House prices down 5%, thats £11,250 to me, whats yours...

[PingDit]

Quick question;

Can someone tell me how people like the Germans - who apparently prefer to rent rather than buy, pay their rent once retired?

 

[Shugster]

Quick question;

Can someone tell me how people like the Germans - who apparently prefer to rent rather than buy, pay their rent once retired?

Simple, they get a REAL pension that they can live off.

So they can afford such luxuries as rent, food and heating!

However, I don't think this will continue for much longer, (although the Germans won't put up with a pitance either), as more of us live longer etc etc....

20 to 30 years from now things won't be so cushy for us fogies, (Which I will be by then).DT_Xtremez_26:

 

[R_Squared]

Quick question;

Can someone tell me how people like the Germans - who apparently prefer to rent rather than buy, pay their rent once retired?

Council house rents are quite affordable on a pension.

Plus you don't have to worry about upkeep, House insurance, ground rents etc.
Just because a house is paid off doesn't mean these things stop.

Plus, your house counts as an asset, one that you will be expected to sell to support yourself as you attempt to downsize. With no pension you may find that the pot of 'cash' you have 'saved' will dwindle rather quickly.

Just think, 25 Years of £750 Per Month (£225'000 without interest £382885.47 with 4%) saved or in a pension scheme will see you fcucking minted as a pensioner. (as long as you don't get done over by one of Maxwell's progeny.)

Quite frankly buying as an investment now, is probably one of the stupidest things you can actually do.

 

[Tashy_Man]

Quite frankly buying as an investment now, is probably one of the stupidest things you can actually do.

Agreed but we just want somewhere to live ! Would rather be putting in £800 per month to a mortgage than £500 rent where we get nothing to show for it.

Crack on................DT_Xtremez_09:

 

[mick-a-nick]

Agree with the comments made - The perceived value is only just that, a perception until you have the cash in the bank.
To get a job, you need a letterbox for the job offer to be put through.
Tashy is right, you need somewhere to live and in the current situation the willingness of the lenders to loan out / mortgage properties is somewhat surpressed. When we bought ours, they were trying to throw money at us, we needed to mortgage £70,000 of the £180,000 as my money was tied up in investments. They tried to persuade us to take £120,000 (66%)in case of other needs. We refused their offer, taking only a mortgage for what we required at the time. Now 3 years on and mortgage free life is better. The site fees and council tax still hurt, (Site Fees £1,600 per annum) plus the council tax (£1,350 per annum) plus electric, gas water etc but we were lucky, bought at the right time.
Still only worth what the next buyer will pay though.

 

[R_Squared]

Agreed but we just want somewhere to live ! Would rather be putting in £800 per month to a mortgage than £500 rent where we get nothing to show for it.

Crack on................DT_Xtremez_09:

What would you be doing with that remaining £300 a month?
Saving that over 25 years would still see you with a lump sum of £90'000 (no interest) or at an APR of 4% you would actually have £153154.19.

(Based on the calculations HERE from the Abbey website)

Hardly nothing is it?

Plus you would have saved all the extra expenses of House Ownership.

The only argument i see for home ownership is when conditions exist (as of up to recently) where demand has massively over-inflated value and if you buy and sell at the right time.

However, the earnings to value ratio can only be stretched so far, as we have seen.
The result of the current financial policies of the Govt and lending institutions remain to be seen, but on past track record I'm not hopeful of a soft landing.

Banks & Govt are notoriously short sighted, their policies are mostly reactive and political, not the best mix.

Banks 'only' consider their shareholders, no one else (Northern rock springs to mind), Govts only think as far ahead as the next election (Northern Rock again), frankly we're in for a rough ride.

 

[busby1971]

What would you be doing with that remaining £300 a month?
Saving that over 25 years would still see you with a lump sum of £90'000 (no interest) or at an APR of 4% you would actually have £153154.19.

(Based on the calculations HERE from the Abbey website)

Hardly nothing is it?

Your mortgage will fluctuate with interest rates but over 25 years will average out somewhere in the middle of past and future rates, however, rents will go up, perhaps not every year but over 25 years you can probably guess that they'd at least double and on and on past 25 years until you move in with the kids or into a home. At the same time house price inflation tends to average out at 7% with no tax to pay in this increase if it's your main residence.

When the kids have left home and you can live somewhere smaller you can sell your home and buy a smaller place, perhaps a little flat, the capital you'll have spare should be considerable and can then help fund your retirement.

There are pros and cons to both situations, it just so happens that most people in the UK buy a house, so it is seen as normal for us and what our economy is geared up for, whilst in Germany and other places on the continent it is the other way around.

Back onto mortgages I was given a provisional offer of 230K by a building society based on my wife and mines salaries, 4 x joint income, tempting as it was I just asked for 113k that I needed, however, with offers around like this you can see how people can get into trouble, I can afford the 800 pound this lower amount costs me each month, and I can still afford it if rates go up quite a bit. I could just about afford 1600 of the higher mortgage, get rid of the sky multiroom and a couple of other luxuries, but if rates moved upwards I'd be in a scary place.

 

[Tashy_Man]

What would you be doing with that remaining £300 a month?

Well for starters the figures i quoted were for staying in MQ's.....I am now out so have to find alternative arrangements whatever (sooner rather than later !!).......the private rent is a bit more but then for 99% of the time they will not allow pets.....we have lots....owning our own home just makes more sense at the moment.

Crack on.....................DT_Xtremez_09: