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Rentings just wasted money...or is it?


MrXxxx

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2 minutes ago, BoSon said:

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

Yes, for two reasons.

The yield on detached houses is always lower than flats / terraces. However, it normally makes sense to rent a flat as the occupancy time is likely to be less than ten years.

Also, you need to get some distance between what you can pay and what housing benefit would pay. If HB is at £600 per month, there will be a lot of houses, at very varying quality, at that level. If you can afford £1,000 per month or more then a whole new world of better / bigger homes becomes available. Never try and compete with the state's money. You won't win.

The other factor that comes in to play is the shittiness of society. Buying a property now exposes you to a massive risk that is totally outside your control. What if the flats in your block turn to AirBNB or let to the sort of person you wouldn't choose in a hundred years as a neighbour?

Or the whole street becomes a cesspit of HMO's (I have seen this happen to some nice roads of theoretical £1m houses in the suburbs)

There is a lot more to factor in to the buying choice than just the monthly payment.

 

 

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On 22/01/2020 at 13:26, Wight Flight said:

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.

Yes, in your situation I would absolutely be renting and savng rather than going into debt to buy.

I'm probably up on the deal at the moment through buying, coming up for six years owned, but am planning to have a stack of work done in the next year or so which is likely to tip it back the other way into it would have been cheaper to have rented.

Though as I've noted, probably upthread, buying or renting haven't in general been financial decisions for me with a single exception where I switched from renting a flat to buying it because of the big monthly saving.  Rather they have rested upon whatever has suited at a particular time.

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On 22/01/2020 at 14:02, Wight Flight said:

Yes, for two reasons.

The yield on detached houses is always lower than flats / terraces. However, it normally makes sense to rent a flat as the occupancy time is likely to be less than ten years.

Also, you need to get some distance between what you can pay and what housing benefit would pay. If HB is at £600 per month, there will be a lot of houses, at very varying quality, at that level. If you can afford £1,000 per month or more then a whole new world of better / bigger homes becomes available. Never try and compete with the state's money. You won't win.

The other factor that comes in to play is the shittiness of society. Buying a property now exposes you to a massive risk that is totally outside your control. What if the flats in your block turn to AirBNB or let to the sort of person you wouldn't choose in a hundred years as a neighbour?

Or the whole street becomes a cesspit of HMO's (I have seen this happen to some nice roads of theoretical £1m houses in the suburbs)

There is a lot more to factor in to the buying choice than just the monthly payment.

 

 

One of the best posts I've ever read in either the Basement here or on ToS.Sums up the dangers/risks/benefits beautifully succinctly.

 

It's easier to find the bits not in bold.But excellent advice.me and Mrs P rent ona circa 3.5% gross yield.We're investing in our portfolio as opposed to a hosue as we're refugees from leicester.Seen how quixckly good areas become bad.Scars you for a long time.And know a few streets with some pricey houses stuck next toHMO's.

 

For us,another issue is schools.Renting,we can give a months notice and move into a catchment area.Buying and selling can take years.

 

As you say,when you move up to £1000 we're talking rental yields of circa 2%..................why buy it...?

 

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1 hour ago, sancho panza said:

One of the best posts I've ever read in either the Basement here or on ToS.Sums up the dangers/risks/benefits beautifully succinctly.

 

It's easier to find the bits not in bold.But excellent advice.me and Mrs P rent ona circa 3.5% gross yield.We're investing in our portfolio as opposed to a hosue as we're refugees from leicester.Seen how quixckly good areas become bad.Scars you for a long time.And know a few streets with some pricey houses stuck next toHMO's.

 

For us,another issue is schools.Renting,we can give a months notice and move into a catchment area.Buying and selling can take years.

 

As you say,when you move up to £1000 we're talking rental yields of circa 2%..................why buy it...?

 

I am renting at ~3% yield here . When I get advised to buy, I point out that my rent is the same as interest-only mortgage on my house.  Then I get a blank look, and they tell me that if I bought a house, then after 25 years it will become mine.  I just have to accept I am surrounded by idiots.  Brick'n'mortar are a new religion.

 

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1 hour ago, Bear Hug said:

I am renting at ~3% yield here . When I get advised to buy, I point out that my rent is the same as interest-only mortgage on my house.  Then I get a blank look, and they tell me that if I bought a house, then after 25 years it will become mine.  I just have to accept I am surrounded by idiots.  Brick'n'mortar are a new religion.

