Average prices/earnings

[colin1]

even more reason to have money invested in houses than the stock market then

even if you buy a house and lose money on it, it wont be as much of a loss as if you rent forever. thats just dead money. just money into someone elses pocket. with a bit of luck it will be my pocket if i get a few buy to let houses
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colin1 is officially faster than god

[Kickstart]

Hi

YEs, rent is dead money. Sell a house and spend the money and you will get hit for capital gains tax (in style). Remortgage and you are still paying a shed load of interest on the money you have released.

All the best

Keith
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[Itchy]

nah capital gains tax on a house you were living in for a certain period is generally moot and exemptable , but that does mean that if you do sell you don't have to pay CGT but you are now homeless or have to rent.

The situation is different if you have more than one house though.

that said I think I've grown used to renting since its not really that realistic to move about and buy a house each and every place you put your feet down for a few months.

Though in the future when funds allow I'd probably keep a base which I'd rent out or something rather than rent forever.
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[Lawnie]

[Kickstart]

[colin1]

[McJamweasel]

Colin, mortgage interest is a horrendous amount of money, not because of the interest rate but because of the term.

Lets say, a £50k mortage over 25 years at 6.6%(taken from Natwest). That means you are paying back £103,425! Now lets 'remortgage' £10k. You will now pay back £124,110. That £10k just cost you £20,685! Thats a cost of £10,685, plus whatever charges there are for the remortgage. It doesn't sound like such a cheap option to me.

The rise in house prices is no good if you don't own a 2nd home to sell/rent. After all, if your house increases by 50% then so will that bigger house that you want to move into. All it means is that it becomes nigh-on impossible for first time buyers to actually get anything.
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[Kickstart]

As I say, you pay shed loads of interest on it. The difference between getting the money on your mortgage and just getting an unsecured loan is pretty minimal if you hunt round.

All the best

Keith
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[McJamweasel]

[colin1]

[McJamweasel]

[colin1]

as i have already mentioned, you can release the equity in your house

for example i buy a house at £56k
house is now worth £70k after 2 years and amount left to pay is £50k
i consider that the house has made me £14k in those 2 years, so i take out a low rate home-owners loan, or remortgage to release some of that £14k fund

so net worth, I am not in debt, as assets is more than liabilities. obviously if house prices crash, and assetts become less than liabilities then my net worth is that I am in debt.

if I had not bought a house, and had spent 2 years renting, that would be £6k gone, a loan would be high interest and not at home owner rates, and if i borrowed £14k, I would be in debt to £14k as I would not have any assetts to offset the liabilities

so that is why having a house is an investment which you can borrow against

anyone who has got £10k equity in their house, can use that as a deposit on a 2nd house which can be bought with a buy to let mortgage.

some people daisy chain on from this, never selling a house, but getting a growing number of buy to lets. each new purchase gets its deposit from equity in the others
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colin1 is officially faster than god

[McJamweasel]

[Mrs Kickstart]

Hi,

You also need to consider the costs of maintaining a house which over time a fair amount.

Also if you buy at your limit it is easy to get in trouble when the heating goes kaput etc and needs fixing. When renting it is someonelse's problem. So in the this case rent may be better for financial stability.

Buying a house also ties you to a location an can make it difficult to move. Some cases a 50K house may have risen to 70 but not always and by the time you have accounted for all the house buying and selling fees and taxes and profit can soon disappear.

Whilst I am buying I am far from sure it is always the best option.

Regards
C
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[colin1]

[Kickstart]

Err, because when you get towards retirement the chances of getting any kind of equity out of it without selling is pretty slim.

You are right that your kids will probably gain from it.

All the best

Keith
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[Itchy]

well you can join those equity release scams I mean schemes but they are tbh crap you borrow 10K out of equity from them and they'll charge you 50K for it,

though leaving it to children just equals inheritance tax , which is barely avoidable , ie you can't pass it on to children 7 years before you die and still live there and so on and so forth.
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[colin1]

yeah i agree those equity release schemes are probably a rip off, but you can do the same thing by remortgaging or loans.

for example the boss of my ex, remortgaged his house to buy a holiday home in cornwall

sounds like a nice idea to me as when he isnt using it, he can rent it out to holiday makers

but most ppl dont use the equity in their homes
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colin1 is officially faster than god

[Kickstart]

Either way he is still paying the interest on the mortgage, whether it is for his main house or his holiday house.

All the best

Keith
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[plugger147]

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[colin1]

[Itchy]

yeah but prices can't keep going up forever, artificial pushing just makes the downturn all that much bitter,

though there are moves to make more people live alone by the government hence reducing supply even more,

see:

Cohabitating couples rights (ie live with a woman for a couple years and she can take a big chunk of your income for life!)


the recent gold diggers charter

Ie get married even with no children and she can take 50% min - 100% of your assets based purely on expectations and becoming accustomed to a lifestyle , this is not tested heavily yet so it is unknown if it works both ways.
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[syl]

[Itchy]

prices and stuff goes down north but then so do wages.

warehouse work in Cornwall/Devon netted around £6.50/h

round Mancs it goes around NMW
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[Skunkcap Freddie]

buying/signed for waitin on documents on a large 2 bedroom apartment with my brother for 108k, house's around that area , small 3 bedrooms go for up to 140k around here. i live around 10 miles outside belfast, when the seller bought the place they got it for about 95k new, for 6 months of owning it from new they made a reasonable profit

i make 200 quid a week, if your buying a place go halfs with someone . ie me and my bro
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