Destined to rent forever?

[Raistlin]

Had a bit of a depressing time yesterday.

Went into my bank to find out what was the largest mortgage that they would give me.

Apparently the largest mortgage they could give me would enable me to buy a £72k house (and that's assuming I pay the deposit of £4k).

So, I went and looked at estate agent's windows and property papers.

You know what? I shouldn't have wasted my time, I just knew that there wasn't going to be any way that I could find a house for that sort of money.....

Are house prices gonna stay the way they are, or are they gonna get worse/better?

Am I destined to have to rent (and this throw my money away each month) forever?

Anybody else facing / faced similar problems? If you've managed to buy recently (but you're in a similar situation) hw did you get round it?

[paulyoung666]

how about a bit of property shareing where 2 or more ppl buy into the property and each have there own share in it :)

[Raistlin]

Who with though?

I've thought about that but tbh I kinda like having my own space.

Plus, the last time I bought a house with somebody I ended up worse off than I'd started (and in more of a pickle than smicer is ;) ).

[MovedGoalPosts]

The only way is up - in the medium to long term at least - for housing prices. There may be small "corrections" from time to time, as is happening in some areas at the moment, but the threat of negative equity will prevent major price drops. Unless we are to go for a really major house building boom so supply vastly exceeds demand this will not change. Meddling with capital gains tax and the like will probably just drive up market activity and prices, so no real savings will be made.

For a long while now first time buyers have been priced out. They were replaced by the buy to let investor. Initially they made a killing from low investment and high rents, (which drove prices up again) but the market has since reached saturation, it's now high investment for low rent returns. the low rent and imporved choice was the government's aim, not the purchase price increase side effect. Strange how government meddling never quite gets it right. The buy to let investor has dissapeared, thus there are few buyers of the "cheapest" properties at the moment, so the whole market suffers as the chains cannot form.

For the first time buyer now, I suspect the shared equity options using housing associtation or similar schems to part fund a purchase, is the way to go.

[Russ]

Apparently the largest mortgage they could give me would enable me to buy a £72k house (and that's assuming I pay the deposit of £4k).


I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

[zing_deleted]

Wait and see who wins the election all it will take is a recession and house prices will plummet interest rates will rise unemployment will rise and someone dressed in grey will say high unemployment = low inflation,IMO this is inevitable,the cost of high interest means anyone who max's out there mortgage pertential will be in trouble just like what happened under a tory government in the 80's.We are living with relatively low interest rates atm,this will mean the rich will not invest in banks etc they invest elsewhere,this will lead to less cash in the banks circulation and less cash to lend at low interest rates,higher rates then = more cash and so the circle begins again

You could consider an auction buy a fix a upper,the benefit in this is you do it up exactlly how you want it,lay out decor etc

[MovedGoalPosts]

I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

Hmm, the cheapest property I have valued this year in my area, North Surrey, was a 2 bedroom flat, in rather tatty condition, in a tower block £140,00 0.

[Raistlin]

Which neck of the woods would that be?

If I wanted to buy a 2 bedroom terrace, on an ex council estate (with a long history of drugs, violence, rioting, theft, muggings etc) I would need to find about £100k.

And that's the scummiest, trashiest, most least desireable, option for about 20-30 miles.

If I move much further than that commuting to work becomes an issue (or rather, the cost of it) and so I would need to find myself a new job (which is probably going to be more difficult than finding somewhere to live :( ).

[MovedGoalPosts]

You could consider an auction buy a fix a upper,the benefit in this is you do it up exactlly how you want it,lay out decor etc

Yes but to get the mortgage on something like that, you will need to show you have the capital to do it up, and if there are "essential repairs" the mortgage company may well hold a retention. Double whammy :(

Of course whether there is even time with an auction property to get a mortgage arranged is doubtful.

[zing_deleted]

I live on a council estate just like you mentioned :) but its rep is out of date most of the estate is clean of its older problems but it still has its rep and houses go for less than your 72 k or so i believe im just a tenent on a dodgy scummy estate :LOL:

[Raistlin]

You could consider an auction buy a fix a upper,the benefit in this is you do it up exactlly how you want it,lay out decor etc

Considered that, but the way I understand it I would need to have the cash (or at least a firm mortgage offer) available before I went to the auction.

Not sure how I can do that, surely the bank won't give me a mortgage without knowing what house I want to buy?

I was thinking about trying to get a nice cheap reposessed house and doing it up but I can't seem to find out if there are any in the area - which leads me to believe that there probably aren't.

Anyway, I've barely got the time to keep this flat tidy, nevermind doing a house up from scratch - but if that's what it takes.....

[zing_deleted]

Yes but to get the mortgage on something like that, you will need to show you have the capital to do it up, and if there are "essential repairs" the mortgage company may well hold a retention. Double whammy :(

Of course whether there is even time with an auction property to get a mortgage arranged is doubtful.

oh i dunno I watch to much daytime tv

[Russ]

Port Talbot, near Swansea - property down here has always been very reasonable. Nothing wrong with the location either.

[Raistlin]

I live on a council estate just like you mentioned :) but its rep is out of date most of the estate is slean of its older problems but it still has its rep and houses go for less than your 72 k or so i believe im just a tenent on a dodgy scummy estate :LOL:

The difference is that yours has got rid of it's reputation, there were actually riots on this estate a little over 3 years ago (full blown riots, petrol bombs, police dogs, horses, the works) and it hasn't gotten any better since.....

Sorry, I take that back. It has got better. The council spent a fortune doing it up and landscaping it. Now it's just as scummy but the houses are worth more :erm:
__________________

Port Talbot, near Swansea - property down here has always been very reasonable. Nothing wrong with the location either.

