>>
http://www.moneyweek.com/~/media/MoneyWeek/2009/090309/09-03-11-MM2.ashx?w=450&h=362&as=1
>
> So, prices rising approximately in line with inflation.

No. They've gone up much faster than inflation:

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

> Besides, this is the average rate for *all* properties. I'm sure buying
> new properties gradually gets more expensive. What about the ones that
> are already built?

Historically they've gone up too. You can go onto something like 
nethouseprices.com and check the sale prices of individual houses 
historically. Or just ask someone who bought a house 20 years ago how 
much it is worth today compared to what they paid for it. My mum's house 
is worth 3x what they paid for it, and the one before that my parents 
sold for 7x what they paid for it.

> If you rent something, you must pay rent for the rest of your life. If
> you mortgage something, then (hypothetically) you will eventually *own*
> it, and then you don't have to pay any more money.

Yes, but by your reasoning you would then own a house with a drastically 
lower value than what you have paid for it. On the other hand if you had 
rented you would be able to save the difference between the rent and 
mortgage, the value of which would go up with inflation rather than 
down. At the end you'd have more than if you sold your "old" house. But 
it doesn't work like that - house prices have historically gone up above 
inflation, even old ones.

> Sadly, because I've started so late in life, I will never actually pay
> the whole of the mortgage off. And even if I do, I'll still be renting
> the other 70% of the property. But hey, it's all I could afford.

You forget that your mortgage is calculated on making the same payment 
every month for X years, but your salary will hopefully go up. At some 
point you'll either want to pay more per month (and reduce the term) or 
take out more mortgage.

Post a reply to this message

>> If you're very close to a round deposit amount that will allow a much
>> lower interest rate then it may not be a bad idea, assuming you can find
>> a 0% offer for 6 months or something, by which time you could pay it off.
>
> It's news to me that you can *get* a 0% loan, but anyway...

Well it works out at around 1% as they charge you a fee to transfer your 
balance into the card (I found 2% fee for 2 years interest free, or 1% 
fee for 1 year). It works because they assume a proportion of people 
won't switch at the end of the period (and then get charged their hefty 
standard rate of 20% or whatever on some huge amount). If you can be 
bothered to research and move around your money every time the offer is 
about to end you can get a pretty good deal long term.

Post a reply to this message

On Fri, 12 Apr 2013 08:31:21 +0100, Orchid Win7 v1 wrote:

>>> I bought 30% of a house. I'm going to rent the other 70% of it.
>>
>> If you're going to rent 70% of the place (ie, you're the landlord),
>> then you own it and can change what you like as long as it's to
>> building code and whatever local regulations are.
> 
> No, I'm renting 70% of it *from* somebody else.

So yeah, you probably can't do anything with that 70%, but if you're 
paying for the 30% to own it, then you should be able to make changes, 
but that's something you'll want to ask the seller (or have your 
solicitor ask the seller).

Jim

Post a reply to this message

On Fri, 12 Apr 2013 08:35:51 +0100, Orchid Win7 v1 wrote:

> If you rent something, you must pay rent for the rest of your life. If
> you mortgage something, then (hypothetically) you will eventually *own*
> it, and then you don't have to pay any more money.

If you rent something, you don't pay for it "the rest of your life", you 
pay for it until you move somewhere else.

> Sadly, because I've started so late in life, I will never actually pay
> the whole of the mortgage off. And even if I do, I'll still be renting
> the other 70% of the property. But hey, it's all I could afford.

Very few people end up paying off their mortgage these days unless they 
refinance it at least once or twice - it does happen, but usually the way 
it works is you end up selling/moving at least once (at least in the US) 
and get a new mortgage.

You're not unique in this situation. :)

Jim

Post a reply to this message

>> So, prices rising approximately in line with inflation.
>
> No. They've gone up much faster than inflation:
>
> http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

Looks like it's approximately following the curve to me (if you 
straighten out the oscillations around it). But then, that's not very 
statistically rigorous.

>> Besides, this is the average rate for *all* properties. I'm sure buying
>> new properties gradually gets more expensive. What about the ones that
>> are already built?
>
> Historically they've gone up too. You can go onto something like
> nethouseprices.com and check the sale prices of individual houses
> historically. Or just ask someone who bought a house 20 years ago how
> much it is worth today compared to what they paid for it. My mum's house
> is worth 3x what they paid for it, and the one before that my parents
> sold for 7x what they paid for it.