 

There is a lot of that idiocy about!

When I was renting people with whom I worked used to politely assume that I was relatively poor, this despite knowing I was on a good kick and had an excellent work history, purely because I was renting.  They couldn't conceive why anyone would rent and not buy.

Then owing to a change in circumstances which made owning more suitable I used a lump of the cash I had saved by renting to buy outright.

This represented a mindflip for them as the person they had felt slightly sorry for because they were renting and "therefore" could not afford to buy had now just achieved their ultimate dream of paying off their mortgage in one go.

I still hear that slightly pitying tone when they find out that someone is "still" renting in their thirties or forties but maybe I've now put a bit of a question into it.

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last few posts reminded me of this posted it before somewhere here

IMG_5942.thumb.jpg.5b78bb1fdd81cd26a1ad249a1a9cdbc9.jpgIMG_5943.thumb.jpg.023a6e8fa1e297c09434dc54bf6fcaca.jpg

 

But i still want to buy at some point somewhere out of London, Somewhere i can extend, Somewhere i can have a little workshop but at these prices i sometimes think about going abroad again just to get a little more for my money

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2 hours ago, DoINeedOne said:

last few posts reminded me of this posted it before somewhere here

IMG_5942.thumb.jpg.5b78bb1fdd81cd26a1ad249a1a9cdbc9.jpgIMG_5943.thumb.jpg.023a6e8fa1e297c09434dc54bf6fcaca.jpg

 

But i still want to buy at some point somewhere out of London, Somewhere i can extend, Somewhere i can have a little workshop but at these prices i sometimes think about going abroad again just to get a little more for my money

There are plenty of reasonably priced places like that in Cornwall, Devon and Gloucestershire for three.  Just avoid the tourist traps.

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11 hours ago, Bear Hug said:

I am renting at ~3% yield here . When I get advised to buy, I point out that my rent is the same as interest-only mortgage on my house.  Then I get a blank look, and they tell me that if I bought a house, then after 25 years it will become mine.  I just have to accept I am surrounded by idiots.  Brick'n'mortar are a new religion.

 

It's amazing really.We're buying oilies,potash miners and PM miners.What would a I rather own £300,000 worth of BP/RDSB/Exxon/ENI/Repsol/Barrick/Newmont or a 3 bed semi in a future warzone  diverse urban paradise like Leicester?

Dividend income on oilies at the minute is circa 5% so £300k begets circa £15k.Our rent is circa £9500 without any maintenance costs, buying/selling costs, neighbour disputes.

Most importantly at the moment with a 2/3/13 year old.We're free to move at the drop of a hat for whatever reason we choose.LL is also free to kick us out admittedly but his risk is inherently larger than mine although he's likely unaware of it-(he's a nice guy,I hope his retirement plan works out for him).

 

I think @Wight Flight is right when he talks about buying over the ten year timeframe.If we were going to stay in one spot then I'd consider buying,but renting here and in South Africa will be our most likely option for the foreseeable.

Also,wortht noting as per WF comment that once you get over the £1000 pcm level up here in the midlands,the value is eye watering. Renting on a 2%yield means aside from the purchase price say £500k, plus interest costs over 25 years of say £250k currently plus probably £30k in maintenance(boilers,alarms,roof,fabric,redecoration etc),buying costs £15k stamp plus £3k fees total bill for 25 years accomodation is

500k+250k+£30k+£18k=£798k

Assumes no rate rises,mortgage 100% repayment,rate 3.5%.

On a 2.5% mortgage repayments would be £2243 pcm total repayment £673k

On a 3.5% would be £2500 pcm ie £751k over 25 years.

https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

 

Using the 3.5% option dividing by 25 years you get the hosue costing £31k per annum as opposed to renting for £12k.

I know we'll get someone saying 'but you'll own the hosue in 25 years' which is true,but the portfolio will hopefully have done better and paid for our kids education and helped them in life.

Worth noting that in 25 years I'll likely be dead ...I'd rather leave my kids some oil shares than a share of a bungalow.

 

 

Edit to add:if our rental yield was circa 8-10% then I'd look at buying.The maths changes around that level.

