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if you're renting you can save money and gain a return on it rather than ploughing it into the loan principal to build up equity.
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chisel Joined: 19 Sep 08
Interest Only on a mortgage of 180000 at 3.5% is just £525 Did you get the email from Lloyds yesterday about proof of an investment vehicle to accompany interest only mortgages will be required from 15th October? When considering this renting/buying argument don't forget when buying you are handing the bank your cash to speculate with and make profits for themselves. Over the length of a mortgage at long term interest rates you pay almost double for the house. If you rent you can invest any surplus cash above the rent to make a profit for yourself. Like on Betfair where everybody wins. |
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Charlatan
Most renters are not renting through choice. They are renting because they can not afford to buy.... I would be interested to know what percentage of renters would buy if there was finance available. The Halifax figures are odd!! I would like to see what happens with Halifax figures next month. Rollo I did see the C & G e mail yesterday. Lloyds banking group seem to be covering their backside on many issues at present. They are very unhappy to do mortgages beyond age 65 at present, despite the governemnt annoouncing that there will no longer be set retirement dates.. I admit, that I do not like doing mortgages for people past age 65 , but lets fgace it, more and more people are likely to work longer, and will also get a pay rise when the reach STate Retirement age. Renting also has additional costs. Tenenats are asked to pay for all sorts of extras and often have their deposits taken. I would guess that to most renters, it is a means to an end. They ALL want to buy their own property given the chance |
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charlatan:
but on a property of say 100k, putting 15k down, the mortgage repayments over 25 years is about £450/month? To rent a property worth 100k I'd say you're looking at about £450/month anyway. So anything you save renting you can presumably save buying. |
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chisel 07 Oct 10 14:01
Renting also has additional costs. Tenenats are asked to pay for all sorts of extras What are these extras tenants are expected to pay for ?? and often have their deposits taken. Deposits by law have to be protected by one of 3 schemes , these schemes are biased towards the tenant , so your wrong again . They ALL want to buy their own property given the chance ALL ?? yet another ignorant remark , there is a lot of convieniance , flexibility and even freedom being a rent slave as opposed to being a mortgage slave to a bank . |
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Chisel in talking through his arse shock. Every renter wants to buy???? Pull the other one you clown. Why should I buy when with one phone call the landlord will have someoe round to take care of all those odd jobs? And if a big job suddenly needs doing who is going to pay? Yep you guessed it. Buy? Don't make me laugh. Also in many countries in Europe renting is the norm. Do they all also want to buy as well?
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chisel,
All things considered do you think you would be better off financially if the average house was £110k or £160k on Oct 7th 2012? |
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chisel 01 Oct 10 14:36
I can absoluetly assur you all that here on the south coasts , we have had the best few months since the middle of 2008 ^^^^ Yet more hilarity from last week from mortgage guru chisel ...... |
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Sharky
I am afraid my friend you are wrong.. We have jad a stonking few months, with many sellers selling having been on market for a while. It is starting to slow a little as I stated earlier.. I have no reason to lie!! Re Renters deposits.. Sure they are held in a seperate account but that does not mean that monies are not going to be witheld if there are any problems with the property caused by the tenant. Now tenants need to pay for referencing, credit checks, and anything else that teh letting agent asks them t. They also pay rent in advance, in some cases 6 months if they can not prove their income. Additionally they may be asked to move home if teh landlord decides to sell, meaning that they will have the costs of moving, maybe taking time of work, hiring vans etc etc. EEternal.. Are you able to buy , or have you convinced yourself that you wouldnt buy even if you could? I find with renters they get very frustarted about not being able to buy, and then after a few years of not managing to save they convince themselves they are better off renting. Good luck I say, I just hope they are not still renting in 15 years time!! I am not Gloating , I have sympathy with people that have to rent.. But come on , be honest, you would rather own your own home! Finally , of course, Depending oin the value of a property renting could be cheaper than buying. Usually the higher the price the lower the yield. Renting a large executive home may be considerably cheaper that buying it, particularly if you have a deposit of less than 25% |
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chisel 07 Oct 10 15:19
Re Renters deposits.. going to be witheld if there are any problems with the property caused by the tenant. If the tenant causes damage it's only right they pay . Now tenants need to pay for referencing, credit checks, and anything else that teh letting agent asks them t. References , credit checks usually around £150 for the length of the tenancy , letting agent can ask but cannot force any other fees on a tenant , furthermore those taking out a mortgage or re-mortgaging have to pay loan fees of £100's or even a £1,000 plus to their bank just to have the privalage of having a mortgage . They also pay rent in advance, in some cases 6 months Only right you pay in advance , but then you have to pay a mortgage in advance , very few need to pay 6 months in advance. Additionally they may be asked to move home if teh landlord decides to sell, meaning that they will have the costs of moving, maybe taking time of work, hiring vans etc etc. Moving is not a traumatic experiance if you're organised , Luton van with tail lift is about £75 a day , packing a van is a art not that you would understand as i suspect you couldn't pack a box correctly . |
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I'm renting a lower ground floor place at the moment, can't wait to move out because of the damp, it is a real struggle drying clothes - what with cooking and showers it is a constant hassle keeping damp out of the flat. We've got extractor fans on all the time, windows open whenever we can and we've bought loads of those things that absorb dampness, don'nt know what they're called. I hope they don't try and take some of our deposit if they're is dampness on the walls. Though I'll try and just give it a once over before I leave.