Yeah, but you can say that about most things just because of inflation. 
There was a time where you could buy an entire house - even a giant 
mansion - for less than £1,000, because that was a huge sum of money 
back then. ;-)

>> If you rent something, you must pay rent for the rest of your life. If
>> you mortgage something, then (hypothetically) you will eventually *own*
>> it, and then you don't have to pay any more money.
>
> Yes, but by your reasoning you would then own a house with a drastically
> lower value than what you have paid for it.

Yes. And?

> On the other hand if you had
> rented you would be able to save the difference between the rent and
> mortgage, the value of which would go up with inflation rather than
> down.

 From what I've seen, renting is drastically more expensive. If I want 
to borrow £100k, that's £600/month. If I want to rent somewhere, prices 
start at £800/month or so.

>> Sadly, because I've started so late in life, I will never actually pay
>> the whole of the mortgage off. And even if I do, I'll still be renting
>> the other 70% of the property. But hey, it's all I could afford.
>
> You forget that your mortgage is calculated on making the same payment
> every month for X years, but your salary will hopefully go up. At some
> point you'll either want to pay more per month (and reduce the term) or
> take out more mortgage.

You forget that for the last 10 years, my salary has remained almost 
totally static. I'm assuming that's going to continue in the future. 
(This based on the fact that I work for a tiny company, and the 
financial director has made it her mission in life to never spend any 
money on anything, ever, no matter how necessary it is...)

Post a reply to this message

On 12/04/2013 09:15 AM, scott wrote:
>> It's news to me that you can *get* a 0% loan, but anyway...
>
> Well it works out at around 1% as they charge you a fee to transfer your
> balance into the card (I found 2% fee for 2 years interest free, or 1%
> fee for 1 year). It works because they assume a proportion of people
> won't switch at the end of the period (and then get charged their hefty
> standard rate of 20% or whatever on some huge amount). If you can be
> bothered to research and move around your money every time the offer is
> about to end you can get a pretty good deal long term.

Apparently this is what my sister did to purchase her house...

Then again, my sister is a professional London accountant, and a damned 
good one. What can I say?

Post a reply to this message

>> No, I'm renting 70% of it *from* somebody else.
>
> So yeah, you probably can't do anything with that 70%, but if you're
> paying for the 30% to own it, then you should be able to make changes,
> but that's something you'll want to ask the seller (or have your
> solicitor ask the seller).

According to the guy I just spoke to, I can basically do whatever I want 
with the property. The company I'm renting from is just a finance 
company; they don't care what I do with the property so long as I don't 
devalue it.

Post a reply to this message

On Fri, 12 Apr 2013 22:59:05 +0100, Orchid Win7 v1 wrote:

>>> No, I'm renting 70% of it *from* somebody else.
>>
>> So yeah, you probably can't do anything with that 70%, but if you're
>> paying for the 30% to own it, then you should be able to make changes,
>> but that's something you'll want to ask the seller (or have your
>> solicitor ask the seller).
> 
> According to the guy I just spoke to, I can basically do whatever I want
> with the property. The company I'm renting from is just a finance
> company; they don't care what I do with the property so long as I don't
> devalue it.

That sounds like a good deal, then. :)

Jim

Post a reply to this message

On Fri, 12 Apr 2013 22:56:33 +0100, Orchid Win7 v1 wrote:

>  From what I've seen, renting is drastically more expensive. If I want
> to borrow £100k, that's £600/month. If I want to rent somewhere, prices
> start at £800/month or so.

Which, if you think about it, makes sense - the landlord is responsible 
for fixing everything, so the rent has to include something to offset the 
costs of repairs and other work to be done on the property.

If you buy, you're responsible for budgeting for things like that, 
because as the property owner, you're responsible for taking care of them.

Jim

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On Fri, 12 Apr 2013 22:57:51 +0100, Orchid Win7 v1 wrote:

> Then again, my sister is a professional London accountant, and a damned
> good one. What can I say?

Ask her for advice? ;)

Jim

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