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Finances / Finanzen » uk.finance » House-Buying Myths
| House-Buying Myths [message #390459] |
Mi, 24 Mai 2006 20:11 |
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Why are people in Britain so obsessed with buying houses? I would like
to expose some of the gravest fallacies behind our house-buying
culture, or house buying religion rather, because when it comes to
buying a house in this country, faith comes before reason.
1=2E Rent is dead money.
How often have I heard this: "paying rent is paying somebody else's
mortgage". Most people who say this forget that interest is dead money
too. In a typical mortgage deal about 60% of what you pay over your
lifetime goes straight to the bank, in the form of interest. Only 40%
contributes to paying for the house. Add to that the cost of
maintenance, insurance and tax, and you may be paying more "dead money"
than it would have cost to rent the place. The Economist estimates that
in central London the cost of renting a flat is cheaper than the sum of
interest+maintenance+insurance if you buy the flat in 2005.
True, in some places where the market hasn't caught up yet, the
opposite may be true, but in the long term both should cost about the
same as long as the market is competitive. Of course, what some people
mean when they say this is that they don't have the discipline to put
money aside and that a mortgage forces them to do that. Fortunately,
there are other ways of forcing yourself to put money aside apart from
a mortgage, for instance pension funds.
2=2E House prices can only go up.
It is unbelievable from how many educated people I've heard such
blatant nonsense. I even met a Maths PhD student once who tried to
convince me of this! People seem to have a short memory. The housing
bubble could crash any moment. It has done so before. It might crash
tomorrow, or it might crash in 30 years. We simply don't know. But this
blind faith in ever increasing house prices is just as foolish as the
faith in the stock markets in the late 90s.
3=2E A house is one of the safest investments there is.
Wrong. A house may be a safer investment than a start-up company, but
it's only moderately safe compared to other options. Buying a house is
ignoring one of the basic rules of prudent investment: spread your
risk. Buying a house is putting all your eggs in one basket. It is far
safer to invest in a combination of several assets, preferably in
different countries: shares, bonds, gold, land, real estate. A house
could loose half its value overnight. All it takes is a flood, an
earthquake, a chemical spill, a factory closure, or unruly neighbours.
If your investment is spread the chances of that happening are much
lower, especially if you make sure you retain ownership of the shares
in your funds.
4=2E A house is more lucrative than the stock market.
Quite the opposite. People base this statement on their experience of
the last 3 years, but forget that they'll be paying their mortgage over
the next 40 years. Some new houses get build every year, and there are
demographic and geographic shifts, but to a good first approximation,
the number of houses doesn't change, neither does the number of people
who want to live in them. In other words, the housing market is a
zero-sum game. You can't make a profit from a house unless somebody
else makes an equal loss. This suggests that in the long term house
prices should remain constant, on average, if we ignore the occasional
speculation bubble. The stock market on the other hand is not a zero
sum game. If I invest in small company that invents a groundbreaking
new technology, the technology will create real new wealth and the
company might grow by a factor of 1000 in 10 years. A house can never
be more than a house, after 10 or 100 years. Therefore, on average,
high-tech companies should be expected to grow consistently. If you
look at the stock market over the last 50 years, this is indeed what it
has done.
5=2E Having something to call your own gives you a sense of achievement.
True, but you don't own the house, the bank does. I'd rather save up
the money and buy the house when I can afford it. Being weighed down by
a mortgage gives some people sleepless nights.
6=2E A house cannot be taken away from you in times of social unrest or
unstable governments.
You want to bet? When someone points a gun to your head and tells you
to get out of your house, do you really think a piece of A4 paper is
going to stop them? If govenment is no longer capable of protecting
property rights to money, why would it be expected to protect property
rights to houses? If things get so bad that our legal system breaks
down, we're fucked anyway, house or no house.
7=2E If you get your foot on the property ladder early, you'll be able to
trade your way up slowly.
As I've pointed out before, the housing market is a zero-sum game.