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Make a complaint to your landlord now and keep a copy of it { e-mail is acceptable }, even if they do nothing about it you've informed them of the problem , it's a problem with the property that is not of your making so it's his problem .
Where about are you UTI ? |
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chisel
I've told you my personal circumstances before. I sold to rent in early 2008 believing a crash was inevitable. The money is there if I want to buy a house but I am happy renting and using the money saved to pay for the little luxuries in life. |
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I'm in Hove greyshark.
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Ok UTI thought it might be London from something you said before , as your a first time buyer despite the problems in your flat it's a no brainer to carry on renting at least for the short term i'm sure even chisel will agree with that , Brighton , Hove etc. packed out with flats , apartments etc. suspect many would love to off load right now especially all those amateur investers of the last few years.
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but on a property of say 100k, putting 15k down, the mortgage repayments over 25 years is about £450/month? To rent a property worth 100k I'd say you're looking at about £450/month anyway. So anything you save renting you can presumably save buying.
i'm renting a property of more like 200k for £595 a month and if i were buying i'd be putting much more than 15% down. examples vary. |
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Renting also has additional costs. Tenenats are asked to pay for all sorts of extras and often have their deposits taken. I would guess that to most renters, it is a means to an end. They ALL want to buy their own property given the chance
the additional costs are (usually) a move in/identification pulled out of their arse fee, the possibility they rip you off on the deposit and increased likelihood of moving costs. all these are cancelled out by the costs involved in one house purchase or sale, never mind upkeep. |
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a further bonus of renting is that you can up sticks and leave rapidly and you aren't dependent on the whims of government. keep your investments liquid....
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personally i prefer to rent than buy but if financial considerations sufficiently favour buying rather than renting then i would consider it. this appears to be the case in some countries (although possibly because i'm not aware of the pitfalls of buying abroad) but certainly not here.
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and when chisel says most renters are not renting through choice what does he think housing benefit recipients would choose: get your rent paid or pay for your own mortgage?
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UTI,
These are a help with damp problems http://www.amazon.co.uk/Delonghi-148110002-DeLonghi-Compact-Dehumidifier/dp/B000BP81DW/ref=sr_1_1?ie=UTF8&qid=1286476187&sr=8-1 They suck all the moisture out of the air. |
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The chiselers
He is desperate Passed on The 9th richest, bar none The chiselers He is short They are short The Stones are short Mr Grumbly, with a white Ferrari, is short Giving you hard looks In the long long Yeltsin days Get in touch They're skint Relocation due for the chiseler Dry hump, in the hip club Chiseler, chiseler, you're a godamn chiseler Internet The chiselers He is desperate They are desparate One mad, bad, one mad The Arab in Chiselers He is short Pink Floyd are short (Internet) 9th richest country in the world bar none Dry hump, in the hip club Basically Chiselers Chiselers Chiselers Dry hump, in the hip club I try to think like you do Act like you do Try to dress like you do I thought I was you Now you turn around Point your finger at me Say I'm Chilinist You think I'm the pits The chiselers are here And when they appear You know I'll disappear again The chisellers are there And everywhere And now I'll never come here again I think like you do I act like you do I thought I was you I need no persuasion You know what to say The process is clear You are not happy I try to think like you do Dress like you do I thought I was you Chiseler! |
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Chisel is the kind of snake oil salesman who gets fat on the way up and whose office is mysteriously closed when the posse comes hunting for him. He thinks he is smart because he has ridden the wave.
