thatcher fan. She empowered people by setting up enterprise zones, tax relief for small business's etc.

Think before you type in future.

[Cyberman]

Not in Germany they don't. I do wonder if this country will ever break its obsession with the housing market.

I remember someone asking on these boards why this country has just decided to abandon manufactoring and sees its future only in providing services.

I see both the above of symptoms of what is wrong with this country.

Comparing the UK housing market with that of Germany is on a par with comparing the inflation rate in the UK with that of Zimbabwe.

[Cyberman]

In many ways I agree with your post.

But, the issue comes when the discrepency between the rich and the poor becomes too wide. IMO that is what caused the great depression. At the moment the gap between the haves and the have-nots is wider that at any time for 80 years.

Someone recently told me he needed high house prices so he could borrow alot to get his children on the property ladder! It seems these days the only way of getting started is to have rich parents.

I am probably one of the most right wing people on this board - I just believe in a more level playing field for those who wish to work their way up.

If people want to be part of the 'haves' then they should get off their back-sides and work for it. Far too many think that that all they have to do is have kids and visit the benefits office for housing and support, with no desire to work to improve their lot. Then they bring up their kids to have the same parasitic philosophy on life.

[oracleslave]

The homeowner can pay a mortgage for 25 years and they own a house yes, but then a renter can save for 25 years and pay for a house with cash - so no advantage either way.

Whilst this is true it doesn't account for the satisfaction that the home owner gets in living in his own house for the 25 years it takes the renter to save sufficent cash to make the purchase. There is something about living in your own place that is far more satisfying than paying someone elses mortgage by renting.