Don't suppose you wanna offer me a job down that way then :erm:

:)

[zing_deleted]

this house is just up the road from me so it is possible to get reasonable prices Raistlin where are you??

http://www.propertyfinder.com/2/pf/property/details.do;jsessionid=0DE1807BBA91167F0D172B66AEFB C090?action=ATN_GET_PROPERTY_DETAILS&propertyDetailsKey=5676031&=

[MovedGoalPosts]

Anyway, I've barely got the time to keep this flat tidy, nevermind doing a house up from scratch - but if that's what it takes.....

Any property, unless you pay a premium price for somebody else haveing already done it up, or that is new, will need some work doing. This may just be general maintenance or repair like decoration, or it could be more substantial. The older the property the more frequent the repair need might be. You have to factor the ability to fund such works into your budgets. Yes you might not want to buy a run down, in need of refurbishment place, but to buy somethign with a functional kitchen or bathroom, that is tired and could be replaed in a couple of years (when you amass some funds), can be sensible.

Flats can be good, for those wanting to avoid hassle of repairs, gardening, etc, because the building exterior is maintained by the freeholder / residents association. However you do not have any control over timing. You might get a big service charge bill, or ad-hoc levies. You have to budget for those.

[Raistlin]

this house is just up the road from me so it is possible to get reasonable prices Raistlin where are you??

http://www.propertyfinder.com/2/pf/property/details.do;jsessionid=0DE1807BBA91167F0D172B66AEFB C090?action=ATN_GET_PROPERTY_DETAILS&propertyDetailsKey=5676031&=

That would do me, I'd end up with a 50 mile commute to work every day though ;)

I'm about 50 miles East of you.

[Tezcatlipoca]

Am I destined to have to rent (and this throw my money away each month) forever?

Anybody else facing / faced similar problems?


I think I'm gonna be stuck renting forever, too. No chance of ever affording a place in or around Cambridge.

Heh, one of my friends earns loads more than me (he wisely went into computer science rather than biology), but still could only afford a house in a relatively horrible area of Cambridge (Kings Hedges, near Arbury).


I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!


£72k would buy feck all around here.

Bloody South East - expensive for everything. I think Cambridge is meant to be one of the most pricey places to lvie after London.

[Raistlin]

I think I'm gonna be stuck renting forever, too. No chance of ever affording a place in or around Cambridge.

Heh, one of my friends earns loads more than me (he wisely went into computer science rather than biology), but still could only afford a house in a relatively horrible area of Cambridge (Kings Hedges, near Arbury).

:LOL: King's Hedges, nice ;)

I was looking at renting a place in Cherry Hinton not too long back, decided I didn't fancy trudging up and down the A14 to work every day though ;)

£72k would buy feck all around here.

Bloody South East - expensive for everything. I think Cambridge is meant to be one of the most pricey places to lvie after London.

I'm not to far from you, by the sounds of it we're in the same boat - wanna go halves on a house ;)

[Escapee]

I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

It's a trade off though Russ, you could still only just find a house for £72k in my non-posh part of South Wales. I travel over 100 miles return trip to work out of Wales to get decent wages though, I doubt if I could afford a house in the area I am currently working.

Yes, houses are cheap in many parts of Wales compared to other areas but just look at the wage differences though. I would have to take a 50% cut in wages to find a comparable job within a 15 mile radius of my home in Wales. Why do you think there are so many people from the Bristol area are living in the east Wales valleys, we have two such families in our small street and they commute back to work in Bristol every day.

[Tezcatlipoca]

:LOL: King's Hedges, nice ;)

I was looking at renting a place in Cherry Hinton not too long back, decided I didn't fancy trudging up and down the A14 to work every day though ;)



King's Hedges...agh...the house is nice enough, but the area....remember the story in the papers (think it made the national press as well as the Camb papers) about "The King", some big-time crack dealer? He lived near my mate. And the night-time raid on suspected terrorists or something? Same estate as my mate.

I'd hate to live around there. Still, it's better than Arbury.... :erm:


I'm not to far from you, by the sounds of it we're in the same boat - wanna go halves on a house ;)


LOL, with Cambridge prices, I think I'd need to go quarters...

[Raistlin]

LOL, with Cambridge prices, I think I'd need to go quarters...

Ok, so we need two more people then ;)

Anybody else in?

[ian@huth]

One of the best bets is to look for mortgage repossessions. Not far from here a four year old two bedroom semi went for £59k just before christmas. The other house in the block had sold for £100k 12 months earlier. A similar aged 3 bed semi went last year for £79k when others around wer fetching around £110k. With the second one the couple had just split up not long after their son was killed in an accident and she just wanted to get rid ASAP regardless. There are bargains about if you can find them.

Another possibility is joining a shared equity scheme where you buy part of a property and rent the other part. Have a google for details.

[Escapee]

One of the best bets is to look for mortgage repossessions. Not far from here a four year old two bedroom semi went for £59k just before christmas. The other house in the block had sold for £100k 12 months earlier. A similar aged 3 bed semi went last year for £79k when others around wer fetching around £110k. With the second one the couple had just split up not long after their son was killed in an accident and she just wanted to get rid ASAP regardless. There are bargains about if you can find them.

Another possibility is joining a shared equity scheme where you buy part of a property and rent the other part. Have a google for details.

One of the guys I work with is going to an auction sometime this week, he has his eyes on a repossesed property and the guide price is very attractive.

I remember about 3-4 years ago looking for small business premises, I needed storage facilities for about 6 cars. I looked at a few premises around the £25K range that were suitable, I thought I could buy and treat as a long term investment and rent if I had no further use.

