So all the houses will be snapped up on 100% mortgages, is this really a solution ? Rent is high, but that's only because mortgages are going up
Lower mortage rates is the answer , but they won't do it
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Mortgage Rate Rises
- Thread starter glenimp617
- Start date
So all the houses will be snapped up on 100% mortgages, is this really a solution ? Rent is high, but that's only because mortgages are going up
Lower mortage rates is the answer , but they won't do it
Not really. When the landlord decides to sell the renter is then competing with the rest of the market, who can probably afford to pay more.
Renters need rent control.
The rest of the market needs more houses but that ain't happening without government intervention.
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Renting is dead money so rates are irrelevant when you are spending 100% on nothing each month.
You are paying to have a roof over your head. It's not dead money.
The equation has changed quite a bit though, a 25 yr 450k mortgage costs about £2750 a month at 5.5%.
I don't doubt it'll help some but probably not much until prices or rates come down significantly.
Said like a true landlord lol.
Caporegime
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A roof that does not belong to you
But why does it have to?
It's just another service you are paying for. Same as a hotel (extreme to make a point) or leasing a car. You're paying to use something. There are a great many things in life you pay to use that you don't own, whether it's that you can't afford it or just don't want to be tied down to such a big purchase.
Best not book that cruise holiday and just go and buy your own cruise liner!
(I accept this post is mostly ridiculous, but i don't see the obsession with rent being dead money. In a lot of cases it's sensible. Especially at the moment with interest rates. Looking around i would hazard a guess i could rent something much cheaper than my mortgage payment, and that's ignoring the fact i have about 35% equity. There'd also be no hassle of maintenance. Something which has been lovely as we're renting here in Spain for 3 months and have all our evenings/weekends free for fun stuff)
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I would say because a house is a different commodity than most other items. Sure renting in the short term while it's expedient is fine, but we're talking about long term renters being shut out of being able to buy when they want to.
What do you do when you retire and still rent?
You will always *need* a house, but you don't *need* a car or a cruise holiday.
As Freakbro says, when you eventually retire your income most likely won't be the same and so you won't be able to afford to rent the house you're in or any rental if the market shifts against you. You'll be looking at social housing if you're lucky.
Yes and no, when a property is tenanted the buyer can only purchase a property with a buy-to-let mortgage. The property needs to be empty for a residential mortgage, which means there could be large void periods if the landlord wants a larger catchment area of buyers.
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Soldato
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Its more expensive (typically) to purchase a home at the start when broken down into monthlies than to rent.
You have of course on top the maintenance side.
Later on around 10 years or so with typical interest rates and inflation that point crosses where as rents assume to go up by inflation, house mortgage costs start to fall due to lower LTV then then somewhat balance out.
Add another 5-10 years and mortgages look like a bargain.
Get to the end of the mortgage period and its absolutely no contest.
There wont be many people who have rented all their life who can afford to retire.
There will be some, but it would require having been super super well paid, and probably very smart to invest a good amount.
There are people who renting suits, those who want to be or may need to be very mobile in where they live. Potentially even global. Typically high fliers really though. So again see comment in regards to being able to save for that house purchase later.
The above is purely looking at the income/expenditure side. If you add in asset value (typical gain) then its 100% everyone should be buying a house.
You have of course on top the maintenance side.
Later on around 10 years or so with typical interest rates and inflation that point crosses where as rents assume to go up by inflation, house mortgage costs start to fall due to lower LTV then then somewhat balance out.
Add another 5-10 years and mortgages look like a bargain.
Get to the end of the mortgage period and its absolutely no contest.
There wont be many people who have rented all their life who can afford to retire.
There will be some, but it would require having been super super well paid, and probably very smart to invest a good amount.
There are people who renting suits, those who want to be or may need to be very mobile in where they live. Potentially even global. Typically high fliers really though. So again see comment in regards to being able to save for that house purchase later.
The above is purely looking at the income/expenditure side. If you add in asset value (typical gain) then its 100% everyone should be buying a house.
I wish I was a landlord.
I just accept that some people choose to rent and are effectively paying for a service. I often wish I didn't have to pay to maintain my house. Would be lovely having all your maintenance covered and the flexibility to move on when it suits.
I don't, far too many negatives IMO.
Having a mortgage has been significantly cheaper than renting.
I'm paying 570 to myself every month on a monthly cost of 900
Maintenance is not that much. Certainly not enough to make owning more expensive than renting. That argument doesn't wash with me.
Renting is dead money. And it isn't like a cruise. You need a home. A cruise is optional.
If you're stuck renting for life, you are probably not going to have a great pension, or a big savings pot.
You're going to either have a sad retirement, sorry, no retirement. Or be a massive burden on the state... Which of those depends on how the future pans out.
My sole reason for owning my own home is that I don't want to be paying rent when I'm 60.as it would mean I'd have to work until I drop.
I'm paying 570 to myself every month on a monthly cost of 900
Maintenance is not that much. Certainly not enough to make owning more expensive than renting. That argument doesn't wash with me.
Renting is dead money. And it isn't like a cruise. You need a home. A cruise is optional.
If you're stuck renting for life, you are probably not going to have a great pension, or a big savings pot.
You're going to either have a sad retirement, sorry, no retirement. Or be a massive burden on the state... Which of those depends on how the future pans out.
My sole reason for owning my own home is that I don't want to be paying rent when I'm 60.as it would mean I'd have to work until I drop.
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I'm sure the landlords would forgo a few months rent in order to get max value. It's a nice thought that renters would have first dibs at a discount rate but the numbers would never add up.
Until supply catches up to demand it's rough times for renter's however you cut it. The last think renters need is landlords exiting the market
Soldato
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I tend to agree but maintenance is not flat line with a house.
Some things are very infrequent such as new boilers, new windows and doors etc
Hell even roofs have a shelf life
You definitely need landlords.
And it looks like the rules on land lords has gone too far as its tipped renting too far to the "demand" side of supply and demand.
As much as renting sucks, I couldn't have moved to Wales without the ability to rent. I didn't want to commit to buying without first living in the area.
Less rentals would have pushed up my costs.
Rental market needs rules. And controls. But personally I'd go after the big portfolio types. And reduce the cost for small portfolio landlords
A system where, in effect, the more houses you own the less benefit (ie increasing tax burden) you get. That encourages people to save for a second house if they can.
These rules could be balanced to meet long term supply and demand.
I also hate that we are building new houses all the time (environmental reasons) but we do need it. As the population comes down over time naturally the house prices will start to fall. But that's a long way off
And it looks like the rules on land lords has gone too far as its tipped renting too far to the "demand" side of supply and demand.
As much as renting sucks, I couldn't have moved to Wales without the ability to rent. I didn't want to commit to buying without first living in the area.
Less rentals would have pushed up my costs.
Rental market needs rules. And controls. But personally I'd go after the big portfolio types. And reduce the cost for small portfolio landlords
A system where, in effect, the more houses you own the less benefit (ie increasing tax burden) you get. That encourages people to save for a second house if they can.
These rules could be balanced to meet long term supply and demand.
I also hate that we are building new houses all the time (environmental reasons) but we do need it. As the population comes down over time naturally the house prices will start to fall. But that's a long way off
Its because you can't trust the government to provide a reasonable end of life care package. If you could, it wouldn't be such a problem.