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Cheers for advice all. I still think if a place is on the market for 80k (1 bed flat in Worthing) and I can get it for 70k then that has to be worth it. then I put say 15k down it is only 55k mortgage, I'd pay that in 10 years for perhaps £550/month. It also means that I'd be building up equity in the place very quickly. In 2 years I'd perhaps only owe 46k. Even if the flat went down 10% (unlikely imo as long as I buy at a discount) then I still have 17k of equity in the place, so 2k profit. But I don't think it'll drop that much.
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I rent because a) It's cheaper and b) I have no desire to buy an overpriced piece of poop.
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Eeternaloptimist Joined: 28 Jun 10
Replies: 1157 07 Oct 10 22:38 Chisel is the kind of snake oil salesman who gets fat on the way up and whose office is mysteriously closed when the posse comes hunting for him. He thinks he is smart because he has ridden the wave. Absolutely hilarious!! Once again EEternal can not get involved in a debate without getting personal. It is absolutely pathetic. Early next year we are going to see even more Bank of England intervention to stimulate the econmomy. Interest rates will stay lower for much , much longer than any of you ever imagined. There will be little movement in the value of homes. |
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What's the point in saying the same thing time after time?
The IG mid-point for Halifax Sept 11 is 150.5. That is over 7% lower than today. Why would I buy at todays prices when I can lock in a guaranteed 6% discount by buying in 12 months? And since the Halifax index is relatively much lower than the Nationwide the discount is proberbly 8%+. |
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What is that JML? A spread bet on halifax house price index at sept 2011?
That used to be at about 140 or even 120 a year or so back I think, or was that cantor index? |
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That's correct UTI--Sept 2011.
(there are other monthly options,but none later than Sept 2011) When the crash began, Spreadfair started offering prices on the Halifax Index. The quote for Dec 2012 did reach 120(40% below peak) at one time. |
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The quote for Dec 2012 did reach 120(40% below peak) at one time.
Nearly half way there nationally using the Halifax survey , suspect the rest of the falls will be a mixture of nominal and real . Stone dead here , falls on a daily basis half those that do go sold fall through and come back 'unexpectdly re-available' |
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spreadfair, thats it. I used to follow that closely, but then they stopped trading which was a shame, a reallly good site I thought.
So now they're saying 25% from peak instead of 40% from peak. (admittedly up to 2011 instead of 2012) |
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Interest rates will stay lower for much , much longer than any of you ever imagined.
The longer they refuse to pay interest on my cash, the longer it will be before I can afford somewhere to live. I've just been reading through why they do what they do and it has 100% the opposite impact on my life. I don't really understand how they think giving me less money encourages to spend more. I have less to spend so I spend less. |
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Lori
With respect you are not the norm. The governemnt want you to go out and spend your money. They want you to look for a better return. It could be property, it could be shares , etc. They do want you to spend it . The majority of people have mortgages, and the government wants the banks to start lending money. If people repay capital , it gives the banks more money to lend. Interest rates being this low is saving people hundreds of piunds a month in interest. This money is keeping the economy going, and is helping to pay the bigger tax bills. The margins are enormous at present , and are likely to stay high until there is so much cash floating around that the banks wont know what to do with it!! Unfortunately for savers, rates are staying low for longer and you WILL be paying more tax!! Grey Shark House prices are not going down much further. It is an absolute fantasy if you honestly believe the HPI will go down to 120. Interest rates and cheap credit will keep this boat afloat.. Some good deals out today. Five year Fixed at 3.99% at 75% loan to value with Coventry B.S.. If I had 25% , I would buy and guarantee my payments for 5 years. You can sure pay that mortgage down if you are sensible! |
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Chisel: "The majority of people have mortgages ..."
"Number of UK households with a mortgage: 11 million" "The number of households in the UK grew to 24.9 million in 2006" http://www.epolitix.com/stakeholder-websites/press-releases/press- release-details/newsarticle/key-statistics-for-outstanding-uk-mortgages/// sites/council-of-mortgage-lenders/ http://www.statistics.gov.uk/cci/nugget.asp?id=1866 |
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The governemnt want you to go out and spend your money.