The one property was sold and recently came back on the market for approx £85K, and the other was sold repossesed and sold for about £12K at auction to a solicitor. I am now kicking myself for not taking the chance, it was only job insecurity that made me decide no. :mad:

[Mike]

In my location 10 miles south of Oxford a one bedroom box house would cost about 130K. Problem is people are paying that price so they will stay high. !

Mike

[Ramrod]

There is word that at the next budget, the govt will impose capital gains tax on your main property once you sell it.................. :mad:

[paulyoung666]

I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

You could get a lovely house were me and allie live to, wanna buy ours :cool:

[allieyoung666]

Have you ever thought about doing one of those housing association jobbies?? Were you but so much of the property and then the housing association pays the rest. I think that is the way it works. Or ex council properties. An auction is the best bet, but the only problelm is that you buy blind and you will probally have to buy blind.

[Angua]

Does your local Council do part buy part rent? You have to be on the waiting list for this but in your circumstances it is well worth it. Locally the cheapest property is a bedsit flat for around £100.00 0.:dozey:

[cookie_365]

I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

How much would it cost CityLink to deliver it to this neck of the woods ??? ;)

[Graham]

I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

Not a cave...?! :angel: :Sprint:

[Ramrod]

Not a cave...?! :angel: :Sprint:Don't you mean 'pen'? :D

[allieyoung666]

Don't you mean 'pen'? :D

Hey were we live is very nice thank you, If you southern softies have more money than sense, well go and blow 100k on a shoe box, you are really stupid !!!!!! Our house has 3 bedrooms, a dining room, lounge, a very impressive entrance hall with orginial features and is 105 years old, not like your run of the mill shoe box which would probally fit in our hallway, and we are 10 miles either way from the coast or countryside.

[mdean]

I think you need some better advice. Do not borrow from 'your bank' go to an ifa who has a liberal approach to what he puts on forms. If you can afford the repayments an IFA will get you a loan even at 100%
__________________

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101649966,86816,

this has some great info

[allieyoung666]

We got some very bad advice from an IFA, they managed to sell us the wrong mortgage and we have recently had to change our mortgage. If you want the honest truth, the banks is probally the best bet, as his advice was honest and frank. He told us to go to First active, and they were a great help!

[greencreeper]

Why is renting bad? :confused: I see it as good - lots of benefits, few downsides. Ownership of property harks back to the days of olde, when property equalled status.

[allieyoung666]

you will never own your own house, you can never come home and relax, were as if you are a home owner you can do what the hell you like!

[greencreeper]

you will never own your own house
Well you don't when you buy one - the bank does. By the time you do own your own home, you're actually spending more time at the doctors and in hospital than in the house.

[allieyoung666]

We own ours, I am sad to say, so I am sorry to pee on your bonfire!!

[Raistlin]

Renting is bad because:

1. I have to ask somebody else's permission before I can decorate.
2. I can't have Sky because they won't let me put the dish up.
3. I spend a fortune in rent each month, almost half my income, and I don't have anything permenant to show for it.
4. I can be evicted at a month's notice.
5. I have to abide by stupid rules about what I can and can't do in my own home.
6. Every six months I have to allow a complete stranger into my home so that thay can make sure that I haven't changed the colour of the walls or peed in the sink.
7. Someone who I don't know has a key to my house, they can (if they have reasonable cause to do so) enter the property at any time they wish.
8. It sucks.
9. It really sucks.
10. I can't do anything to improve the property, can't change the heating, can't have a decent shower installed, can't modernise the kitchen.
11. It totally sucks.
12. It doesn't feel permenant, or even stable. I know that this isn't mine, it just doesn't feel like home.

There, now I'm all depressed again. Gonna go and eat something..... Which leads me to.....

13. It's playing hell with my waistline :(

[Stuart]

Apparently the largest mortgage they could give me would enable me to buy a £72k house (and that's assuming I pay the deposit of £4k).


I find it (unintentionally) amusing you find this to be an issue - £72k would buy you a very nice house down this neck of the woods!

And yet, 72k won't even buy you a flat in most of London. A friend of mine bought a tiny house (two up two down, but each floor would fit in one room of my house), in a crap area of London, and still had to pay £170,00 0 for it..

[greencreeper]

We own ours, I am sad to say, so I am sorry to pee on your bonfire!!
How did you manage that? Rich Aunt? Patient altered their will?


Renting is bad because:
1. I have to ask somebody else's permission before I can decorate.

I guess you're not married yet :p:


3. I spend a fortune in rent each month, almost half my income, and I don't have anything permenant to show for it.

Yes - but why do you need something permanent? Why do you feel the need to own property?


4. I can be evicted at a month's notice.

Not true. Two months notice, at least, possibly more depending on the tenancy agreement, and only with very good reasons.


5. I have to abide by stupid rules about what I can and can't do in my own home.

I guess you're not married yet :p: I have rules but they don't really restrict me.


6. Every six months I have to allow a complete stranger into my home so that thay can make sure that I haven't changed the colour of the walls or peed in the sink.

Well I would argue that one - doesn't seem a valid reason for entering the property. Find a decent landlord.


7. Someone who I don't know has a key to my house, they can (if they have reasonable cause to do so) enter the property at any time they wish.

No they can't - it would be illegal. There are only very, very limited circumstances in which your landlord can enter your property without your consent, such as a gas leak.


8. It sucks.
9. It really sucks.

Awwwwww.


10. I can't do anything to improve the property, can't change the heating, can't have a decent shower installed, can't modernise the kitchen.

Well those are things that either come with the house or which your landlord pays for. When buying your own home, you usually don't have the spare funds to pay for improvements, unless the cash came from the mortgage in the first place. Ergo more debt.


