Owning a house.

[stewartkev]

No taxes in UK that homeowners pay and renters don't. My maintenance costs will be very low, given all major work on the house has just been completed by me or previous owner in last 3 months. Cost me £8000, house has been reappraised at £150k so it paid for itself.

Going by the previous pessimistic outlook of 0.7% real term growth in house prices (UK since 1973 this is actually 4%), in 25 years my house will be worth £155k (I'll ignore my recent valuation). If you get a real term growth of 7% on your investment (historical stock market average), to get to £155k in 25 years it would require £200 a month. Lets just say my maintenence costs are less than that!

[BradleyT]

[ QUOTE ]
I just bought a 2 bed house in the UK, where the market is WAY overheated, for £130K. True cost over 25 years works out at £215k inc all interest payments, fees, etc.

[/ QUOTE ]

Then how is your payment £600?
£215,000 / 25 years = £716 per month.

[DesertCat]

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No taxes in UK that homeowners pay and renters don't.

[/ QUOTE ]

Typically rent already includes the taxes (it's a landlord expense) but a mortgage doesn't (usually). Is this different in the UK?

[technologic]

ok this thread makes me not want to get an apt anymore... what generally makes it +EV to buy vs. rent? i figured that since interest is tax deductible, a mortgage is a cheap source of capital for the individual to build equity with... are maintenance costs that enormous on average?

[DesertCat]

[ QUOTE ]
a few things.

1) Buying a house gives you many more options then renting. Most people don't rent, they sell. {/quote]

What does this mean?

[quote}

2) Psychological effects of owning your home.



[/ QUOTE ]

Including being on the hook for ever little thing that breaks. Some people regard renting as much less stressful.

[ QUOTE ]

3) Regardless of the change in value, you can always live in your home and it provides you the same value. home is also a safe asset.


[/ QUOTE ]

It hasn't been safe over the last year. And when you rent you don't have to pay a large transaction fee to move.


[ QUOTE ]

4) most people live in the same place for most of their lives. this board is so far from an accurate representation of the average american.

[/ QUOTE ]

If you overpay to own, rather then rent, staying in the house can mean you overpay for a much longer period.

[stewartkev]

[ QUOTE ]
[ QUOTE ]
No taxes in UK that homeowners pay and renters don't.

[/ QUOTE ]

Typically rent already includes the taxes (it's a landlord expense) but a mortgage doesn't (usually). Is this different in the UK?

[/ QUOTE ]

The only "tax" which we would pay is the council tax, which is a local community charge to pay for street lighting, rubbish pickup, local facilities, etc. It's standard for this to be the responsiblity of the occupier not the landlord.

There are a few other UK specific things which help the homebuyer too, such as no capital gains tax on profits from a main residence.

[vilemerchant]

Another advantage of buying is that rents are constantly going up over time due to inflation and supply/demand. What you can rent for that £600 might cost you £1000 in 15 years, but your mortgage will only go up due to interest rate rises.

[technologic]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
No taxes in UK that homeowners pay and renters don't.

[/ QUOTE ]

Typically rent already includes the taxes (it's a landlord expense) but a mortgage doesn't (usually). Is this different in the UK?

[/ QUOTE ]

The only "tax" which we would pay is the council tax, which is a local community charge to pay for street lighting, rubbish pickup, local facilities, etc. It's standard for this to be the responsiblity of the occupier not the landlord.

There are a few other UK specific things which help the homebuyer too, such as no capital gains tax on profits from a main residence.

[/ QUOTE ]

i think there's some $250k limit to exemption from cap gains in US provided you lived there 2 out of past 5 years

[jaydub]

techno,

You might want to slow down a bit on the posting. Your reply here is not even relevant had the question actually concerned the US tax code.

As to your other questions, talk less and read more.

J

[technologic]

[ QUOTE ]
techno,

You might want to slow down a bit on the posting. Your reply here is not even relevant had the question actually concerned the US tax code.

As to your other questions, talk less and read more.

J

[/ QUOTE ]

ouch. noted.