Correct. They want you to look for a better return. It could be property, it could be shares , etc. Really?? I think this is just a consequence of low interest rates. One of the reasons for the Credit Crunch was the fed keeping rates too low in the early part of the last decade. Investing in property, shares is saving not spending! Good effort but you seem a little confused. They do want you to spend it . You're repeating yourself. The majority of people have mortgages, Wrong see previous post. the government wants the banks to start lending money. Correct(ish) If people repay capital , it gives the banks more money to lend. On a macro level you can't both repay and borrow more at the same time. Interest rates being this low is saving people hundreds of piunds a month in interest. Unfortunately for savers, rates are staying low for longer I have combined these two as I think you wanted to put them together The margins are enormous at present , and are likely to stay high until there is so much cash floating around that the banks wont know what to do with it!! Chisel are you predicting massive inflation?? |
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An interesting little scrap between Eeternal Optimist (Is that the Eternal optimist who used to post on here?) and Orioles over on Psychic Mutley's thread on chit chat.
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House prices continued to slide last month with the sharpest three-monthly decline since April 2009, Nationwide said yesterday.
Prices fell by another 0.7 per cent in October – following a stagnant September and drops of 0.9 per cent in August and 0.5 per cent in July – and if the current rate of decline continues annual housing market inflation could end 2010 down by 1 per cent. Even the smoother three-monthly figure showed a 1.5 per cent drop. And the average price is now £164,381, some 1.4 per cent lower than in September 2009 and 3.4 per cent lower than the market peak in June this year. The muted figures from Nationwide follow a report from the British Bankers' Association earlier this week showing mortgage lending growing at its slowest rate for 10 years and purchase approvals at an 18-month low thanks to economic uncertainty and first-time buyers struggling to find mortgages on terms they can afford. "Latest housing market data and surveys have been consistently weak, and the housing market really does not seem to have got much going for it at the moment," Howard Archer, the chief economist at IHS Global Insight, said yesterday. "Critical to the development of house prices over the coming months will be the amount of houses coming on to the market, mortgage availability and how well the economy and jobs hold up as the fiscal squeeze increasingly kicks in." Although the Office of National Statistics this week published third-quarter GDP figures showing growth at 0.8 per cent – twice the level economists were predicting – the housing market is not the only sector showing signs of strain. Yesterday's GfK NOP Consumer Confidence Index for October may record a one-point gain, but the index is still at a woeful minus 19, six points lower than this time last year. Confidence in the health of the economy over the coming 12 months dropped by a point to minus 43. "The small rise in consumer confidence is really only the prelude to what happens next," said Nick Moon, the managing director of GfK NOP Social Research. "Confidence has remained reasonably consistent since June but this could change as the public comprehends the full impact of the Government's cuts." |
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I ahve been stunned by the effectivenes of money printing, other interventions and hype on mitigating the slide into proper deppresion. Stunned into silence.
I did not get it. However now Earnst and Young are saying that it clearly looks like a double dip in house prices. Read my lips. Collapse in house prices means collapse in the economy.Plus a collapse in the british psyche which every 10 years or so completly forgets that hosue prices can go down as well as up. And every 15 years or just cannot believe it wwhen the inevitable and obvious happens. But the stupidest thing of all is that nobody notices that overall on average nobody even gained anything on the up. OK some shrewdies traded out but they are more than counter balanced by millions of young kidds who enslaved themseves to a life of debt on a depreciating asset. |
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Nice stuff melv. I think a lot of younger buyers set their sights too high. Why try and buy a £160k house when you can get a two bedroomed apartment for half that? I'm 23 and don't plan to buy a house anytime soon. I would like an apartment and decent one bedroomed apartments are currently selling for about 65k round here.
This culture of buying with credit surely has to end? It just encourages you to spend what you don't have. I'm currently putting my money into gold and silver and hoping they appreciate (even if it's because of a weakened fiat currency and not because they are getting more value) and there is a large housing correction. |
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When people say things like "this happens every 10-15 years" as if they're old and wisened and bin there and done it, what exactly is their sample size? 2 or 3 previous 10-15 year samples? Is that enough to just blindly say you've got it sussed, you understand economics down to a tee because something happened 2 or 3 times before.
Sounds a tad presumptious to me. |