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Previously on "No point waiting for cheap houses...."

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  • tim123
    replied
    Originally posted by GreenerGrass View Post
    Whatever, this is in the south east, near London, good transport links, but reasonable house values compared to renting. I can't speak for the whole country but it works for me.
    I don't believe you

    Please tell me where in the SE the normal range of houses can be bought at a rental yield of more that 5% (for a non-student type lets). I don't believe such a location exists.

    Originally posted by GreenerGrass View Post
    Your other point about investing the monthly savings, when inflation returns you will struggle to beat it by much, and when houses start creeping up again and rents rise then renting will be pointless.
    But if you can tolerate living in a craphole for 20 years to save for a house outright and that works for you financially then fine.
    These factors just don't affect the decision. The equation is: whilst it is chaper to rent than to buy, you rent. When it becomes cheaper to buy than to rent, you buy.

    No-one said that you decide today to rent for 20 years.

    tim

    Leave a comment:


  • bobhope
    replied
    I guess the greater fool has arrived.

    Leave a comment:


  • AlfredJPruffock
    replied
    Originally posted by tim123 View Post
    The last time I asked where this was the case I got the answer "Aberdeen".

    Anywhere else, normal houses rent at about 5% of value which is less than the cost of mortgage (at rates obtainable today) plus insurance plus maintenance.

    For "executive" houses the equation is even less in favour of owning.

    tim

    Aberdeen is famous for its Grey Slates.

    Thats fair enough if rents are very low in your area, prices are going down, you have brilliant market timing, and great willpower not to spend the savings on fast cars, women and drink.

    What else is money for ?
    Last edited by AlfredJPruffock; 7 August 2009, 08:14.

    Leave a comment:


  • GreenerGrass
    replied
    Originally posted by tim123 View Post
    The last time I asked where this was the case I got the answer "Aberdeen".

    Anywhere else, normal houses rent at about 5% of value which is less than the cost of mortgage (at rates obtainable today) plus insurance plus maintenance.

    For "executive" houses the equation is even less in favour of owning.

    tim
    Whatever, this is in the south east, near London, good transport links, but reasonable house values compared to renting. I can't speak for the whole country but it works for me.

    Your other point about investing the monthly savings, when inflation returns you will struggle to beat it by much, and when houses start creeping up again and rents rise then renting will be pointless.
    But if you can tolerate living in a craphole for 20 years to save for a house outright and that works for you financially then fine.

    Leave a comment:


  • tim123
    replied
    Originally posted by Lockhouse View Post
    It all depends how large your deposit is. Obviously if you have a big deposit, it's way cheaper than renting.
    Then you are losing the the interest that you could earn on the money (currently 4% for a two year bond).

    Leave a comment:


  • tim123
    replied
    Originally posted by GreenerGrass View Post
    Thats fair enough if rents are very low in your area, prices are going down, you have brilliant market timing, and great willpower not to spend the savings on fast cars, women and drink.
    But in my area to rent a similar house would cost at least double the interest based on a 4% rate mortgage.
    A repayment mortgage over 15 years is just a couple or few hundred quid a month more than renting, and paying down the capital at a much quicker rate than you could save by renting.
    The last time I asked where this was the case I got the answer "Aberdeen".

    Anywhere else, normal houses rent at about 5% of value which is less than the cost of mortgage (at rates obtainable today) plus insurance plus maintenance.

    For "executive" houses the equation is even less in favour of owning.

    tim

    Leave a comment:


  • EternalOptimist
    replied
    Originally posted by swamp View Post
    If you rent a house you can save lots of money and buy a house outright in twenty years. In that time period if you're clever you can jump in and buy when the market is low.

    I am about to rent a house. The (likely) rent is cheaper than the interest on a typical mortgage to buy.
    absolutely spot on.

    Live in a hole, save like mad, bide your time, buy cheap sell dear



    Leave a comment:


  • tim123
    replied
    Originally posted by Cyberman View Post
    If you buy a house you will eventually own it and then have about twenty years rent free and mortgage free in retirement. If you don't buy and you live to 100 it could indeed be very expensive renting !!!!
    But as renting *is* cheaper you invest the monthy savings that you have made and after 25 years will have savbed more than the value of the house.

    tim

    Leave a comment:


  • Bright Spark
    replied
    Originally posted by sasguru View Post
    Is you house worth 330K after the rise it has experienced in the last 2 years?

    My Garden shed is worth more than that!

    Dim

    Leave a comment:


  • sasguru
    replied
    Originally posted by Cyberman View Post
    would need to find a million pounds in cash to buy my house in 20 years time, instead of 330K now. You must be crazy !!
    Is you house worth 330K after the rise it has experienced in the last 2 years?

    Leave a comment:


  • Cyberman
    replied
    Originally posted by swamp View Post
    If you rent a house you can save lots of money and buy a house outright in twenty years. In that time period if you're clever you can jump in and buy when the market is low.

    I am about to rent a house. The (likely) rent is cheaper than the interest on a typical mortgage to buy.

    Bearing in mind that my house value is 3 times what I paid 20 years ago, given that scenario you would need to find a million pounds in cash to buy my house in 20 years time, instead of 330K now. You must be crazy !!

    Leave a comment:


  • GreenerGrass
    replied
    Yeah, you need a 25% deposit minimum obviously.

    I could rent a crappy 3 bed terraced house cheaper, but I'm comparing like with like.

    Leave a comment:


  • Lockhouse
    replied
    It all depends how large your deposit is. Obviously if you have a big deposit, it's way cheaper than renting.

    Leave a comment:


  • GreenerGrass
    replied
    Yes, about £1300 for a detached or nice decent sized semi with 3 bedrooms and a garage.
    Last edited by GreenerGrass; 6 August 2009, 07:49.

    Leave a comment:


  • expat
    replied
    Originally posted by GreenerGrass View Post
    Thats fair enough if rents are very low in your area, prices are going down, you have brilliant market timing, and great willpower not to spend the savings on fast cars, women and drink.
    But in my area to rent a similar house would cost at least double the interest based on a 4% rate mortgage.
    A repayment mortgage over 15 years is just a couple or few hundred quid a month more than renting, and paying down the capital at a much quicker rate than you could save by renting.
    BBC mortgage calculator says a 200k mortgage over 15 years at 4% costs 1499.01 per month. Interest only is 666.66.

    Are you really saying that a 3-bedroom house in your area rents for about £1300 a month?
    Last edited by expat; 6 August 2009, 07:44.

    Leave a comment:

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