People can only "trade up" at the expense of others. This so-called
"property ladder" is in fact a giant pyramid scheme. Some of us will
inevitably lose. Who loses and who wins depends mostly on timing and
luck. How often have I heard "I have an Uncle who has made =A3500,000 by
trading up. I'll do the same". Well, I have an uncle who has made
=A3500,000 through gambling. Does that mean it's a good idea to gamble?
Of course not.
In short, renting is ok if you want flexibility, buying is ok if you
want a long term place to live in and the freedom to paint the dining
room orange. But as an investment a house is a lousy choice.
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| Re: House-Buying Myths [message #390470 ] |
Mi, 24 Mai 2006 23:28 |
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chtfj21 [at] ml1.net wrote:
Damn. I thought you had mis-spelt the subject line, and that this
was going to be about House-Buying Maths.
> 1. Rent is dead money.
>
> How often have I heard this: "paying rent is paying somebody else's
> mortgage". Most people who say this forget that interest is dead money
> too.
Except that it isn't (necessarily), as our Tim explained recently by
pointing out that long term house price inflation and mortgage
interest rates are approximately equal.
> In a typical mortgage deal about 60% of what you pay over your
> lifetime goes straight to the bank, in the form of interest. Only 40%
> contributes to paying for the house.
OK, so suppose instead you save up during your (working) lifetime to
buy a house for your retirement. By the time you retire, the house will
cost (say 5% a year for 40 years) seven times as much as it would have
cost you to buy at the outset. That's a lot of saving you'd have to do.
And you don't get the house until you retire.
Even if interest were dead money, it'd be a price worth paying for
the privilege of getting use of the asset long before you could
afford to buy it outright, and while not having to pay rent while
waiting, which gobbles up much of your budget for saving.
> Add to that the cost of
> maintenance, insurance and tax, and you may be paying more "dead money"
> than it would have cost to rent the place.
But the rent includes maintenance and insurance, and the tax you pay anyway.
> The Economist estimates that
> in central London the cost of renting a flat is cheaper than the sum of
> interest+maintenance+insurance if you buy the flat in 2005.
Who gives a stuff about central London? It only represents a miniscule
fraction of the UK housing market.
> 3. A house is one of the safest investments there is.
>
> Wrong. A house may be a safer investment than a start-up company, but
> it's only moderately safe compared to other options. Buying a house is
> ignoring one of the basic rules of prudent investment: spread your
> risk. Buying a house is putting all your eggs in one basket.
It can be, but doesn't have to be.
> It is far
> safer to invest in a combination of several assets, preferably in
> different countries: shares, bonds, gold, land, real estate.
But a house *is* land and real estate. And there's nothing to stop
you investing in gold, shares, etc *and* a house, so you *would be*
spreading your risk.
> 4. A house is more lucrative than the stock market.
>
> Quite the opposite. People base this statement on their experience of
> the last 3 years, but forget that they'll be paying their mortgage over
> the next 40 years.
Are you American? Most mortgages here in the UK are designed to last
only 25 years, while in fact they tend to last a lot less, since they
get paid off when people sell up, after on average -what- 7 years?
Anyway, I invested about £8k of my meagre savings in buying a non-BTL
flat in 1993, and sold it 11 years later for a gain of about £120k.
Hardly "the last 3 years". There's no way the stock market could have
turned £8k into £120k for me in 11 years. It would have had to sustain
28%pa growth for the whole time.
> Some new houses get build every year,
Get away! I think you'll find most new houses get built only once.
> and there are
> demographic and geographic shifts, but to a good first approximation,
> the number of houses doesn't change, neither does the number of people
> who want to live in them.
Wrong. There is a downward trend in the size of households. More people
want to live on their own before coupling (or indeed after de-coupling),
instead of staying with parents or in shared flats.
> The stock market on the other hand is not a zero
> sum game. If I invest in small company that invents a groundbreaking
> new technology, the technology will create real new wealth and the
> company might grow by a factor of 1000 in 10 years. A house can never
> be more than a house, after 10 or 100 years.
Big deal. One could equally say that technology can never be more than
technology. 100 years ago, cars were special and could only be
afforded by few. Nowadays most cars cost much less than half the annual
income of its buyer.
So while there is still profit to be made in car-making, it's modest.
