Reply to: UK economy 'skating on thin ice'

[scooterscot]

I agree, I cannot understand wny anybody would *want* to rent for their whole life.

But I also cannot understand why people are falling over each other to buy property at the current inflated prices, when they can rent the same property for much less.

Historically, buying a house has been cheaper that renting, so you should aim to buy, but when renting is cheaper than buying why bother trying TOO hard.

tim

I reckon we’re witnessing a change in progress from home ownership to rent-man-ship on a large scale. Like in France for example most homes that are owned are let, ergo people rent, as it’s not affordable to buy.

People keep talking about inflated house prices the crash is coming, well where is it? We’ll be in 2010 people will still be saying it. If somewhere is desirable to live people will pay the money for it, period. Someone will only pay the price for what it’s worth to them. I’ve followed this path myself and I’m not worried about rising interest rates, I don’t believe the average Brit’s finances are managed that badly.

[Francko]

I agree, I cannot understand wny anybody would *want* to rent for their whole life.

But I also cannot understand why people are falling over each other to buy property at the current inflated prices, when they can rent the same property for much less.

Historically, buying a house has been cheaper that renting, so you should aim to buy, but when renting is cheaper than buying why bother trying TOO hard.

tim

Well, considering the interest rates at over 6% if you buy with 10% deposit you are probably going to lose out a good 20% compared to renting. If that's the house you are living in, thus saving on rent, it can be fine. If you are buying as an investment then it's a no-sense decision at the moment I think.

[tim123]

2, No matter what anybody says about house price booms history has shown that over a 25 year period houses always appreciate in value and I cannot understand somebody who would rent for their whole life instead of taking a mortgage (if necessary) and buying a property and having the asset to perhaps release in later life
Milan.

I agree, I cannot understand wny anybody would *want* to rent for their whole life.

But I also cannot understand why people are falling over each other to buy property at the current inflated prices, when they can rent the same property for much less.

Historically, buying a house has been cheaper that renting, so you should aim to buy, but when renting is cheaper than buying why bother trying TOO hard.

tim

[rootsnall]

couple of things

somebody said they are renting a flat for 500 quid a month that is 'worht' today 200,000 and they said this is a good deal

my question to the house...

1, If said person is getting a good deal, in my opinion they are only onto a good thing if they are doing something wise (from a capital growth perspective) with the money they are saving by renting a 200k flat at 500 per month instead of having a 200k mortgage, however, if they are blowing the saving on white goods then they are achieving nothing in my opinion as they will lose out in the long term against the mortgagee

2, No matter what anybody says about house price booms history has shown that over a 25 year period houses always appreciate in value and I cannot understand somebody who would rent for their whole life instead of taking a mortgage (if necessary) and buying a property and having the asset to perhaps release in later life

Anybody any ideas to these two questions ?

Milan.

1. It depends on what you want out of life. I consider the money I didn't spend on a mortgage and pi**ed up against a wall in my 20s money well spent.

2. Sounds fair enough but again depends on your circumstances. If ever there was a time to delay buying and try to time the market I would think its now.

[milanbenes]

couple of things

somebody said they are renting a flat for 500 quid a month that is 'worht' today 200,000 and they said this is a good deal

my question to the house...

1, If said person is getting a good deal, in my opinion they are only onto a good thing if they are doing something wise (from a capital growth perspective) with the money they are saving by renting a 200k flat at 500 per month instead of having a 200k mortgage, however, if they are blowing the saving on white goods then they are achieving nothing in my opinion as they will lose out in the long term against the mortgagee

2, No matter what anybody says about house price booms history has shown that over a 25 year period houses always appreciate in value and I cannot understand somebody who would rent for their whole life instead of taking a mortgage (if necessary) and buying a property and having the asset to perhaps release in later life

Anybody any ideas to these two questions ?

Milan.

[Euro-commuter]

That is a good point. After 25 years your rent hasn't turned into a large asset, which you own, and which has given a better return than the majority of stocks and shares.

And neither has the interest on your mortgage, which is what poster lilelvis2000 referred to.

It is the capital that has turned into an asset, as it would equally have done if you had invested it elsewhere while you rented.

Of course it might be that speculating on the housing market is more profitable than investing in the economy. Please just don't call that a "healthy" housing market; it's diseased.

Or it may be that you feel that you just wouldn't invest the same amount as the mortgage capital repayments: fail enough, but that belongs to psychology, not arithmetic.

[BrilloPad]

Looks like the idea of the time value of money is beyond some people here!

The inflation outlook is always changing. But generally benign.

Nice piece inthe Telegraph today blaming Brown for putting lots of Doves in the MPC - helping out the economy too much and causing current economy/inflation boom. Niuce to see the Telegraph helping Brown out...

[Buffoon]

I recall in the last crash, all those bright shiny new yuppie flats & houses in the Docklands were being let out via the local authority to asylum seekers.... so what we really need is more AS/immigrants

True, but I haven't seen ads from the council in the local paper looking for such property recently (could be because I haven't looked hard enough).

In any case they are looking for 2+ bedroom places. Even the 2 beds have to be on the large side. Smaller 2bed and 1 bed/studios will not be of interest.

[threaded]

I recall in the last crash, all those bright shiny new yuppie flats & houses in the Docklands were being let out via the local authority to asylum seekers.... so what we really need is more AS/immigrants

AS tenants are fantastic! What you need to do is join the party, buy a HIMO in a post code that is allowed for AS tenants, (yes they are a little expensive, but that's post code lotteries for you,) and set up three shell building companies to produce the three bids necessary for "upgrades" and "repairs".

It's a license to print money! Just ask any of the numerous New Liebour councillors and MPs who have made their fortunes this way.

[bobhope]

Looks like the idea of the time value of money is beyond some people here!

[Troll]

Yes there will be a demand for housing from displaced families, but when the landlord does the credit check they will find out they are a bad risk and not let to them.

I recall in the last crash, all those bright shiny new yuppie flats & houses in the Docklands were being let out via the local authority to asylum seekers.... so what we really need is more AS/immigrants

[wendigo100]

Fine if you can liquify the assets without too much hardship, not much use if you can't.

Not true. There is no hurry to liquify. You can wait five or even ten years if you want. Everyone knows that properties rise in price over long term. Alternatively, you might want to stay living there, rent-free!

[Lucifer Box]

but...but...but when the crash comes, and all those homes are re-possessed leaving thousands of displaced families - won't that boost the rental market?

Are you crazy? Haven't you heard, it's different this time. House prices will rise by at least 10% pa forever. Buy as many properties as you can now while they are still cheap. Doesn't matter if you overstretch, the capital appreciation will see you through.

[Buffoon]

but...but...but when the crash comes, and all those homes are re-possessed leaving thousands of displaced families - won't that boost the rental market?

Yes there will be a demand for housing from displaced families, but when the landlord does the credit check they will find out they are a bad risk and not let to them.

[Troll]

but...but...but when the crash comes, and all those homes are re-possessed leaving thousands of displaced families - won't that boost the rental market?