2 hours ago, DoINeedOne said:

last few posts reminded me of this posted it before somewhere here

IMG_5942.thumb.jpg.5b78bb1fdd81cd26a1ad249a1a9cdbc9.jpgIMG_5943.thumb.jpg.023a6e8fa1e297c09434dc54bf6fcaca.jpg

 

But i still want to buy at some point somewhere out of London, Somewhere i can extend, Somewhere i can have a little workshop but at these prices i sometimes think about going abroad again just to get a little more for my money

Ntohing wrong with buying but I'm keen to know we'll be there long term.

Some of those rental yields are eye watering.98% of people can't do basic maths.

although worth noting,I've been wrong on UK hosue prices for the best part of twenty years.

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9 hours ago, Frank Hovis said:

There is a lot of that idiocy about!

When I was renting people with whom I worked used to politely assume that I was relatively poor, this despite knowing I was on a good kick and had an excellent work history, purely because I was renting.  They couldn't conceive why anyone would rent and not buy.

Then owing to a change in circumstances which made owning more suitable I used a lump of the cash I had saved by renting to buy outright.

This represented a mindflip for them as the person they had felt slightly sorry for because they were renting and "therefore" could not afford to buy had now just achieved their ultimate dream of paying off their mortgage in one go.

I still hear that slightly pitying tone when they find out that someone is "still" renting in their thirties or forties but maybe I've now put a bit of a question into it.

We get those pitying looks too.Mrs P works for a big US Multinational.Just had a round of lay offs and some people who thought they were there till the sun sets have been kicked off the merry go round during afternnon tea.

Despite having moved countries with their families over the years ,slaved away etc etc.We sit around our dinner table for our evening chat and I jsut remind her how fortunate we are to live a humble-ish life that we are very happy with.She loses her job tomorrow,we could live off portfolio and my job and our kids wouldn't notice.

I look at some people with eye watering mortagegs,cars on lease(Mrs P gets a £500 pcm car allowance but we  bought hers for cash),credit cards ,no savings etc etc and I jsut wonder how they sleep at night.Most jsut aren't aware of how quickly IR's can rise or how quickly companies lay off. @DurhamBorn has some amazing stories from his recent lay off at his factory and how little spare capacity some people have.

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2 minutes ago, sancho panza said:

We get those pitying looks too.Mrs P works for a big US Multinational.Just had a round of lay offs and some people who thought they were there till the sun sets have been kicked off the merry go round during afternnon tea.

Despite having moved countries with their families over the years ,slaved away etc etc.We sit around our dinner table for our evening chat and I jsut remind her how fortunate we are to live a humble-ish life that we are very happy with.She loses her job tomorrow,we could live off portfolio and my job and our kids wouldn't notice.

I look at some people with eye watering mortagegs,cars on lease(Mrs P gets a £500 pcm car allowance but we  bought hers for cash),credit cards ,no savings etc etc and I jsut wonder how they sleep at night.Most jsut aren't aware of how quickly IR's can rise or how quickly companies lay off. @DurhamBorn has some amazing stories from his recent lay off at his factory and how little spare capacity some people have.

Indeed and iv never known people as exposed as they are now.Its not just the financial/debt thats a problem its the complete lack of skills in living well but frugal if needed.I had the 2nd oldest car in the car park last job,out of what 600 cars+.I was working with 22 year olds with £30k cars on lease.£350 a month + a couple of k initial.People who worked there for 4 years from 18 to 22 years old taking home £2200 a month minimum living at home with mam and dad and saved zero in the 4 years.They could of bought a half decent terrace house for cash after that 4 years.Then laid off.Still the massive lease payments though.Crazy.No doubt complain about "boomers" in a few years for not having a house or decent job.People over 40 who had always had good jobs getting laid off who had zero savings and no hope of earning near the salary,probably ever again.

Iv got friends who do the two holidays a year thing that costs them amazing amounts when you add in all the clothes etc the wife/partner buys before they go who quite regular mention how we never go away,get some money spent etc.They dont see the fact that me and my partner have amazing amounts of free time due to that sort of life.They dont see the amount of time we have to do things,days up the dale,the coast,a Tuesday to Durham on the park and ride,sitting by the river,a chinese buffet,a movie at home and a drink,no alarm in the morning.

They dont see the fact i can look after my grandkids now,so my kids dont need to pay for childcare and so they are instead whacking off the mortgage and will all be mortgage free by 33 years old on nice houses.Thats without any big cash handouts from me.They will then drop part time themselves if needed,and my daughters would pack in all together if i needed care and do it (nurses).Of course at that point they would go self employed and id pay them £12.5k a year for care,so moving assets to them as well.My dad is the same.If he needs care (we have him a great cleaner £25 a week so far) he woudld come here and my partner would pack in work (another nurse) and look after him and he would simply divert his income to her protecting his capital.

