If there were no mortgages

Strife212 said:
What is the point of renting, paying the same amount except the money is being chucked away.
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and you can't customise your house and have to obey by restrictive rules.
Although still essential for a lot of people. Everyone can rent, not everyone can get or afford a mortgage and the deposit.
 
Bear said:
Depends on where you are in France. In parts of France Brittany and Normandy for instance the French complain like mad that the British are pushing their house prices up by buying up property. Im sure its the same in the southern Spain.
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Our obsession to own property drives us abroad :D.

France is also not the top of the table when it comes to percentage of people renting. Switzerland are a massive 69% renting. Germany has 58%. Spain actually tops the table of home owners (~80%), along with Greece (~72%) and Italy (~68%).
 
taximike said:
the average price will be determined by what the average person can save
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No.

The price will be determined by two things:

1) How much it cost to make, build, materials, land costs and profit

2) How much someone is willing to pay for that property.


If it cost £20k, and you sell it £15k, they're idiots as they're making a loss.

If it cost £20k and other properties are selling for £40k, why would anyone sell it for £25k?
 
Shimmyhill said:
Banks do not make a lot of money from mortgages - they make far more from peoples savings and speculating with money they do not have.
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When we bought our first house we had a friendly bank manager that handled our mortgage and (off the record) he told me that they don't really make a lot of money from mortgages at all.
 
Shimmyhill said:
Property value is high because land value is high and there is and always will be more demand than supply.

People getting into debt is a symptom of the above not the cause of it, i dont think you grasp the basic economics of it - Banks do not make a lot of money from mortgages - they make far more from peoples savings and speculating with money they do not have.
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Property value is high because of land value?! Are you deliberately talking out of your backside?

The simple economics are this: a property is now worth nearly twenty times its value of only 33 years ago. That's nothing to do with land value at all.
 
AcidHell2 said:
and you can't customise your house and have to obey by restrictive rules.
Although still essential for a lot of people. Everyone can rent, not everyone can get or afford a mortgage and the deposit.
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Renting is great. I never have to pay for repairs, nor even for redecorating when the paint/wallpaper dulls. :D
 
Pug said:
No.

The price will be determined by two things:

1) How much it cost to make, build, materials, land costs and profit

2) How much someone is willing to pay for that property.


If it cost £20k, and you sell it £15k, they're idiots as they're making a loss.

If it cost £20k and other properties are selling for £40k, why would anyone sell it for £25k?
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Yes. Value is perceived by how much someone is willing to spend. It is never determined by anything else.

Those builders are willing to spend/invest the "£20k" to build a house, as they have reason to believe the property will sell for a profit.

If you spend £20k building a property, you can put a £20k price tag on it and state that it is that value. If nobody is going to buy it for that price, you've just spunked £20k on building.

Builders don't always get it right, either. Just look at the thread on these forums where someone got a damn nice pad for a complete steal only last week.
 
Dj_Jestar said:
Property value is high because of land value?! Are you deliberately talking out of your backside?

The simple economics are this: a property is now worth nearly twenty times its value of only 33 years ago. That's nothing to do with land value at all.
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err yes it is. what's the population of the UK compared to 33 years ago? bring in the planning restrictions and greenbelt into the equation and it's quite clear why land is now more expensive. we are a small island compared to france or other eurpoean countries where rent is lower.
 
Dj_Jestar said:
Builders don't always get it right, either. Just look at the thread on these forums where someone got a damn nice pad for a complete steal only last week.
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There was a program I was watching on BBC World when I was on holiday showing there were quite a few newly built estates in Ireland that are completely empty because no one is buying them at all. They were built during the boom years as they couldnt build houses fast enough and since the financial crash, they are sitting empty. There was even debate as to whether they should knock them down but I didnt quite understand the point of that and I went out after that anyway.
 
Renting to me is throwing your money down the pan, you normally have to have "inspection" every 6 months to make sure you havn't done any dmg to anything, chances are your not allowed to make many changes to the place. It just seems a complete waste of time.

The fact that to get a morgage they want something like 20 grand is also stupid, do you know how long it will take me to save that kinda money? years and years and thats with going without most luxuarys at all.

I would love to own a house to be fair as im stuck in a crap 1 bed flat for a housing association which really dont give a crap about me or the flat im in, they wont replace anything the front door is screwed the bathroom is crap and falling apart yet they refuse to even do anything about it.

the way the world works i guess.
 
Strife212 said:
Renting is pointless unless you have to, paying the same amount except the money is being chucked away.
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silly statement that isn't always true

if you have a situation where rent = the interest portion of a mortgage

if I paid into savings the extra repayment portion of a mortgage

then by renting all I'm doing is taking a short position on house prices, by buying I'm taking a long position

renting is no more or less chucking money away than paying interest on a mortgage is chucking money away - if interest rates are low the a mortgage would perhaps be preferable, if interest rates increase then perhaps renting might be better. Declining house prices favour renting, rising house prices favour mortgages... If you were to posses a crystal ball and could predict say a 5 year dip in house prices in advance then it might be worth while selling your house, renting for 5 years and buying another house after that period.

In the long term buying is probably best (assuming our population keeps increasing, house prices will generally trend upwards above inflation.) Short term renting is generally better as you've not got fixed costs up front.
 
Dj_Jestar said:
Property value is high because of land value?! Are you deliberately talking out of your backside?

The simple economics are this: a property is now worth nearly twenty times its value of only 33 years ago. That's nothing to do with land value at all.
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As i said - you don't understand it at all.
 
[TW]Fox;16662674 said:
Off the top of my head with no further research at all, France :)

A quick google tells me only 50% of people in Holland, for example, are home owners.

Some interesting research from Warwick Uni here:

http://www.warwick.ac.uk/news/pr/business/82/
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Thanks for that interesting read. Never realized it was so different in other countries. Just makes me realize how ignorant we can be to other cultures.
 
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