12. It doesn't feel permenant, or even stable. I know that this isn't mine, it just doesn't feel like home.

How does it feel permanent and stable when you owe the bank enormous sums of money, which you have to pay off for most of your life? You might not be able to pay - accident or unemployment - and you're back to square -1


There, now I'm all depressed again. Gonna go and eat something..... Which leads me to.....

13. It's playing hell with my waistline :(

Well you need to talk to someone about the comfort eating. Buying property is a bit of an extreme solution, and when you're struggling to make the payments, you'll be heading for cream cake isle at Tescos :)

[Graham]

3. I spend a fortune in rent each month, almost half my income, and I don't have anything permenant to show for it.
Yes - but why do you need something permanent? Why do you feel the need to own property?

One example (my personal case): Three years ago I bought a one bed flat for £57,500 . I've just sold it for £92,000 and bought a three bedroomed house.

In another three years I'm going have done this place up, I'll rent it out and move on again then, in three years or so, sell it off and pay off both (or, at least, a big chunk of both) mortgages (and despite what some doom sayers claim, we're not heading for another '80s style crash), so this property is very much an investment for me.

But for a more general case, the point is that owning your property (even if you're paying for it via a mortgage) means the property is *yours*. You are not beholden to anyone else, you are not there at their sufference, you do not have to answer to anyone if you want to change anything.

It's called independence.

4. I can be evicted at a month's notice.

Not true. Two months notice, at least, possibly more depending on the tenancy agreement, and only with very good reasons.

One month, two months, whatever, it's still not yours to stay in for as long as you want.

And given that most properties are now let on statutory short-hold tenancy agreements, the owner does *not* need *any* reason to ask you to leave, they only need to give the required notice.

The only exception is if they want to get rid of you before the initial tenancy period is up in which case they will need good reason to start eviction proceedings.


6. Every six months I have to allow a complete stranger into my home so that thay can make sure that I haven't changed the colour of the walls or peed in the sink.
Well I would argue that one - doesn't seem a valid reason for entering the property. Find a decent landlord.

If it's in the tenancy agreement (as such a stipulation very often is now) you have no choice and would have no grounds for arguing it.


7. Someone who I don't know has a key to my house, they can (if they have reasonable cause to do so) enter the property at any time they wish.

No they can't - it would be illegal. There are only very, very limited circumstances in which your landlord can enter your property without your consent, such as a gas leak.

As it says "reasonable cause" which a gas leak certainly would be. Other causes would be if your property was eg leaking water into another dwelling or there were grounds for considering you to be in violation of the terms of the lease or tenancy agreement.

This is entirely legal.

10. I can't do anything to improve the property, can't change the heating, can't have a decent shower installed, can't modernise the kitchen.
Well those are things that either come with the house or which your landlord pays for.

*IF* your landlord pays for them.

But if your landlord has decided that oil filled electric radiators are the best way to heat your home (cheaper for him, not for you) or that double glazing or loft insulation isn't worth installing or he thinks the avocado bathroom suite looks fine, there's damn all you can do about it without his permission and if you pay for it, you're *giving* it to him.

When buying your own home, you usually don't have the spare funds to pay for improvements, unless the cash came from the mortgage in the first place. Ergo more debt.

Well (again, personally) I've already spent £7,200 doing up the place I've just bought and there's at least another few hundred quid to go, but so what if there's "more debt"?

I suggest you look at the costs of renting and the costs of a mortgage, it may well turn out that the monthly mortgage payment is *cheaper* than what you would pay in rent.

12. It doesn't feel permenant, or even stable. I know that this isn't mine, it just doesn't feel like home.
How does it feel permanent and stable when you owe the bank enormous sums of money, which you have to pay off for most of your life?

Because as long as you keep paying and aren't a nuisance to the neighbours *NOBODY* can kick you out, not for any reason!!!

That is stability.

You might not be able to pay - accident or unemployment - and you're back to square -1

So get mortgage protection insurance.

But even if you can't pay and have to leave, provided you're not in negative equity (which, again, I mention, isn't going to happen) you can sell *your* property and very likely realise a financial gain on it.

If you leave a rental property you get *nothing*. You have put all that money in but you get no value out.

Owning property is much better than renting. I know, I've done both and I'm certain of which I would prefer any day.

[Raistlin]

^^ What he said ^^ :D

[greencreeper]

One example (my personal case) <snip>
Entirely different - sounds like you're investing in property, just like landlords do, with a view to making money in the long-term.

It's called independence.
Well to me it sounds more like people trying hard (but failing) to justify a desire that they don't understand the origins of.

If it's in the tenancy agreement (as such a stipulation very often is now) you have no choice and would have no grounds for arguing it.
<snip>
If the law says that something cannot be done, then putting it in an agreement and getting you to sign it DOESN'T make it legal. It's still illegal and the agreement is invalid. Basic contract law.

*IF* your landlord pays for them.
There's a strong incentive for the landlord to keep the property in a good state of repair - a run-down property has less value. Also, a property with few "mod cons" will attract a lower rental price and fewer prospective tenants.

Well (again, personally) I've already spent £7,200 doing up the place I've just bought and there's at least another few hundred quid to go, but so what if there's "more debt"?
A cavalier attitude to debt I find worrying.

I suggest you look at the costs of renting and the costs of a mortgage, it may well turn out that the monthly mortgage payment is *cheaper* than what you would pay in rent.

