Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

Rentings just wasted money...or is it?


MrXxxx

Recommended Posts

  • Replies 60
  • Created
  • Last Reply
TheCountOfNowhere
13 minutes ago, MrXxxx said:

Though others might be interested in this...with the numbers to support the arguments for/against:

https://m.youtube.com/watch?v=HQk6aD2AHXE

 

The MsM went through a stage circa 2012 to 2014 saying its cheaper to buy than rent. 

They were right. 

It only took 4 years of 0% interest rates and massive q e and an crazy prop scheme. 

That magic window didn't last long. 

Take from that what you want. 

Link to comment
Share on other sites

2 minutes ago, TheCountOfNowhere said:

The MsM went through a stage circa 2012 to 2014 saying its cheaper to buy than rent. 

They were right. 

It only took 4 years of 0% interest rates and massive q e and an crazy prop scheme. 

That magic window didn't last long. 

Take from that what you want. 

But what this clip shows Count is that buying is only better in the extreme proptastic environment that we have had for the last 10 years max!

Link to comment
Share on other sites

TheCountOfNowhere
1 minute ago, MrXxxx said:

But what this clip shows Count is that buying is only better in the extreme proptastic environment that we have had for the last 10 years max!

You need to define better. 

You coulda made a fortune on bitcoin with your housing deposit and now own a private jet 🤣🤣🤣🤣

You'd have been better off buying persimmon shares in 2009 than buying a house. 

Better... Hmmmm... That's subjective. 

Link to comment
Share on other sites

2 hours ago, TheCountOfNowhere said:

You need to define better. 

You coulda made a fortune on bitcoin with your housing deposit and now own a private jet 🤣🤣🤣🤣

You'd have been better off buying persimmon shares in 2009 than buying a house. 

Better... Hmmmm... That's subjective. 

True, financially...but security of tenure, no...although in the comments box someone makes a nice comment in this regard "You stop paying your taxes and then see who owns your house!"...

Link to comment
Share on other sites

I rented a small starter home for a very long time in an area for work, but not somewhere I wanted to live long term.  Was OK while saving and earning interest to help pay the rent.  I did do some sums and reckoned I would have needed 3 to 5% HPI just to break even owning a house so with a fortunately decent landlady it was fine. Then interest rates went down and HPI really took off.  Forced me to buy, but where I wanted as a reno project.  And that took me to a very different and better life.  I did the time, now I'm doing the crime!

Link to comment
Share on other sites

TheCountOfNowhere
20 minutes ago, No One said:

Before I watch the video, what I say is about that is:

It's better to buy than rent in the beginning of HPI

It's better to rent than buy at peak and during a HPC

Are we at the beginning or the end? 

Link to comment
Share on other sites

1 hour ago, TheCountOfNowhere said:

Are we at the beginning or the end? 

Well I hope we are not at the end of a HPC otherwise there are going to be a lot of disappointed people on this site!

Link to comment
Share on other sites

3 hours ago, TheCountOfNowhere said:

Are we at the beginning or the end? 

Fuck if I know. The BOE is dead set in keeping HPI going at the cost of the currency and the future of the nation. I gave up on HPC, both in theory and tos.

Link to comment
Share on other sites

TheCountOfNowhere
1 hour ago, MrXxxx said:

Well I hope we are not at the end of a HPC otherwise there are going to be a lot of disappointed people on this site!

That's something many won't have considered. In real terms could the housing market be near the bottom? 

Has money pretty much become worthless since 2000? 

Id say no, based on the price of food and wages, but nothings made sense since 2000.

 

Link to comment
Share on other sites

TheCountOfNowhere
52 minutes ago, Tdog said:

A HPC in relation to wages is 100% guaranteed sooner or later ... a nominal HPC in relation to what people have saved is a different matter.

Sadly that is true. 

 

The frugal, the workers, the sensible have been robbed. 

 

Worth noting tho... That savings relative to house prices since 2007 are up.

 

Link to comment
Share on other sites

10 hours ago, TheCountOfNowhere said:

That's something many won't have considered. In real terms could the housing market be near the bottom? 

Has money pretty much become worthless since 2000? 

Id say no, based on the price of food and wages, but nothings made sense since 2000.

 

Good point, its very easy to be `blind sided` by the outliers I.e London/SE...if local properties are within the historical average of 3.5-5 times local salary we could be at the bottom, and that is assuming that the future behaves the same as the past....the problem with ZHC and TC is getting a reliable fix on what is now an average local salary!

Link to comment
Share on other sites

26 minutes ago, MrXxxx said:

Good point, its very easy to be `blind sided` by the outliers I.e London/SE...if local properties are within the historical average of 3.5-5 times local salary we could be at the bottom, and that is assuming that the future behaves the same as the past....the problem with ZHC and TC is getting a reliable fix on what is now an average local salary!

Last time I did a calculation a few years back, local full time median salary in a big town in the SE was 19k.