Everyone should live their lives as they want of course,and nothing to do with me,but i think people as a whole are simply not prepared for a more brutal cycle.

 

Each to their own of course,and people should live their lives as they choose,but i think a massive shock is heading down the tracks.

 

 

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2 hours ago, DurhamBorn said:

Indeed and iv never known people as exposed as they are now.Its not just the financial/debt thats a problem its the complete lack of skills in living well but frugal if needed.I had the 2nd oldest car in the car park last job,out of what 600 cars+.I was working with 22 year olds with £30k cars on lease.£350 a month + a couple of k initial.People who worked there for 4 years from 18 to 22 years old taking home £2200 a month minimum living at home with mam and dad and saved zero in the 4 years.They could of bought a half decent terrace house for cash after that 4 years.Then laid off.Still the massive lease payments though.Crazy.No doubt complain about "boomers" in a few years for not having a house or decent job.People over 40 who had always had good jobs getting laid off who had zero savings and no hope of earning near the salary,probably ever again.

Iv got friends who do the two holidays a year thing that costs them amazing amounts when you add in all the clothes etc the wife/partner buys before they go who quite regular mention how we never go away,get some money spent etc.They dont see the fact that me and my partner have amazing amounts of free time due to that sort of life.They dont see the amount of time we have to do things,days up the dale,the coast,a Tuesday to Durham on the park and ride,sitting by the river,a chinese buffet,a movie at home and a drink,no alarm in the morning.

They dont see the fact i can look after my grandkids now,so my kids dont need to pay for childcare and so they are instead whacking off the mortgage and will all be mortgage free by 33 years old on nice houses.Thats without any big cash handouts from me.They will then drop part time themselves if needed,and my daughters would pack in all together if i needed care and do it (nurses).Of course at that point they would go self employed and id pay them £12.5k a year for care,so moving assets to them as well.My dad is the same.If he needs care (we have him a great cleaner £25 a week so far) he woudld come here and my partner would pack in work (another nurse) and look after him and he would simply divert his income to her protecting his capital.

Everyone should live their lives as they want of course,and nothing to do with me,but i think people as a whole are simply not prepared for a more brutal cycle.

 

Each to their own of course,and people should live their lives as they choose,but i think a massive shock is heading down the tracks.

 

 

I see quite a stark future for a lot of people when the intergenerational lessons get taught and we get the sort of Kondratiev winter we should have had in 08.It's now beendelayed, and will no doubt be more severe and prolonged as result of the CB actions post 08.

The job losses that shocked at Mrs p's place were senior guys,50+.I have afriend who's CFO of a decent size Swiss business who tells me that the former execs who are 50+ havea  really difficult time getting re employed.Some young bucks see them as a threat,the older bukcs want some youth.

Which is all fine if you've deleveraged your life but if you haven't it's a brutal reality check to walk out one friday as the one of the most senior people on site and then come back on the Monday as a visitor.

She was saying that some of the redundancies have had a shock wave effect on even some of the younger up and coming stars.Literally decisions were made in the US and heads rolled over here.Obviously,we've seen this before but (Mrs P 12 years younger than me) a lot of people have never seena recession in their industry.(aside from fiancials and property 2008 wasn't really much of a recession)

 

Debate on here has taken an interesting turn over the last few days,bank overdrafts/food inflation/decomplexity- some really thought provoking perpsectives.

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20 hours ago, sancho panza said:

It's amazing really.We're buying oilies,potash miners and PM miners.What would a I rather own £300,000 worth of BP/RDSB/Exxon/ENI/Repsol/Barrick/Newmont or a 3 bed semi in a future warzone  diverse urban paradise like Leicester?

Dividend income on oilies at the minute is circa 5% so £300k begets circa £15k.Our rent is circa £9500 without any maintenance costs, buying/selling costs, neighbour disputes.

Most importantly at the moment with a 2/3/13 year old.We're free to move at the drop of a hat for whatever reason we choose.LL is also free to kick us out admittedly but his risk is inherently larger than mine although he's likely unaware of it-(he's a nice guy,I hope his retirement plan works out for him).

 

I think @Wight Flight is right when he talks about buying over the ten year timeframe.If we were going to stay in one spot then I'd consider buying,but renting here and in South Africa will be our most likely option for the foreseeable.