£280 a month rent versus:

Mortgage payments
Life assurance
Buildings insurance
Payment protection
Assorted other payments to various experts in fleecing, such as solicitors

Hmmmm. I can see that buying my home will be really cheap :rolleyes:

Because as long as you keep paying and aren't a nuisance to the neighbours *NOBODY* can kick you out, not for any reason!!!
The bank can withdraw or alter the terms of the mortgage at any time. Then there are structural and environmental problems. Compulsary purchase because someone with more money than you wants the land...

If you leave a rental property you get *nothing*. You have put all that money in but you get no value out.
Why does value have to be material and measurable? Why can't value be benefits such as less stress and hassle, and more flexibility? Interesting values Graham :)

Owning property is much better than renting. I know, I've done both and I'm certain of which I would prefer any day.
We'll have to agree to differ :)

[Escapee]

Well I reckon my recent £30K first time buyer mortgage is far better than renting. I can do as I please, if I come home tonight and decide to knock a couple of walls down its my choice, and my fault if it all falls down. :D

Why would I want to line someone elses pocket, when my monthly mortage payments will remain fairly constant and be peanuts compared to rental costs in the longer term.

[etccarmageddon]

http://observer.guardian.co.uk/business/story/0,6903,1468688,00.html

sit tight, the housing market is at least stagnent and is heading for a possible downward trend in prices as all the stock from last summer starts to compete for buyers.

the number of sales recorded at the land registry is substantially down during the first few months of this year compared to the previous.

something in the region of a third - ie. 3 times as many sales recorded last year - I'll look for the exact figures and let you know!

[allieyoung666]

How did you manage that? Rich Aunt? Patient altered their will?



I guess you're not married yet :p:


Yes - but why do you need something permanent? Why do you feel the need to own property?


Not true. Two months notice, at least, possibly more depending on the tenancy agreement, and only with very good reasons.


I guess you're not married yet :p: I have rules but they don't really restrict me.


Well I would argue that one - doesn't seem a valid reason for entering the property. Find a decent landlord.


No they can't - it would be illegal. There are only very, very limited circumstances in which your landlord can enter your property without your consent, such as a gas leak.


Awwwwww.


Well those are things that either come with the house or which your landlord pays for. When buying your own home, you usually don't have the spare funds to pay for improvements, unless the cash came from the mortgage in the first place. Ergo more debt.


How does it feel permanent and stable when you owe the bank enormous sums of money, which you have to pay off for most of your life? You might not be able to pay - accident or unemployment - and you're back to square -1


Well you need to talk to someone about the comfort eating. Buying property is a bit of an extreme solution, and when you're struggling to make the payments, you'll be heading for cream cake isle at Tescos :)

Erm no greenkeeper, and what you said about altering a patients will is disgusting and against the law. We both work hard and what do you know we both earn a good wage, we bought the house with cash as I had some shares and investments which had done very well. The house was cheap as it needed doing up and since we have done the improvments it has trippled to 80k and we only paid 28k and we do not have any intention of selling it. Thank god I have a father who makes you save and not slurge!

[orangebird]

I can't afford to buy - I earn a half decent wage, but a bedsit where I live will cost upwards of 90K... in a horrible area that I wouldn't l've in if you paid me.

I rent a two bed flat (which I love) and I know that if I tried to buy something similar it would cost way more in mortgage payments than it currently does in rent. So, I'm happy renting a home in an area that I love, rather than buying a hovel on an estate I wouldn't dream of walking through alone in daylight. My ultimate plan is to move abroad anyway and get out of this Rip Off Britain. :)

[Stuart]

How did you manage that? Rich Aunt? Patient altered their will?
<snip>

Erm no greenkeeper, and what you said about altering a patients will is disgusting and against the law. <snip>

Erm, I think you'll find that GC was referring to Patients altering their own wills (which most certainly is legal), not the nursing staff altering a patient's will (which most certainly isn't).

TBH, although I do own my own house, I really have never seen the advantage of it. You could argue it's an investment, but unless you own at least two houses, it's not. People have looked at the massive rises in their own house values recently, and seem to have totally forgotten that other properties have had similar price rises, so, unless you go downmarket (or for a smaller house which may not be possible), you probably won't make any profit out of moving (you still have to live somewhere). For instance, my family moved into my current house around thirty years ago. We paid just over £17,000 (IIRC) for it. It's now worth almost 20 times that. The problem is that the other houses in the area have increased in value by the same amount, so if we were to stay in the same area, we would make no profit (and possibly a slight loss). The only way we could make a slight profit would be to move to areas like Lewisham or Catford (both of which are rough), and even then, we would end up in a smaller house and wouldn't make much (if any) profit.

Not really sure about this argument about rent rises either. Unless you are on a fixed rate mortgage, then the banks can raise payments as well.

Also, you are not really independant. I know that I can do a lot of stuff to my house that a landlord would not allow, but if I want to do any major works (extensions for instance), I would possibly still need planning permission.

Finally, to back up OB's point. I have a friend who is very well paid (she is on a £30,000 basic salary + consultancy fees, so is probably on £40K to 50K). To get a reasonable sized house on her own, she would have had to apply for a mortgage at 6 times her salary. As it happens, she got a mortgage with her then boyfriend at a lower rate. The relationship has since hit the rocks, and neither of them can afford to move out. BTW, no, she is not smicer's ex girlfriend.

If you get a good landlord, renting can be better. Home ownership has the advantage that you are free to do a lot more to the house, however, it's also worth noting that if anything major goes wrong (such as the Central heating needing replacement), you are liable for the cost. A landlord would have to pay for these sort of things (although he may pass the cost on to his tennants).

[bob_builder]

Firstly, I would like to challenge the assertion that renting is throwing money away. I too thought this until I started looking into buying a house recently.