I see no property for £70k-£100k. Not even a park home.

Link to comment
Share on other sites

TheCountOfNowhere
55 minutes ago, Noallegiance said:

Last time I did a calculation a few years back, local full time median salary in a big town in the SE was 19k.

I see no property for £70k-£100k. Not even a park home.

Yeah, but it's shot up to 19.5k now... 

Link to comment
Share on other sites

Democorruptcy
1 hour ago, Noallegiance said:

Last time I did a calculation a few years back, local full time median salary in a big town in the SE was 19k.

I see no property for £70k-£100k. Not even a park home.

How quaint, still looking at a single salary multiple?

£19k x 2 = £38k

£38k x 4.5 = £171k mortgage

£171k = 75% so divide by 3 = £57k, a 5% deposit and a maybe a 20% HTB loan

Can you see any HTBs for a £228k that assumes no previous equity or savings to add? 

 

Link to comment
Share on other sites

17 minutes ago, Democorruptcy said:

How quaint, still looking at a single salary multiple?

£19k x 2 = £38k

£38k x 4.5 = £171k mortgage

£171k = 75% so divide by 3 = £57k, a 5% deposit and a maybe a 20% HTB loan

Can you see any HTBs for a £228k that assumes no previous equity or savings to add? 

 

I guess some of us don't want to sell both Mum AND Dad's life to a job we dont want just because bankers think low interest rates and inflated housing is a great idea. For them.

I like time, space, family and the notion that large sections of humans previously existed on one salary with a place to live. So it's possible, however much the propaganda would try to tell us it's impossible but won't tell us that the alleged impossibility is down to nothing but enforced debt.

The current illusion of choice doesn't allow us to freely choose. It forces us into false choices.

Link to comment
Share on other sites

Democorruptcy
4 minutes ago, Noallegiance said:

I guess some of us don't want to sell both Mum AND Dad's life to a job we dont want just because bankers think low interest rates and inflated housing is a great idea. For them.

I like time, space, family and the notion that large sections of humans previously existed on one salary with a place to live. So it's possible, however much the propaganda would try to tell us it's impossible but won't tell us that the alleged impossibility is down to nothing but enforced debt.

The current illusion of choice doesn't allow us to freely choose. It forces us into false choices.

I agree but the problem is that enough people are prepared to do it. A lot of houses that just dad worked for are now being happily bought by a working couple at higher joint income multiples. JIMJAMs = Joint Income Mortgage Just About Managing.

Link to comment
Share on other sites

TheCountOfNowhere
45 minutes ago, Democorruptcy said:

How quaint, still looking at a single salary multiple?

£19k x 2 = £38k

£38k x 4.5 = £171k mortgage

£171k = 75% so divide by 3 = £57k, a 5% deposit and a maybe a 20% HTB loan

Can you see any HTBs for a £228k that assumes no previous equity or savings to add? 

 

What are the marriage and divorce rates? 

 

Just saying. 

Link to comment
Share on other sites

2 hours ago, Democorruptcy said:

How quaint, still looking at a single salary multiple?

£19k x 2 = £38k

£38k x 4.5 = £171k mortgage

£171k = 75% so divide by 3 = £57k, a 5% deposit and a maybe a 20% HTB loan

Can you see any HTBs for a £228k that assumes no previous equity or savings to add? 

 

I think we need to separate what we're trying to assess.As I've said elsewhere.Single salry multiples are about the most reliable indicator of where we are in teh bubble.

Joint incomes includes a hsot of assumptions about hosuehold formation that mean hosuehold incomes aren't a relaible measure of where we are.

In terms of buying,absolutely take your point about JimJams.Super description.

2 hours ago, Noallegiance said:

I guess some of us don't want to sell both Mum AND Dad's life to a job we dont want just because bankers think low interest rates and inflated housing is a great idea. For them.

I like time, space, family and the notion that large sections of humans previously existed on one salary with a place to live. So it's possible, however much the propaganda would try to tell us it's impossible but won't tell us that the alleged impossibility is down to nothing but enforced debt.

The current illusion of choice doesn't allow us to freely choose. It forces us into false choices.

Things have changed for now.The distortions introduced by the various basel reforms and allowing BTL mortgages to credit availability have meant working families increasingly have only one route to security of tenure and that involves taking a shedload of risks with IR's and govt support for failed insito's such as RBS.

34 minutes ago, Tdog said:

So all those single double should be looking at 2 x salary?

And all those couples should stick down a fulltime wage as obviously they wont ever have kids.9_9

The growing number of people on zero hours contracts, people contracting, working part time etc...

You seem to imply women have never worked until the housing boom of the last couple of decades, and if you go back over the last century you'll see house prices were based on 1 x salary even with wimmin working.

Quite simply without the last 13 years of bank bailouts in varying form i'd imagine prices would be 4/5 x 1 average salary.