Also,wortht noting as per WF comment that once you get over the £1000 pcm level up here in the midlands,the value is eye watering. Renting on a 2%yield means aside from the purchase price say £500k, plus interest costs over 25 years of say £250k currently plus probably £30k in maintenance(boilers,alarms,roof,fabric,redecoration etc),buying costs £15k stamp plus £3k fees total bill for 25 years accomodation is

500k+250k+£30k+£18k=£798k

Assumes no rate rises,mortgage 100% repayment,rate 3.5%.

On a 2.5% mortgage repayments would be £2243 pcm total repayment £673k

On a 3.5% would be £2500 pcm ie £751k over 25 years.

https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

 

Using the 3.5% option dividing by 25 years you get the hosue costing £31k per annum as opposed to renting for £12k.

I know we'll get someone saying 'but you'll own the hosue in 25 years' which is true,but the portfolio will hopefully have done better and paid for our kids education and helped them in life.

Worth noting that in 25 years I'll likely be dead ...I'd rather leave my kids some oil shares than a share of a bungalow.

 

 

Edit to add:if our rental yield was circa 8-10% then I'd look at buying.The maths changes around that level.

Ntohing wrong with buying but I'm keen to know we'll be there long term.

Some of those rental yields are eye watering.98% of people can't do basic maths.

although worth noting,I've been wrong on UK hosue prices for the best part of twenty years.

I think this summarizes the whole rent vs buying situation nicely, and why I posted the video clip...there's not a right or wrong answer, just a right or wrong reason...

....take FH for example...could afford to buy but rented whilst a) % was I his favour and b) wanted flexibility...and then came to the life stage (as with DINO) where peace of mind/security had a greater value than simple financial % and so bought, but bought where it had a smaller financial Impact.

I also like WFs point about investment time...just like equities, property goes through cycles so you have to be prepared to invest for the life of the cycle (10 yrs min)...unlike property though, equities seriouslydon't get government support/manipulation!

Finally, SP reasoning is why I also posted the video in that it actually provided the sound evidence for the argument, often missing or superficial when I see the renting vs buying arguments.

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20 hours ago, sancho panza said:

espite having moved countries with their families over the years ,slaved away etc etc.We sit around our dinner table for our evening chat and I jsut remind her how fortunate we are to live a humble-ish life that we are very happy with.She loses her job tomorrow,we could live off portfolio and my job and our kids wouldn't notice.

I look at some people with eye watering mortagegs,cars on lease(Mrs P gets a £500 pcm car allowance but we  bought hers for cash),credit cards ,no savings etc etc and I jsut wonder how they sleep at night.Most jsut aren't aware of how quickly IR's can rise or how quickly companies lay off

I think this is just down to good old fashioned `living within your means`...unfortunately a lot of people have now become indoctrinated by the marketing machine to do the opposite, this to support/maintain mass consumerism.

Without speaking for others on here, the impression that I get is that although we all often have different beliefs one unifying theme is that we are all able to avoid the seduction of marketing.

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21 hours ago, sancho panza said:

It's amazing really.We're buying oilies,potash miners and PM miners.What would a I rather own £300,000 worth of BP/RDSB/Exxon/ENI/Repsol/Barrick/Newmont or a 3 bed semi in a future warzone  diverse urban paradise like Leicester?

Dividend income on oilies at the minute is circa 5% so £300k begets circa £15k.Our rent is circa £9500 without any maintenance costs, buying/selling costs, neighbour disputes.

I would say that highlights the key difference between every one on here and the general public that we are well aware of the range of investments available.

For the great majority of people money is received from job and then pension and that money is either spent, saved as cash, or used to buy a house.

If the only alternative to buying a house is having hundreds of thousands of pounds in cash deposits earning 2% below the rate of inflation then you buy a house as at least it means that you are not guaranteed to lose money.

I didn't go into at the time but when I bought I think people assumed that was my situation: I had a big cash pile and I was spending some of it.

I work in finance and nobody I know even holds shares bar those they may have received from a building society flotation.  They really don't understand investments and therefore don't do them.

I think they see them as I see crypto currencies which I don't fully understand so won't touch.

That's not a value judgement on crypto; merely noting that I don't understand them and therefore wouldn't be able to differentiate between a buying opportunity and a sell signal.