I currently rent a house in Cambridge for £550 pcm. If I were to buy the same house it would currently cost £160,00 0. To get a mortgage on this house would therefore cost £800 pcm in interest before paying any of the purchase price off. So by renting I am currently saving £250 pcm over buying the house.

To take this to its conclusion, if I put aside the value of the mortgage repayments (on top of the £800 pcm) plus the £250 I save, I could actually own the house outright in half the time (12.5 years instead of 25) by continuing to rent than if I got a mortgage today.

Also all this is assuming that house prices continue to rise in line with inflation. If house prices fall at anytime in those 12.5 years to bring them back in line with rental prices (which will happen othewise all the BTLs will go bankrupt) I will be even better off!

The following site lists some very good reasons why it is a bad time to buy a house right now:
http://www.firsttimebuyerhelp.co.uk/

I agree with the bad points about renting but I feel the good points massively outweigh those at this moment in time. I will buy when this is no longer the case.

[ian@huth]

I have moved all over the UK with my career and bought and sold over a dozen houses. Each time we have moved I have taken cash out of the move which at one time meant I was getting more cash from moving than I was earning in salary. Over the years I have calculated that I have taken as much cash out as I have paid in mortgage repayments. That realistically means that I have lived rent and mortgage free for the time between buying my first house and the large four bed house I sold down South a few years back. When we moved here I was able to buy our present 3 bed house for cash so no mortgage or rent. So, from renting our first place to owning a house worth 6 figures at no real cost.

[Angua]

Another thought, if you rent you tend to control your belongings better as the less you have the less you have to move. Also should the worst happen you will get your rent paid, mortgages are not paid until 6 months unemployment.:cool:

[Escapee]

Firstly, I would like to challenge the assertion that renting is throwing money away. I too thought this until I started looking into buying a house recently.

I currently rent a house in Cambridge for £550 pcm. If I were to buy the same house it would currently cost £160,00 0. To get a mortgage on this house would therefore cost £800 pcm in interest before paying any of the purchase price off. So by renting I am currently saving £250 pcm over buying the house.

To take this to its conclusion, if I put aside the value of the mortgage repayments (on top of the £800 pcm) plus the £250 I save, I could actually own the house outright in half the time (12.5 years instead of 25) by continuing to rent than if I got a mortgage today.

Also all this is assuming that house prices continue to rise in line with inflation. If house prices fall at anytime in those 12.5 years to bring them back in line with rental prices (which will happen othewise all the BTLs will go bankrupt) I will be even better off!

The following site lists some very good reasons why it is a bad time to buy a house right now:
http://www.firsttimebuyerhelp.co.uk/

I agree with the bad points about renting but I feel the good points massively outweigh those at this moment in time. I will buy when this is no longer the case.

I consider it throwing money away because I am looking further than the end of my nose, renting a property like mine would cost more per month than my mortgage, you must also consider that maortgage repayments effectively get lower as wages rise over the years as opposed to rent that will never go down only increase.

Wind the clock on 10 years and my mortgage will be a fraction of renting.

[bob_builder]

I have moved all over the UK with my career and bought and sold over a dozen houses. Each time we have moved I have taken cash out of the move which at one time meant I was getting more cash from moving than I was earning in salary. Over the years I have calculated that I have taken as much cash out as I have paid in mortgage repayments. That realistically means that I have lived rent and mortgage free for the time between buying my first house and the large four bed house I sold down South a few years back. When we moved here I was able to buy our present 3 bed house for cash so no mortgage or rent. So, from renting our first place to owning a house worth 6 figures at no real cost.
Well you are lucky!

If you had been buying and selling during the last property crash, you would have not been in the same situation. In fact, you may have found yourself not being able to move for your new job as the house was worth less than the mortgage you had. For every person like you who has gained equity in their house to cancel out their mortgage payments there would be another person who has lost that equity and doubled their mortgage payments.

That is the biggest problem with the housing market, it is a 50:50 gamble. You may win or you may lose!

[orangebird]

I consider it throwing money away because I am looking further than the end of my nose, renting a property like mine would cost more per month than my mortgage,

Good for you. However, to buy a property like the one that I rent, my payments would increase by approx 50%.

you must also consider that maortgage repayments effectively get lower as wages rise over the years as opposed to rent that will never go down only increase.

How do you work that out? Rental rates are affected by house prices. If prices go down, so do rental values.

Wind the clock on 10 years and my mortgage will be a fraction of renting.

I'm really not sure how you work that one out either.

[bob_builder]

I consider it throwing money away because I am looking further than the end of my nose, renting a property like mine would cost more per month than my mortgage, you must also consider that maortgage repayments effectively get lower as wages rise over the years as opposed to rent that will never go down only increase.

Wind the clock on 10 years and my mortgage will be a fraction of renting.
Exactly, it is only throwing money away if the rent is more than the equivalent mortgage interest plus any interest that could be earned on the deposit.

For me that is not the case - so I am better off to rent.
For you it is the other way around - so you are better off to buy.

You have to also remember that any difference between the cost of renting and paying the mortgage interest will be earning interest for you which will more than cover the increase in rental payments.

As I said before, when I find myself in your position, I will buy a house but not before.

[ian@huth]

Well you are lucky!

If you had been buying and selling during the last property crash, you would have not been in the same situation. In fact, you may have found yourself not being able to move for your new job as the house was worth less than the mortgage you had. For every person like you who has gained equity in their house to cancel out their mortgage payments there would be another person who has lost that equity and doubled their mortgage payments.

That is the biggest problem with the housing market, it is a 50:50 gamble. You may win or you may lose!But I was buying and selling through that period. I bought my first house in the early 70s and was paying mortgages when interest rates were frighteningly high. Some houses I sold for more than double what I paid for them, a couple only just managed to make a profit but still did make a profit. It's a question of really doing your homework when buying and selling and using your head not your heart.
__________________

Good for you. However, to buy a property like the one that I rent, my payments would increase by approx 50%.



