Wolfman
Tour Rookie
Good point about the possible inheritance but remember if they need care home fees in the future they will be forced to sell the home to fund it !
Are we mugs buying homes or should we rent
- Thread starter Wolfman
- Start date
Sweep
Journeyman Pro
For the first time in decades in this country, the jury is out on this question. In lots of other countries people mainly rent but traditionally their economies operate differently in this regard. Because of the downturn / recession, houses have actually lost money since around 2004 depending where you live and the size of your house. This is the first time we haven't seen a 10 year increase for as long as I know. The recent hype about house price increases should be taken with great caution IMO. As soon as the interest rate goes up, and it most certainly will, lots of people will not be able to afford their mortgage payments and the price will drop again. I raised this in a discussion with a high flying banker last week and he agreed, though he did say the government /banks were trying to ease that problem by creating house price inflation. Hence cheaper mortgages /smaller deposits / government guarantees. Hence the hype.
So, as always the answer is, it depends when you buy. IMO those who are struggling to buy shouldn't be too worried. The days of fast easy profit on houses are a long way from returning. Buy a house if you want to live in it and for security if you want it and as long as you can afford it, you will be OK.
So, as always the answer is, it depends when you buy. IMO those who are struggling to buy shouldn't be too worried. The days of fast easy profit on houses are a long way from returning. Buy a house if you want to live in it and for security if you want it and as long as you can afford it, you will be OK.
One Planer
Global Moderator
I would rather own my own home than rent.
We brought our house back in 2001 as first time buyers. Only a 2 up, 2 down, but it's a Victorian build so the rooms are quite big and have hight ceilings.
The house we brought had been empty for about 5 years and the family just wanted it sold, so I made them a stupidly low offer (..... As a joke), which they accpted, pretty much on the spot.
We've had to invest a lot of time and money getting it modernised but it's more than worth it.
My total house bills (... Mortage, gas, 'leccy' Sky, Insurances, etc) comes to less than what it would cost me to rent the equivilent house. That's before you add your bills.
We realise we're lucky and not everyone could afford to do what we did.
We also brought at the right time, before house prices went silly, and then the subsequent collapse. If we were buying now, we couldn't do what we did in 2001.
We brought our house back in 2001 as first time buyers. Only a 2 up, 2 down, but it's a Victorian build so the rooms are quite big and have hight ceilings.
The house we brought had been empty for about 5 years and the family just wanted it sold, so I made them a stupidly low offer (..... As a joke), which they accpted, pretty much on the spot.
We've had to invest a lot of time and money getting it modernised but it's more than worth it.
My total house bills (... Mortage, gas, 'leccy' Sky, Insurances, etc) comes to less than what it would cost me to rent the equivilent house. That's before you add your bills.
We realise we're lucky and not everyone could afford to do what we did.
We also brought at the right time, before house prices went silly, and then the subsequent collapse. If we were buying now, we couldn't do what we did in 2001.
NWJocko
Tour Winner
Only if you're not smart enough to move ownership of the property into kids names or held in trust well before the event :thup:
Similarly to minimise inheritance tax liabilities the same can be done with all manner of assets.
Only if your assets exceed £325k otherwise it can't be touched and that won't change until 2017 currently.
NWJocko
Tour Winner
There are ways round it as my parents and I have just been through the whole process. I'm no legal expert but if you structure the ownership and "tenancy" correctly then it can be avoided.
Costs a whack to do it of course.
Birchy
Money List Winner
Id rather be put in a box than a government funded care home anyway. My nan was a nutter with money in her time and has just ended up one after having problems and ending up with alzheimers.
Wouldn't take my dog for a walk there.
You would have equally as much to show for a 3 year mortgage paying 21k. It costs money to live in the 1st world, very easy for us to forget this.