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3 hours ago, Frank Hovis said:

you buy a house as at least it means that you are not guaranteed to lose money.

But you can lose a serious amount of money by buying a house.  Anyone who had to sell in 2008 when prices were plunging or who has bought in a neighbourhood which has gone downhill etc etc can live to regret buying instead of renting.

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Just now, janch said:

But you can lose a serious amount of money by buying a house.  Anyone who had to sell in 2008 when prices were plunging or who has bought in a neighbourhood which has gone downhill etc etc can live to regret buying instead of renting.

Yes.

You misunderstand though.

I wasn't saying that you couldn't lose money on a house because of course you can.

What I was saying was that with 2% inflation and 1% interest you are guaranteed to lose money (in real terms) on a cash deposit which makes it an unattractive investment.

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Unfortunately most people don't want to talk about the finer maths of renting vs owning, because they're either just not terribly bright, or they have an ego investment in HPI because they own a house; my brother for example just managed to buy a house by the skin of his teeth a couple years back after years of looking and saving hard and already he and my parents talk about HPI all the time, he's really happy when he sees how houses in his area have continued to raise in price.....this is a dude with advanced a level maths and an engineering degree yet he doesn't see that HPI doesn't actually benefit him (beyond an ego boost and possible bragging rights), because he'll always need a house and it means the next rung up will probably be more expensive.

As I've said before I'm kind of spoiled with my rent setup.... no need to own a car, no council tax, no heating bill, no commute costs, 10 min walk to work, no maintenance costs...for £500 a month.

So my rent as well as giving me somewhere to live, also removes several costs from my life that I would have as an owner on top of the mortgage.

Was chatting to a mate last night who lives in a town that's about 45 mins from Belfast and works round the corner from my gaff. No parking where he works so as well as running a car for evenings/weekends he's paying £140 a month just for his bus ticket to get him to work, and spending about an hour and a half on the bus a day.

Of course, I made a big mistake not buying in 2012/2013 when prices bottomed here, but I only realize that loss if I then go and blow a  big amount of money on a house. Who knows what will happen here, but overall I'm very happy where I'm living, when I found this place 10 years ago I couldn't have found anywhere more perfectly suited for me at this price range (this particular shape and size of flat has never come up for sale in the 10 years I've been here), and the neighbors have been great too. From what @Frank Hovis says he may have been in a similar frame of mind when he was my age in that the hassle of adding a commute, and the upkeep/ownership costs of say a £200K house whose monthly costs even if bought outright will add up to maybe 50% of what I'm paying in rent anyway, don't really appeal as a single person who doesn't need to house anyone except myself.

I'd buy somewhere if I 'fell in love' with a house, but I'm not seeing anything that I really like, so I'll just keep my money for now.

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15 minutes ago, JoeDavola said:

Unfortunately most people don't want to talk about the finer maths of renting vs owning, because they're either just not terribly bright, or they have an ego investment in HPI because they own a house; my brother for example just managed to buy a house by the skin of his teeth a couple years back after years of looking and saving hard and already he and my parents talk about HPI all the time, he's really happy when he sees how houses in his area have continued to raise in price.....this is a dude with advanced a level maths and an engineering degree yet he doesn't see that HPI doesn't actually benefit him (beyond an ego boost and possible bragging rights), because he'll always need a house and it means the next rung up will probably be more expensive.

As I've said before I'm kind of spoiled with my rent setup.... no need to own a car, no council tax, no heating bill, no commute costs, 10 min walk to work, no maintenance costs...for £500 a month.

So my rent as well as giving me somewhere to live, also removes several costs from my life that I would have as an owner on top of the mortgage.

Was chatting to a mate last night who lives in a town that's about 45 mins from Belfast and works round the corner from my gaff. No parking where he works so as well as running a car for evenings/weekends he's paying £140 a month just for his bus ticket to get him to work, and spending about an hour and a half on the bus a day.

Of course, I made a big mistake not buying in 2012/2013 when prices bottomed here, but I only realize that loss if I then go and blow a  big amount of money on a house. Who knows what will happen here, but overall I'm very happy where I'm living, when I found this place 10 years ago I couldn't have found anywhere more perfectly suited for me at this price range (this particular shape and size of flat has never come up for sale in the 10 years I've been here), and the neighbors have been great too. From what @Frank Hovis says he may have been in a similar frame of mind when he was my age in that the hassle of adding a commute, and the upkeep/ownership costs of say a £200K house whose monthly costs even if bought outright will add up to maybe 50% of what I'm paying in rent anyway, don't really appeal as a single person who doesn't need to house anyone except myself.