How do you work that out? Rental rates are affected by house prices. If prices go down, so do rental values.



I'm really not sure how you work that one out either.Historically house prices tend to rise quite significantly with odd short periods when they stagnate or fall but soon continue the upward move. My first house cost £3,950 and would currently be selling for around £150k. My second house cost £9,950 and sold recently for £250k. If you take either of these examples and work out the cost of a 100% mortgage on them it would be peanuts at the side of a present day rental value for them. The point is that with house prices rising long term the mortgage used to buy them stay the same with only a variation in interest paid on the outstanding loan. So over a 25 year period the mortgage repayments will not differ substantially between the first year and the 25th but will represent a much lower percentage of both your income and house value.

[bob_builder]

But I was buying and selling through that period. I bought my first house in the early 70s and was paying mortgages when interest rates were frighteningly high. Some houses I sold for more than double what I paid for them, a couple only just managed to make a profit but still did make a profit. It's a question of really doing your homework when buying and selling and using your head not your heart.
OK, well then you were doubly lucky not to be affected by the two crashes that have occurred since you started!

As you say, people should use their heads and not their hearts in all matters housing. My heart says I would like to own my own home but my head says save yourself money and keep renting until house prices are cheaper. :D

[ian@huth]

OK, well then you were doubly lucky not to be affected by the two crashes that have occurred since you started!

As you say, people should use their heads and not their hearts in all matters housing. My heart says I would like to own my own home but my head says save yourself money and keep renting until house prices are cheaper. :DMy head would still tell me to buy rather than rent even if renting was cheaper, as long as I could afford the mortgage repayments using a fixed interest period. Also making sure that the property is being bought at the right price. The extra cash that buying costs is more than recouped in the final years of your mortgage. If you delay buying you face three problems. The first is that you always believe that the time still isn't right to take the plungs and you never get round to it. The second is that for every year you delay buying prices will probably increase. Lastly you will stll be paying off any mortgage much later in life. It's a great feeling when you are doing your budgeting and see rent = nil, mortgage = nil.

[bob_builder]

April house prices fall for tenth consecutive month -Hometrack

http://www.reuters.co.uk/newsArticle.jhtml?type=businessNews&storyID=714580&section=finance&src=rss/uk/businessNews

LONDON (Reuters) - House prices in England and Wales fell for a tenth consecutive month in April and were lower than a year ago on a glut of unsold properties, a survey showed on Monday.

Research company Hometrack said its measure of average house prices based on agreed sales reported by estate agents fell 0.1 percent in April, and down 1.5 percent on the year, the worst annual performance in the five-year history of the survey.

[SMHarman]

How do you work that out? Rental rates are affected by house prices. If prices go down, so do rental values.
Rental prices are a product of supply and demand, as are house prices, both are correlated as if houses are bought to let then the number available for owner occupation falls (and vice versa), but rental is more closely correlated with supply / demand in the rental sector than house price, in the medium term the mortgage on the let property will detach from the price of the property and as such the rental income as long as the owner covers their mortgage will be based on what the market can bear, not what the property is worth.

[orangebird]

My head would still tell me to buy rather than rent even if renting was cheaper, as long as I could afford the mortgage repayments using a fixed interest period. Also making sure that the property is being bought at the right price. The extra cash that buying costs is more than recouped in the final years of your mortgage. If you delay buying you face three problems. The first is that you always believe that the time still isn't right to take the plungs and you never get round to it. The second is that for every year you delay buying prices will probably increase. Lastly you will stll be paying off any mortgage much later in life. It's a great feeling when you are doing your budgeting and see rent = nil, mortgage = nil.

But, I cannot agree with the prices of some homes these days. I do not and will not accept that the bricks and mortar that make a two bed terrace in my town is worth IRO £200k!! !!!!! GMTV did report last week that the reason the house maket has slowed recently is because sellers are asking too much for their properties.

[ian@huth]

April house prices fall for tenth consecutive month -Hometrack

http://www.reuters.co.uk/newsArticle.jhtml?type=businessNews&storyID=714580&section=finance&src=rss/uk/businessNews

LONDON (Reuters) - House prices in England and Wales fell for a tenth consecutive month in April and were lower than a year ago on a glut of unsold properties, a survey showed on Monday.

Research company Hometrack said its measure of average house prices based on agreed sales reported by estate agents fell 0.1 percent in April, and down 1.5 percent on the year, the worst annual performance in the five-year history of the survey.Buyers round here musn't have read that report then. :) House prices have continued to rise and are selling at the increased prices. You have to remember that each area has its own statistics and houses in some areas continue to rise whilst in other areas they may fall.

The significant word in that Reuters report though is "average". The average price of houses may have fallen but they could all have sold for more than they would have sold a year ago. It doesn't take many high value houses not to sell to bring average prices down.

Take a stupid example of a street with four houses in it. A year ago two of the houses were valued at £500k, the other two £100k. Last year one of the £500k houses sold at its valuation so the average price of houses sold in that street was £500k. This year one of the cheaper houses has sold for £200k. That makes an average sale price for that street, this year of £200k. Result is a massive drop in the average sale price of houses in that street. But is any house selling for less than it would have sold a year ago?

[Graham]

One example (my personal case) <snip>
Entirely different - sounds like you're investing in property, just like landlords do, with a view to making money in the long-term.

Yes, but I'm by no means the only person doing this and I did cite other examples too.

It's called independence.
Well to me it sounds more like people trying hard (but failing) to justify a desire that they don't understand the origins of.

