Itās not about the last 70 years; itās specifically about the last 10. House prices are affected by a lot of factors at all times, but my point is that the dominant one in recent history has been the prolonged near-zero rates, which has allowed for quite a lot of money to be created. So what happened before that is, largely, irrelevant because there were so many other confounding factors. But run it through your head for a minute. If interest rates are 1% (to the consumer), a person can afford to borrow X. But if interest rates are 5%, then they can afford to borrow a lot less than X. Itās not the only factor, and the pressures from Buy-to-Let loom large here, but I think itās really easy to see just what has happened in recent history with historically low rates. Your 70 year data is irrelevant .
I donāt concede it because I never denied it! Because itās obviously true from the data. But itās assuming that the trend will continue thatās flawed.
Yeah, this discussion is terribly simplistic. If you want both barrels I have plenty more . But it seems quite the job to convince people of the simple truth that housing is not a one-way bet, even if it has been for some time at the end of the 20th century.
I guess it depends on how people are looking at it i suppose. I want my own place, because i want my own place and land. I donāt want to have to get permission to do anything all the time. Its not necessarily a monetary investment, though in the long run there shouldnāt be any huge down turns in valuation of a property. like anything things go up and down. Iām willing to accept the responsibility and everything that comes with that.
I think it also depends on things like where you live, life goals, etc.
Thatās actually a valid reason to differentiate between renting and buying. Section 21 is another good reason.
True, there is a general trend. But our times are, monetarily, rather exceptional. And market timing, at least for a first time buyer, is a significant factor because they are more exposed to a potential negative equity situation.
I am currently starting the save for a house deposit and I canāt recommend the lifetime ISA enough. 25% extra a year! Plus I have a stocks and shares one so hopefully that will earn more interest than if I just left it in a cash isa (I am aware it is riskier)
The issue is there is no evidence at all that the dominant factor has been near-zero rates. It seems flawed to say that a factor that has seemingly never impacted housing prices now is, whereas there are other constants that would unquestionably explain the increase in housing prices. Occamās Razor would suggest youāre over-thinking the situation.
I understand what youāre saying, but youāre failing to take into account that even at low interest rates, young people cannot afford to get onto the housing ladder: https://www.ifs.org.uk/publications/10505 Now, you may say ātherefore theyāll be an excess in homes and prices will dropā. But no, that wonāt happen. Why? Because the opportunity to invest in a second property and rent it is too good to ignore for many: https://www.telegraph.co.uk/news/2017/08/18/one-ten-british-adults-now-second-home-owner/ Even with higher interest rates, remortgaging a house or increasing rent would be used to offset any issues.
And the paper I linked you was used for that Bloomberg articleā¦It actually shows that the housing glut is past itās peak, and beyond that with the average price per foot of the properties being >Ā£1,000 (average is Ā£200), then the properties are hardly indicative of normal housing.
Iām relatively young and am now starting to save away for a house-deposit (using a mix of both a fairly decent interest rate on a current account and the LISA (Stocks&Shares).
For me, I have rented since leaving home for University and the last two years whilst I have been working, and personally for me, buying a house just seems to be the better option. I can see the positives to renting - short commitment/ lack of depreciation or the need to pay for repairs.
But for me the actual tangible āowningā of the house means more, being able to do with the property what you want and at the end of the mortgage actually owning the house that you have built and been paying for, for the last X amount of years. I also feel like in a way renting is only helping someone else make money/ pay off their mortgage for that property so why would you want to do that when you ācouldā own your own.
My ex and I bought a flat just over two years ago.
She broke up with me about 5/6 months ago and weāre splitting it/selling as I canāt afford to buy her portion out. I should come out of it with a fair deposit for my own flatā¦ but I donāt know if Iām going to immediately buy again, too early to start looking now to be honest.
Looking back at it, I think I wish I was still renting purely so I could just kick her out and not have her in my life anymore, but I know Iām obviously skewed by the fact this breakup has gotten pretty toxic and sharing the flat still is a bit of a nightmare when youāre trying to move on.
I donāt think society is really built for the way Iām going down the ladder, youāre always meant to go up. I know I cannot gain from the first time buyer incentives now (no stamp duty, LISA, help to buy etc), but then again, didnāt use any of those to buy beforeā¦
Working since 17 in tech, so fairly well paid relatively to my rent at the time. Split deposit with my ex, but should come out of selling this one with enough for my own place, which would be nice.
Having said that, best tip for me was moving all my money into pots the day I got paid (been doing this for years, way before Monzoās idea of pots) and it worked very well for me to see consistently that money increase on a monthly basis.
Totally agree with you here @moneypenny! If I try to push frugality too far, it makes the whole thing unpleasant and unsustainable. I try to focus on ārelatively affordableā luxuries ā buying groceries for a nice meal, for example, instead of eating a mediocre meal out. I havenāt been very good at cooking for myself recently though! Your meal list is very impressive
This is also a really great idea that Iāll try out in future!
Saving for a house was a major factor of why I took the decision to move back in with my parents 6 months ago. Iām saving 4x as much now as I was previously.
I was lucky, as I found myself in a very fortunate situation where I got a job where I can work from home.
If only more employers offered remote work, then people could afford to move and rent somewhere cheaper instead and help them save a lot more.
Alternative take: I love being a homeowner, and having full say of what I do in and out of the flat. I also love where Iām located, surrounded by greenery and with all of my friends and support network nearby. Renting cost me more every month, and was just putting money into someone elseās pocket. I donāt feel tied-down or locked in debt, but individual perception varies
Honestly, the biggest tip I can give you has nothing to do with cutting spending. Focus on earning more! Start a side hustle, work towards a promotion/pay rise. No one seems to talk about this but itāll help you far more, itāll even help you get a bigger mortgage
If you live in a flat then itās probably leasehold, so you donāt own it, youāve only paid for the right to live in it until the lease expires.
Itās still better than private renting though, because you do end up with a lease that you can sell on, you can decorate to your heartās content, and nobody else has keys and can come into your home anytime they feel like it.
Reading this it appeared to me that landlords are twats, Iām a landlord of 5 houses where I live, I have to say that I always do my very best to ensure that my houses are in tip top condition, donāt get me wrong none of them are penthouse dream houses but for the most part they are great, all my tenant have my private number and can call me 24/7 and I will respond instantly. Iāve been on holiday in the states and had to arrange for a cooker element to be replaced, the part had to be ordered in but she was without her cooker for 2-3 days, if it was my own cooker at home I would have been in exactly the same boat or probably even longer without a cooker.
Anyways as a landlord I do find it a struggle to make any really money out of it, in fact just the other day on this very community I advised a young lad to not bother becoming a landlord as the reward is minimal and the heartache is ongoing, mostly from our friends at legislation central who are always coming up with dumb ass ways of costing us money in the form of some new pointless legislation or cutting our tax allowanxes back, unfortunately they donāt seem to understand that all these cost have got to be paid by someone and ultimately by the end user, I genuinely absorb as many of these cost myself as I have a great bunch of tenants and would rather have that than a constant stream of tenants coming and going, my agents write and tell me its time for the rent increase letters and I say no, leave it as it is which obviously doesnāt please the agents as they work on a commission basis so its only in their interest to whack it up.
So anyway, not all of us are twats, some of us try really hard. I even buy my tenants and their kids xmas presents.
There really is not a right approach to this, some people just like the freedom of not having their anchor set in concrete while others just want to be rooted like a tree.
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. But it seems quite the job to convince people of the simple truth that housing is not a one-way bet, even if it has been for some time at the end of the 20th century.