High-tech comapnies don't stay cutting-edge forever.
> Therefore, on average,
> high-tech companies should be expected to grow consistently.
Nonsense. They fizzle out. Low-tech is what delivers real consistency.
> 5. Having something to call your own gives you a sense of achievement.
>
> True, but you don't own the house, the bank does.
No, it doesn't. You do. The bank only has the right to force you to
sell if you get behind with repayments. They still give you the sale
proceeds (after subtracting what you owe them). And it's much more fun
for them watching some goon kick you out into the street than watching
said goon break your legs. And it's legal. Hey, I wish I were a bank.
> I'd rather save up the money and buy the house when I can afford it.
See above. You may never be able to afford it if its price grows faster
than your savings.
> Being weighed down by
> a mortgage gives some people sleepless nights.
Fair enough. Then let them rent, and suffer a lower disposable
income instead, if it helps them rest easy.
> In short, renting is ok if you want flexibility, buying is ok if you
> want a long term place to live in and the freedom to paint the dining
> room orange.
You need to replace "and" with "or" there. And don't forget that lack of
freedom to paint the dining room orange *is* inflexibility, and renting
does *not* give you *that* flexibility.
OK, I know you meant flexibility to move, but because (as you say) the UK
is (as you put it) "obsessed" with owning, it makes the market more liquid
than it would be if ownership were rare. Therefore there is not much
difference between the flexibilities of owning and renting. Besides, you
can always switch sides.
> But as an investment a house is a lousy choice.
Well, it worked for me.
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| Re: House-Buying Myths [message #390475 ] |
Do, 25 Mai 2006 00:07 |
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>>Even if interest were dead money, it'd be a price worth paying for
>>the privilege of getting use of the asset long before you could
>>afford to buy it outright, and while not having to pay rent while
>>waiting, which gobbles up much of your budget for saving.
in a competitive market, rent=interest repayment+maintenance+insurance
What is left over after rent is no less than what is left over after
the above three (ie. capital repayment)
>> There is a downward trend in the size of households.
That's a one-off. Once everyone's lifestyle has changed, house prices
will stabilise and stay constant. The stock market, on the other hand,
is likely to keep growing indefintely.
>> But a house *is* land and real estate.
Yes, but it's safer to buy lots of small pieces of land in different
places (ie a real estate fund) than one big chunk of land on one place
(a house)
>> One could equally say that technology can never be more than
technology
No. Techology grows. Houses don't.
It it plausible for a high-tech company to yield a 1000% return on
investment in 3 years. For a house that's unthinkable.
>>You may never be able to afford it if its price grows faster
>>than your savings.
You're assuming that a) house prices will keep growing forever b) that
they'll always grow faster than the stock market. That's clearly
impossible.
>> Fair enough. Then let them rent, and suffer a lower disposable
>> income instead, if it helps them rest easy.
Why lower? again, in a competitive market, rent = interest
repayment+maintenance+insurance.
>>Well, it worked for me.
anecdotal evidence.
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| Re: House-Buying Myths [message #390476 ] |
Do, 25 Mai 2006 00:20 |
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>>Anyway, I invested about =A38k of my meagre savings in buying a non-BTL
>>flat in 1993, and sold it 11 years later for a gain of about =A3120k.
>>Hardly "the last 3 years". There's no way the stock market could have
>>turned =A38k into =A3120k for me in 11 years. It would have had to susta=
in
>>28%pa growth for the whole time.
You were lucky to buy your flat at the beginning of a one-off housing
boom. Extrapolating that trend to the next 10 years is pure
speculation. People who buy today could just as easily end up with
negative equity, if they're unlucky. Also, bear in mind that your
earnings were at the expense of people who bought later than you.
Remember: There is no overall creation of wealth in the housing market!
It may have worked for you, but assuming that the same formula works
for everyone who buys a house is simply naive. It's a lottery and
somebody HAS to lose.
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| Re: House-Buying Myths [message #390477 ] |
Do, 25 Mai 2006 00:33 |
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chtfj21 [at] ml1.net wrote:
>>>Even if interest were dead money, it'd be a price worth paying for
>>>the privilege of getting use of the asset long before you could
>>>afford to buy it outright, and while not having to pay rent while
>>>waiting, which gobbles up much of your budget for saving.