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need_my_wedge
Has Now Found His Wedgie
I think I'd rather own, although it feels like renting. I managed to get a rather good deal about 8 years ago of 1/2% above base tracker, so my mortgage has been very low for a while, and looks to maintain that for the next couple of years. The problem being was that I got interest only, so haven't paid any of the base back. Not a problem at the moment, the mortgage does let us lead a comfortable life, not extravagant, but we can do what we want/ need to do for the most part.
The house prices rose, dropped, and seem to be rising again, there's still a chunk of equity in the property over the mortgage value, so when the time comes, will sell up, take the money and rent then. Having said that, I am seriously considering one of these mortgages for life, where the mortgage company pays you the "free" equity in the property, they take ownership and you both live there until death, at which point the house is taken by the mortgage company to dispose of as they see fit. the downside being that there's nothing to leave your kids, but if we sell and rent, there won't be anyways.
The house prices rose, dropped, and seem to be rising again, there's still a chunk of equity in the property over the mortgage value, so when the time comes, will sell up, take the money and rent then. Having said that, I am seriously considering one of these mortgages for life, where the mortgage company pays you the "free" equity in the property, they take ownership and you both live there until death, at which point the house is taken by the mortgage company to dispose of as they see fit. the downside being that there's nothing to leave your kids, but if we sell and rent, there won't be anyways.
Its not complicated, you can make gifts and married couples can pass unlimited amounts of assets between each other tax free. Its all about timing where gifts are concerned though as they can still be taxable within 7yrs of death so if you have over 325k in assets you should be putting the excess in trusts or give it out to family as gifts as early as possible.
40% is a lot to lose on every £1 over £325k if you don't look into it properly.
These are very good if your property will still increase in value over the term or you have no dependants. As such, you can never owe them anything at the end of the term but once the interest is added to the advanced money and the property becomes available (on death), they take charge of the house, sell it and any surplus is paid back to any dependants.
I think its a good way to free up locked capital in your property and still remain in the house with no monthly payments as they pay the house off, I think you have to be over 55 in most cases though.
jimbob.someroo
Journeyman Pro
You would have equally as much to show for a 3 year mortgage paying 21k. It costs money to live in the 1st world, very easy for us to forget this.
True but I'd have the security of it being my own home and could set the mortgage at a more affordable level for me.
It's increasingly hard for non-londoners to move down here for work, especially at the entry level of business. Permanent jobs in my industry are increasingly becoming internships which are either paid very little or not at all. If you get kept on, you then generally end up getting paid not much more for the first few years. As a result, the vast majority of people on my level of the ladder are either Londoners who live at home or non-Londoners who come from a wealthy enough background that family will cover the cost of rent etc.
If rent keeps rising the way it has been doing, it will become almost impossible for people to move down this way. Let alone thinking about buying somewhere (I think average first-time buyer was 37 last year).
If I were to suddenly come into £50k I would like to think that I could put the deposit down on a small flat and set a mortgage that I could manage. Either that, or a two-bed place and rent the other room out at the sort of extortionate rates which people don't seem to bat an eyelid at!
Understood, in many ways though London is almost forcing businesses to move back into the "wilds" of birmingham, manchester etc, not a bad thing in my book.
I dont mind visiting London etc on a regular basis but Id not live there for a million pound pension.
jimbob.someroo
Journeyman Pro
I hope this is the way things will go
The BBC moving to Manchester was a good start, although obviously there were a few not happy about it. Seems silly that in an age where so much of the media industry is done digitally, companies still insist on having a base in London.
Wolfman
Tour Rookie
My father in law lives in his own home worth £280K approx. and he has approx.£10K savings
Would he have to use these assets to pay for care home fees if in a few months he became too frail to be left at home ?
I think its too late to transfer to a trust fund but we have started looking into a solution that if he needs a care home he doesn't end up losing all of his hard earned assets and savings where as in the same care home government will pay if you have nothing, doesn't seem fair
Any advice welcome
................sweet retirement! You get the TV remote when she's at work too!