So exactly *what* are its origins then? If you can afford to buy something why shouldn't you do so? I don't rent my TV or video because in the long run, although there are some advantages to renting, I'll eventually have paid more for it than it's worth and it *still* won't belong to me.

If it's in the tenancy agreement (as such a stipulation very often is now) you have no choice and would have no grounds for arguing it.<snip>
If the law says that something cannot be done, then putting it in an agreement and getting you to sign it DOESN'T make it legal. It's still illegal and the agreement is invalid. Basic contract law.

Please can you cite to me where in law it says that this is illegal??

*IF* your landlord pays for them.
There's a strong incentive for the landlord to keep the property in a good state of repair - a run-down property has less value. Also, a property with few "mod cons" will attract a lower rental price and fewer prospective tenants.

There is also an incentive for a landlord to do the bare minimum to keep the property in shape. In my new place I'm putting in double glazing, central heating, getting the walls and loft insulated, possibly going to put in new carpets, get several rooms redecorated etc. All of this *could* have been done by the previous owner (a landlord who let the place out) but which he didn't do.

Well (again, personally) I've already spent £7,200 doing up the place I've just bought and there's at least another few hundred quid to go, but so what if there's "more debt"?
A cavalier attitude to debt I find worrying.

Only because you have absolutely no idea about my personal circumstances, how much I earn, how much I spend and how much I have in savings.

I suggest you look at the costs of renting and the costs of a mortgage, it may well turn out that the monthly mortgage payment is *cheaper* than what you would pay in rent.

£280 a month rent versus:

Mortgage payments
Life assurance
Buildings insurance
Payment protection
Assorted other payments to various experts in fleecing, such as solicitors

Hmmmm. I can see that buying my home will be really cheap :rolleyes:

£280 a month rent for *what* sort of property? Is it just you going to live there or a partner who can share the costs?

Do you have any dependants? If not, life assurance and payment protection would probably be a waste of money.

If you find a decent solicitor you won't get fleeced.

It seems to me now that you're just trying to find objections to buying because you don't want to.

Because as long as you keep paying and aren't a nuisance to the neighbours *NOBODY* can kick you out, not for any reason!!!
The bank can withdraw or alter the terms of the mortgage at any time.

Yes, they can, but how many cases can you think of where that has happened? Any bank that did this without *extremely* good reason would find themselves facing massive adverse publicity.

And the problems of repossessions in the '80s were because people weren't making payments, but now, following the outcry over that, banks are a *lot* more amenable and understanding.

Then there are structural and environmental problems.

Get a decent survey done.

Compulsary purchase because someone with more money than you wants the land...

Again your survey should pick up most of that, but unless you're on the route of a proposed bypass etc, it's really very unlikely.

Once more you seem to be reaching to find any objections you can.

If you leave a rental property you get *nothing*. You have put all that money in but you get no value out.
Why does value have to be material and measurable? Why can't value be benefits such as less stress and hassle, and more flexibility? Interesting values Graham :)

Why *shouldn't* value be material and measurable? And frankly I think that once the purchase is over the "stress and hassle" of owning your own property is much less than being in a rental where there's always that "two months notice" hanging over you.

Owning property is much better than renting. I know, I've done both and I'm certain of which I would prefer any day.
We'll have to agree to differ :)

Fine, just keep paying the rent and hope your landlord doesn't decide that he wants you out of the property in a couple of months.
__________________

you must also consider that maortgage repayments effectively get lower as wages rise over the years as opposed to rent that will never go down only increase.

How do you work that out? Rental rates are affected by house prices. If prices go down, so do rental values.

Down here in Portsmouth they didn't change one jot during the '80s housing price crash.
__________________

Wind the clock on 10 years and my mortgage will be a fraction of renting.

I'm really not sure how you work that one out either.

I have borrowed £72,000 on this property. The only thing that will affect that value is interest.

The property is currently worth £146,50 0, but I anticipate that going up over the next six years.

Let's be conservative and say it only goes up £25,000 in that period (not an unreasonable expectation. I will therefore be able to sell it for £25,000 more than I bought it for yet I will *still* only have a mortgage of £72,000 (less anything I've paid off it), but I have another £25,000 worth of equity.

In the meantime the cost of renting will have increased.

[Escapee]

Good for you. However, to buy a property like the one that I rent, my payments would increase by approx 50%.



How do you work that out? Rental rates are affected by house prices. If prices go down, so do rental values.



I'm really not sure how you work that one out either.

Rental prices may go down as supply and demand dictates, however they are still affected by inflation. If my mortgage is now x amount a month it can only go up with interest increases, rental on the other hand will generally follow the trend of inflation plus a factor for house price booms.

My own circumstances are based on the fact that I am happy with the house, and do not want to move on. If you compared your rent to a person who has had a mortgage for 10 years there would be a massive difference, because they bought a house with a mortgage when the house was probably 500% cheaper. Someone renting a property for 10 years would of seen a massive rent increase in that period.

My parents were paying something silly like forty pounds a month for the mortgage on their previous property, how much would it cost to rent that three bedroom house I wonder. I am in a fortunate position because I got a house for about 20% of its true market value, however I do see the problem where the initial plunge to buy is out of reach for many. Taking the plunge and staying put works out a lot cheaper in the long run though.

[mdean]

We got some very bad advice from an IFA, they managed to sell us the wrong mortgage and we have recently had to change our mortgage. If you want the honest truth, the banks is probally the best bet, as his advice was honest and frank. He told us to go to First active, and they were a great help!

I am sorry you got bad advice - but the thought is still true an ifa will always give you abetter range than one bank or building soc. You need to know what you want of course