>
> in a competitive market, rent=interest repayment+maintenance+insurance
No. A market, no matter how competitive, needs to be viable.
Rent must allow for an element of profit for the landlord, which
is well in excess of what he could get by investing his stake in
the stock market instead.
>>> There is a downward trend in the size of households.
>
> That's a one-off. Once everyone's lifestyle has changed, house prices
> will stabilise and stay constant.
On the contrary, lifestyle trends may well reverse, but by then the
market balance will have changed in favour of bijou singles residencettes
and then there will suddenly be a surfeit of them and a shortage of
bigger places.
> The stock market, on the other hand,
> is likely to keep growing indefintely.
Hahaha. HaahahAAAAH!
>>> But a house *is* land and real estate.
>
> Yes, but it's safer to buy lots of small pieces of land in different
> places (ie a real estate fund) than one big chunk of land on one place
> (a house)
That's as may be, but when you buy a house to live in it's not *only*
a pure investment but also a lifestyle decision.
>>> One could equally say that technology can never be more than
> technology
>
> No. Techology grows. Houses don't.
Technology doesn't *only* grow, it also shrinks sometimes.
It's not so different from houses.
> It it plausible for a high-tech company to yield a 1000% return on
> investment in 3 years. For a house that's unthinkable.
No, it's not unthinkable at all, because infinite gearing is available
on housing.
>>>You may never be able to afford it if its price grows faster
>>>than your savings.
>
> You're assuming that a) house prices will keep growing forever b) that
> they'll always grow faster than the stock market. That's clearly
> impossible.
No. I'm only assuming that over a 40-year timescale house price
inflation *may* outstrip investment growth.
>>> Fair enough. Then let them rent, and suffer a lower disposable
>>> income instead, if it helps them rest easy.
>
> Why lower? again, in a competitive market, rent = interest
> repayment+maintenance+insurance.
You don't understand, there is no such thing as "interest repayment".
Do you mean "interest + repayment of capital"? The landlord will want
all his expenses (including interest) covered, *and* an element of
profit on top, prefereably in excess of his capital repayments. If not,
what's in it for him? If nothing, there would be no supply of rented
accommodation, and everyone would *have to* buy.
>>>Well, it worked for me.
>
> anecdotal evidence.
So what? Anecdotal evidence is good evidence, and can only be countered
by credible evidence in favour of a claim that it is atypical. Can you
supply any?
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| Re: House-Buying Myths [message #390479 ] |
Do, 25 Mai 2006 00:58 |
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>You don't understand, there is no such thing as "interest repayment".
>Do you mean "interest + repayment of capital"? The landlord will want
>all his expenses (including interest) covered, *and* an element of
>profit on top, prefereably in excess of his capital repayments. If not,
>what's in it for him? If nothing, there would be no supply of rented
>accommodation, and everyone would *have to* buy.
No, I mean interest excluding repayment of capital.
In a (hypothetical) perfectly competitive market profits are zero. look
up "perfect competition" in wikipedia. That means, income from rent is
exactly equal to costs, which are interest+maintenance+insurance but
not capital repayment.
In a highly competitive market there will be a profit of a few percent
a year of course, but rental costs are likely to be only slightly
higher than buying costs.
So disposable incomes will be more or less the same whether you buy or
rent, depending on how good you are at estimating the cost of buying.
>>Can you supply any?<<
http://www.stockcharts.com/charts/historical/images2/DJIA190 0.gif
In the long term the stock market grows because wealth is being
*created*, not merely *redistributed* like in the housing market.
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| Re: House-Buying Myths [message #390480 ] |
Do, 25 Mai 2006 01:05 |
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In message <je4dg.75103$wl.64213 [at] text.news.blueyonder.co.uk>, Ronald
Raygun <no.spam [at] localhost.localdomain> writes
>Except that it isn't (necessarily), as our Tim explained recently by
>pointing out that long term house price inflation and mortgage
>interest rates are approximately equal.