I'd buy somewhere if I 'fell in love' with a house, but I'm not seeing anything that I really like, so I'll just keep my money for now.

Yes I was in a similar position and perfectly happy not wanting to buy anywhere as I saw it (rightly) as hassle and expense.

Why in particular I was comfortable in that position when so many aren't and are instead desperate to buy was that I had no fear of inability to buy through being "priced out" because my investments far exceeded the price of a house and were making a better return than houses' notional value for a few hours' review every couple of months and filling in a tax return.  Plus they paid cash dividends.

You're also piling up the investments and the day you do decide to buy and will be able to say to the Estate Agent "cash buyer" will, I guarantee, be a sweet one.

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On 25/01/2020 at 13:35, Frank Hovis said:

Yes.

You misunderstand though.

I wasn't saying that you couldn't lose money on a house because of course you can.

What I was saying was that with 2% inflation and 1% interest you are guaranteed to lose money (in real terms) on a cash deposit which makes it an unattractive investment.

Well yes and no...my understanding from this forum is that there are regions of the UK still at 2004 prices, that's 15 years of lost opportunity cost that could have meant a gain in S&S...you are right about cash deposits though, although who thought 10 years ago interest rates would still be sub 1% now?!

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sleepwello'nights
On 24/01/2020 at 15:00, sancho panza said:

The job losses that shocked at Mrs p's place were senior guys,50+.I have afriend who's CFO of a decent size Swiss business who tells me that the former execs who are 50+ havea  really difficult time getting re employed.Some young bucks see them as a threat,the older bukcs want some youth.

 

What a sheltered life you've led. I witnessed that in my early 30's. In the frequent booms and busts of the economy jobs were lost just like that. In the reshaping of the economy when the UK was subject to the opening up of the economy to global competition there were many men in their early 50's who were made redundant with little hope of being re-employed in similar positions. 

In addition there were many younger men competing for jobs at their levels in new industries and ageism was rife. Over 40 forget a job you're too old. Yes we boomers had it so easy.

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4 hours ago, sleepwello'nights said:

What a sheltered life you've led. I witnessed that in my early 30's. In the frequent booms and busts of the economy jobs were lost just like that. In the reshaping of the economy when the UK was subject to the opening up of the economy to global competition there were many men in their early 50's who were made redundant with little hope of being re-employed in similar positions. 

In addition there were many younger men competing for jobs at their levels in new industries and ageism was rife. Over 40 forget a job you're too old. Yes we boomers had it so easy.

Yes, this is the only thing that makes me reticent about retiring early...though I no longer enjoy it as much as I did, at the moment I have a secure job that pays reasonably well...in my sector, once I leave I won't be able to get back in, and so if I needed to return to ft employment I would be taking a large wage cut :-(

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4 hours ago, MrXxxx said:

Yes, this is the only thing that makes me reticent about retiring early...though I no longer enjoy it as much as I did, at the moment I have a secure job that pays reasonably well...in my sector, once I leave I won't be able to get back in, and so if I needed to return to ft employment I would be taking a large wage cut :-(

I've done that twice and both times my starting salary was roughly half of my leaving salary.

But work hard and prove yourself and it soon gets back up there.

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4 hours ago, Frank Hovis said:

I've done that twice and both times my starting salary was roughly half of my leaving salary.

But work hard and prove yourself and it soon gets back up there.

Couple of Qs FH; feel free to ignore those you would prefer not to answer:

1. How old were you each time?

2. Why did you retire and why did you return?

3. Financially did you have enough to live on each time and did you have dependents to consider?

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4 hours ago, MrXxxx said:

Couple of Qs FH; feel free to ignore those you would prefer not to answer:

1. How old were you each time?

2. Why did you retire and why did you return?

3. Financially did you have enough to live on each time and did you have dependents to consider?

Enough to live on, though maybe a bit tight the first time tbh, and no dependents.

38/39 and then 45

Retired first time as burnt out from high pay high pressure job but later realised it was that job I wanted to leave rather than all work.

Second time job had become very repetitive so, knowing I didn't need to work, left.

?Eight months later I noticed an intriguing job so applied. It turned out to be awful so I took another which was excellent but now I have decided that working means that I am too limited in what else I can do.

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