Proabably less to be fair as the failures were legion.RBS/Halifax/B&B/A&L etc etc.

Link to comment
Share on other sites

I've rented for most of my life because that's what has suited me; now I have bought.

In neither case was the main consideration financial so I certainly don't regard rent as wasted money; renting enabled me to do jobs across the country which I would not have taken if i owned a house.  This meant I earned more money which more than offset the rent.

I'd say most people rent somewhere smaller than they would buy and this in itself saves them money.  I rented small flats which I would not ordinarily consider buying though did happen to buy one, from the landlady, as the mortgage was half the rent so it seemed a bit daft not to.

 

Link to comment
Share on other sites

Democorruptcy
3 hours ago, Tdog said:

So all those single double should be looking at 2 x salary?

And all those couples should stick down a fulltime wage as obviously they wont ever have kids.9_9

The growing number of people on zero hours contracts, people contracting, working part time etc...

You seem to imply women have never worked until the housing boom of the last couple of decades, and if you go back over the last century you'll see house prices were based on 1 x salary even with wimmin working.

Quite simply without the last 13 years of bank bailouts in varying form i'd imagine prices would be 4/5 x 1 average salary.

I never suggested women weren't working until the housing bubble. However their salaries being leveraged more to lending multiples is part of the reason why house prices are where they are. It used to be 3x Main plus 1x Second not a multiple of joint income I.e. household income. There was someone on here the other day saying their relation was offered 5x joint income. It's not going to drag house prices down to £70k on a £19k income is it?

Link to comment
Share on other sites

On 15/01/2020 at 14:59, Frank Hovis said:

I've rented for most of my life because that's what has suited me; now I have bought.

In neither case was the main consideration financial so I certainly don't regard rent as wasted money; renting enabled me to do jobs across the country which I would not have taken if i owned a house.  This meant I earned more money which more than offset the rent.

I'd say most people rent somewhere smaller than they would buy and this in itself saves them money.  I rented small flats which I would not ordinarily consider buying though did happen to buy one, from the landlady, as the mortgage was half the rent so it seemed a bit daft not to.

 

This is my thinking and what I'm seeing too. Mortgage rates are rock bottom and no real sign of that changing soon. Can get a 10 year fixed for around 2.5%. Seems the best way to take advantage of that is overpay as much as one can to reduce the length of the mortgage and save lots of interest along the way. Get debt free before income reduces to pension level in case poor health comes into play before then anyway.

Not sure how mortgage funding works but if they can fix for 10 years then presumably they can secure the money up front to ensure it costs them a fixed amount over that time, so why not offer fixed rate mortgages for the full 20 or 25 years? Lock in the low prices while they can?

Link to comment
Share on other sites

3 hours ago, BoSon said:

This is my thinking and what I'm seeing too. Mortgage rates are rock bottom and no real sign of that changing soon. Can get a 10 year fixed for around 2.5%. Seems the best way to take advantage of that is overpay as much as one can to reduce the length of the mortgage and save lots of interest along the way. Get debt free before income reduces to pension level in case poor health comes into play before then anyway.

Not sure how mortgage funding works but if they can fix for 10 years then presumably they can secure the money up front to ensure it costs them a fixed amount over that time, so why not offer fixed rate mortgages for the full 20 or 25 years? Lock in the low prices while they can?

That's not my current position. If the mortgage was at 2.5%, the interest alone would be £100 per month more than my rent.

If you look at a 10 year view, and I only owned the house for 10 years, I would have buying and selling costs in the region of £25k. add in basic maintenance of £2,500 per year, insurance etc and that adds up to an extra cost of owing compared to renting of approx. £65k over the ten year period.

Of course the house may go up in value, or it may not. As might the rent.

Historically, in normal times, buying did make sense. But back in the day, annual rent was meant to be 8-10% of the value of the house. 

http://www.liveyield.co.uk/blog/buy-to-let-yields-over-time-series/

I think elsewhere had the value as 100 x monthly rent.

Which means my home is 5* overpriced!

We are living in very strange times.

Link to comment
Share on other sites

Looks like you're in a more expensive part of the housing market in terms of rent v purchase price comparison.

The situation for me is I'm looking to provide the deposit for my brother to buy a home while he is earning minimum wage with a view to paying it off before he retires and has to survive on state pension, to avoid the uncertainty of having to rent or rely on social housing or whatever state assistance may or may not be available at that time.

He can get a mortgage up to around 60-70k based on affordability so that means properties well under £100k, and the closer to 60-70k the better in terms of how much of my savings I'd have to tie up in his place. This likely means apartments rather than houses and all the issues with leases and service charges, which is why I'm trying to make sure it's the best way forward and no major gotchas a few years down the line when it's expensive to change tactics.

For that scenario a mortgage is way cheaper than the rent, at current prices, which is one reason he wants to stop paying rent and pay towards a mortgage instead.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    No registered users viewing this page.


×
×
  • Create New...