The snag with that though, as I seem to remember, was his use of 'long
term' and 'approximately'.
--
John Boyle
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| Re: House-Buying Myths [message #390484 ] |
Do, 25 Mai 2006 09:07 |
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chtfj21 [at] ml1.net wrote:
>>> One could equally say that technology can never be more than
> technology
>
> No. Techology grows. Houses don't.
> It it plausible for a high-tech company to yield a 1000% return on
> investment in 3 years. For a house that's unthinkable.
>
It is possible for a lottery ticket to yield 1000000000% return in a few
seconds but that doesn't make it a good investment because, just like a
high risk, high tech company a 100% decrease in value is also possible.
Have you forgotten about the huge crash in technology shares that
happened only a few years ago?
The FTSE techmark 100 index peaked at over 5000 now it is below 1400.
The FTSE 100 is also lower now than it was in 2000.
The other thing is, you can't live in your shares.
Gareth
--
------------------------------------------------------------ -----------
To reply to me directly:
Replace privacy.net with: totalise DOT co DOT uk and replace me with
gareth.harris
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| Re: House-Buying Myths [message #390488 ] |
Do, 25 Mai 2006 11:21 |
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chtfj21 [at] ml1.net wrote:
> The Economist estimates...
This is the same Economist that in 2000 held up Marconi (the old GEC) as
a paragon of how an old-tech company could transform itself into a
leading edge dot.com. Imagine if you had sold your house to invest in
Marconi and other dot.com stocks?
I know some Economist journalists, they are nice chaps and some of what
they say is very good stuff, but they still have to fill 50 pages a week
so a lot isn't. If they knew that much about it all they wouldn't be
working for the Economist.
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| Re: House-Buying Myths [message #390489 ] |
Do, 25 Mai 2006 11:28 |
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chtfj21 [at] ml1.net wrote:
>>>Anyway, I invested about £8k of my meagre savings in buying a non-BTL
>>>flat in 1993, and sold it 11 years later for a gain of about £120k.
>>>Hardly "the last 3 years". There's no way the stock market could have
>>>turned £8k into £120k for me in 11 years. It would have had to sustain
>>>28%pa growth for the whole time.
>
>
> You were lucky to buy your flat at the beginning of a one-off housing
> boom.
There have been repeated housing booms and busts in the UK. That is no
guide to the future but seems to be the nature of the UK housing market.
However the overall trend in the south-east has been upwards with less
affordability. What is interesting, for the chartists anyway, is that
you can feed the figures for house price growth since 1929 into
something like Excel and the underlying rate of inflation - ignoring all
the booms and busts, is above that of wages. Of course with an ageing
indiginous population that may change but the UK seems to be an
attractive place for migration so don't count on it.
My dad wouldn't have been able to buy his first house (Dunbreck road in
London, cost 500 UKP in 1958) if he were starting out today with the job
he had (laboratory assistant at Welcome labs).
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| Re: House-Buying Myths [message #390490 ] |
Do, 25 Mai 2006 12:05 |
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You're missing the point. The expected gain (look up "expected value"
on wikipedia) for the lottery is negative. That's why the lottery is a
bad investment.
The expected gain for a zero sum game is by definition zero. The
housing market is, to a good approximation, a zero sum game.
The expected gain for the stock market is positive, if you invest
prudently.
Some companies shrink, others grow. But on average, companies grow more
than they shrink because of technological progress.
>>Have you forgotten about the huge crash in technology shares that
>>happened only a few years ago?
Which is exactly why it's a good idea to invest in shares right now
rather than in houses. The best time to invest is at a trough. The
worst time is at a peak.
Also, it was speculation bubble on top of a slow growth baseline. The
current housing boom is a speculation bubble on top of a no growth
baseline. No market is immune to specultaion bubbles, so they shoudn't
come into the equation. Have you forgotten the housing crash in 1990?
I'd say in the next 5 years a housing crash is far more likely than a
stock market crash, but that's just me. When it comes to investing, I
believe in "going against the flow".
>>The other thing is, you can't live in your shares.
Again, you're missing the point. Unless the market is temporarily
skewed, renting only costs marginally more than buying (see my previous
post), so this is a non-issue.
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| Re: House-Buying Myths [message #390491 ] |
Do, 25 Mai 2006 12:09 |
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What they said about rental prices in central London is very easy to
verify. It's not like it's a secret what the average flat costs to buy,
maintain and insure and what it costs to rent. I'm sure they've done
the research on that one. Verify it youself if you like. That renting
is now cheaper than buying in some places is a fact.
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| Re: House-Buying Myths [message #390493 ] |
Do, 25 Mai 2006 12:25 |
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chtfj21 [at] ml1.net wrote:
>>You don't understand, there is no such thing as "interest repayment".
>>Do you mean "interest + repayment of capital"? The landlord will want
>>all his expenses (including interest) covered, *and* an element of
>>profit on top, prefereably in excess of his capital repayments. If not,
>>what's in it for him? If nothing, there would be no supply of rented
>>accommodation, and everyone would *have to* buy.
>
> No, I mean interest excluding repayment of capital.
>
> In a (hypothetical) perfectly competitive market profits are zero.
That's all very well, but we're discussing the real world. People don't
go into business with the intention of making zero profit, and if there
were no profit in being a landlord, nobody would want to be one.
> That means, income from rent is
> exactly equal to costs, which are interest+maintenance+insurance but
> not capital repayment.
Interest is profit on the renting of money, isn't it? Since we're
not allowed profit, interest will be zero.
Maintenance? Labour is profit, so that'll be free. Materials are also
free, since they involve processing raw materials which are freely
harvestable, and then enhancing them. But there is no profit allowed in
the enhancement, and therefore the cost of all materials is the zero cost
of going out and collecting them.
Insurance? Zero, because the costs of repairs/rebuilding are zero.
So in your hypothetical world renting and buying would cost the same,
but only because they would both cost zero.
> In a highly competitive market there will be a profit of a few percent
> a year of course, but rental costs are likely to be only slightly
> higher than buying costs.
Yes, but "slightly" is enough to make a difference to disposable incomes.
I didn't say the difference would be huge, did I?
> So disposable incomes will be more or less the same whether you buy or
> rent,
No, there will be small but significant difference *because* the market
will not generally be "perfect".
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| Re: House-Buying Myths [message #390500 ] |
Do, 25 Mai 2006 13:38 |
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The imperfection of the market can work the other way too.
Many people are prepared to rent out their home at a loss becase of a)
high transaction costs of selling b) They've spent effort decorating it
and want to live in it in the future c) emotional connection to a house
d) They think it's safer to keep their wealth locked up in a
loss-making house rather than a profit-making bank account.
In Germany, for example, renting is cheaper than buying. After the
buy-to-let boom (which pushes house prices up and depresses rents) and
increasing interest rates the market could turn out that way in the UK
too.
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| Re: House-Buying Myths [message #390508 ] |
Do, 25 Mai 2006 16:26 |
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<chtfj21 [at] ml1.net> wrote in message
news:1148508423.739278.27680 [at] g10g2000cwb.googlegroups.com...
> >>Even if interest were dead money, it'd be a price worth paying for
> >>the privilege of getting use of the asset long before you could
> >>afford to buy it outright, and while not having to pay rent while
> >>waiting, which gobbles up much of your budget for saving.
>
> in a competitive market, rent=interest repayment+maintenance+insurance
No - because there are other factors. Landlords need to budget for rental voids, bad
tenants and associated loss of rent & legal fees, extra requirements placed on
landlords that aren't on an owner by nanny state - a landlord I know was told he'd
have to wire all the smoke alarms to the mains because he's not allowed to trust his
tenants to change the battery! Also I've heard of a "property licence" coming out
that landlords must obtain. Also the extra cost of a BTL mortgage over and above the
cost of a normal mortgage.
All this would make rents considerably higher than owner occupier costs even in a
perfectly competitive market.
--
Andy
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| Re: House-Buying Myths [message #390509 ] |
Do, 25 Mai 2006 16:35 |
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<chtfj21 [at] ml1.net> wrote in message
news:1148551521.940728.296070 [at] i40g2000cwc.googlegroups.com...
> You're missing the point. The expected gain (look up "expected value"
> on wikipedia) for the lottery is negative. That's why the lottery is a
> bad investment.
>
> The expected gain for a zero sum game is by definition zero. The
> housing market is, to a good approximation, a zero sum game.
In fact it's negative, because of taxes like stamp duty and means testing of care
homes etc. If house prices stayed stationary for the next 50 years, overall people
would be better off. Although the government would probably have to find something
else to tax.
--
Andy
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| Re: House-Buying Myths [message #390510 ] |
Do, 25 Mai 2006 16:41 |
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"Gareth" <me [at] privacy.net> wrote in message
news:zbmdnYpRo4A7yujZRVnyrg [at] brightview.com...
> chtfj21 [at] ml1.net wrote:
> The FTSE techmark 100 index peaked at over 5000 now it is below 1400.
> The FTSE 100 is also lower now than it was in 2000.
>
> The other thing is, you can't live in your shares.
Indeed, which means you can sell them without having to buy other shares.
If you want to "cash in" your house, you need to either buy another or rent.
--
Andy
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| Re: House-Buying Myths [message #390515 ] |
Do, 25 Mai 2006 19:37 |
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In message <je4dg.75103$wl.64213 [at] text.news.blueyonder.co.uk>, Ronald
Raygun <no.spam [at] localhost.localdomain> writes
>> But as an investment a house is a lousy choice.
>
>Well, it worked for me.
And me! <g>
--
Richard Faulkner
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| Re: House-Buying Myths [message #390518 ] |
Do, 25 Mai 2006 20:37 |
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On 25 May 2006 03:05:22 -0700, chtfj21 [at] ml1.net wrote:
>Have you forgotten the housing crash in 1990?
How much did prices drop ?
>I'd say in the next 5 years a housing crash is far more likely than a
>stock market crash, but that's just me.
Define your definition of crash.
>When it comes to investing, I believe in "going against the flow".
Don't believe that you're the only one.
Daytona
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| Re: House-Buying Myths [message #390519 ] |
Do, 25 Mai 2006 20:39 |
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On Thu, 25 May 2006 15:26:46 +0100, "Andy Pandy"
<spam8times [at] wonderful.spam.invalid> wrote:
>a landlord I know was told he'd
>have to wire all the smoke alarms to the mains because he's not allowed to trust his
>tenants to change the battery!
Unless he was letting a HMO, which entails a whole load of safety and
habitability measures, he was told wrong.
Daytona
(Landlord & tenant)
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| Re: House-Buying Myths [message #390529 ] |
Do, 25 Mai 2006 22:39 |
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Ronald Raygun <no.spam [at] localhost.localdomain> wrote:
> chtfj21 [at] ml1.net wrote:
>[]
> > Some new houses get build every year,
>
> Get away! I think you'll find most new houses get built only once.
Ever been to the Ideal Homes Show? - they seem to build the same four
new houses there every year ;-)
I'll get my coat, Alan
--
99 Ducati 748BP, 95 Ducati 600SS, 81 Guzzi Monza, 74 MV Agusta 350
"Ride to Work, Work to Ride" SI# 7.067 DoD#1930 PGP Key 0xBDED56C5
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| Re: House-Buying Myths [message #390594 ] |
Fr, 26 Mai 2006 20:12 |
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"Daytona" <me [at] privacy.net> wrote in message
news:l6ub72pddertb220s7lbpeh0n7g8s6ajqc [at] 4ax.com...
> On 25 May 2006 03:05:22 -0700, chtfj21 [at] ml1.net wrote:
>
>>Have you forgotten the housing crash in 1990?
>
> How much did prices drop ?
Depends where you were living.
The peak price paid for a flat in my block
was 115K After the crash they we on offer
at 75K. IIRC, It was six years later that I sold
at 105K still not back to the peak (I had bought
ten years earlier at 90K)
No, I know that the national statistics don't show
such a drop in prices, but that is because some
parts of the country are still rising whils others
are dropping, smoothing out the average.
tim
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