Anybody returning who cant afford to buy a house?
#121
Re: Anybody returning who cant afford to buy a house?
My house is already 300+ years old, I doubt another 40 years will make it depreciate suddenly - normally people pay a premium for period properties, not the other way around.
#122
Re: Anybody returning who cant afford to buy a house?
Even if the building is wood frame, however, if the land it is built on appreciates in value, that will wipe out the depreciation on the building. This is what happened to our house in Canada, which was built in 1941, but on an appreciating inner city site. The notional depreciaton on the building gave us a nice perk in lower city tax, since the city's valuations automatically dropped every year.
#123
Re: Anybody returning who cant afford to buy a house?
Here is the Excel for Dummies spreadsheet I used in case anyone wants to look at their own scenario.
#124
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Joined: Apr 2014
Posts: 180
Re: Anybody returning who cant afford to buy a house?
#125
Lost in BE Cyberspace
Joined: Feb 2013
Posts: 6,148
Re: Anybody returning who cant afford to buy a house?
In this example I agree that ownership is beneficial, infact if you know you are going to stay put forever in one place it is beneficial.
One thing to note the value of the house is 310k in 40 years that is an NPV of roughly 208k so you have only seen a capital increase of 4% (this may not beat inflation but you did use a 1% conservative HPI).
Again this is 208k in capital the renter will not have but then again your example does not take into account maintenance and some other factors. In 40 years time your house will be 40 years old, I'd be interested in looking at future house prices as a function of depreciation based on house age.
I agree there are benefits for owning houses if you are sure you are going to stay put for at least 5 years.
Also not sure on the actual historic rental inflation but from my own experience my rent either didnt increase yoy or went up no more than 1%.
I should say I am not debating you are wrong anymore, I do htink there are a lot of good points to debate here!
One thing to note the value of the house is 310k in 40 years that is an NPV of roughly 208k so you have only seen a capital increase of 4% (this may not beat inflation but you did use a 1% conservative HPI).
Again this is 208k in capital the renter will not have but then again your example does not take into account maintenance and some other factors. In 40 years time your house will be 40 years old, I'd be interested in looking at future house prices as a function of depreciation based on house age.
I agree there are benefits for owning houses if you are sure you are going to stay put for at least 5 years.
Also not sure on the actual historic rental inflation but from my own experience my rent either didnt increase yoy or went up no more than 1%.
I should say I am not debating you are wrong anymore, I do htink there are a lot of good points to debate here!
#126
Forum Regular
Joined: Jan 2011
Posts: 181
Re: Anybody returning who cant afford to buy a house?
On the contrary, I think tenants have more rights in the UK than in many (perhaps not all) states in the US.
Tip: try to find a landlord who has rented the house for a number of years, because he is less likely to decide that owning rental property "just isn't for him", or only be a landlord because he's "waiting for the right time to sell" a house that he inherited or previously lived in.
Tip: try to find a landlord who has rented the house for a number of years, because he is less likely to decide that owning rental property "just isn't for him", or only be a landlord because he's "waiting for the right time to sell" a house that he inherited or previously lived in.
I am expecting to return home to England soon and have already made a couple of exploratory trips to size up where I will live and whether I will rent or buy. I was angered when I enquired at a couple of letting and estate agents about renting. First they wanted to do a credit check-and charge me a fee of
£80.00 for the first reference check, and £50.00 for each subsequent check. These fees were not refundable even if the checks were not satisfactory. Further, the letting agencies would also charge a monthly "administrative fee" on top of the rent. And this is all legal.
Renting in Canada and the U.K. is chalk and cheese. In Canada there are many, many rental property companies-that is businesses, renting apartments in purpose-built blocks. In the U.K. however, it seems that most rentals are private offered by individuals who, as Pulaski points out, may well only be renting as part of their individual financial plans, and with only short-hold leases, usually 6 months. Not much good for those looking at a long term, multi-year rental.
#127
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Joined: Nov 2014
Posts: 3
Re: Anybody returning who cant afford to buy a house?
Returning to the UK can be very difficult and renting in the UK is sometimes the only option for returning expats if they don't have enough capital to buy a house and are too old to get a mortgage. Standard tenancies are 6 months, with a deposit of upwards of a month's rent, and fees for the letting agent often amounting to a month's rent. Many charge a separate fee for drawing up the contract. If you have no credit rating because you have been out of the UK for a long period, you may have to pay 6 month's rent in advance. If you then decide to move and the property you want is with a different agent, you pay the fees all over again.
Low cost housing is an alternative if you have some reserve funds, but there is nothing really 'low cost'. For social housing/shared equity, most expats will not qualify, or will be so low down on a waiting list as to make no difference. For park homes, it depends on the area in which you live. Park homes in my area start at 90,000 GBP because it's a tourist destination. Non-park homes only have 10 month licences, many will not allow occupancy for more than 30 days at a time and you cannot have mail delivered there.
Low cost housing is an alternative if you have some reserve funds, but there is nothing really 'low cost'. For social housing/shared equity, most expats will not qualify, or will be so low down on a waiting list as to make no difference. For park homes, it depends on the area in which you live. Park homes in my area start at 90,000 GBP because it's a tourist destination. Non-park homes only have 10 month licences, many will not allow occupancy for more than 30 days at a time and you cannot have mail delivered there.
#128
Forum Regular
Joined: Jan 2011
Posts: 181
Re: Anybody returning who cant afford to buy a house?
Returning to the UK can be very difficult and renting in the UK is sometimes the only option for returning expats if they don't have enough capital to buy a house and are too old to get a mortgage. Standard tenancies are 6 months, with a deposit of upwards of a month's rent, and fees for the letting agent often amounting to a month's rent. Many charge a separate fee for drawing up the contract. If you have no credit rating because you have been out of the UK for a long period, you may have to pay 6 month's rent in advance. If you then decide to move and the property you want is with a different agent, you pay the fees all over again.
Low cost housing is an alternative if you have some reserve funds, but there is nothing really 'low cost'. For social housing/shared equity, most expats will not qualify, or will be so low down on a waiting list as to make no difference. For park homes, it depends on the area in which you live. Park homes in my area start at 90,000 GBP because it's a tourist destination. Non-park homes only have 10 month licences, many will not allow occupancy for more than 30 days at a time and you cannot have mail delivered there.
Low cost housing is an alternative if you have some reserve funds, but there is nothing really 'low cost'. For social housing/shared equity, most expats will not qualify, or will be so low down on a waiting list as to make no difference. For park homes, it depends on the area in which you live. Park homes in my area start at 90,000 GBP because it's a tourist destination. Non-park homes only have 10 month licences, many will not allow occupancy for more than 30 days at a time and you cannot have mail delivered there.
If I were to buy, I would, like so many in the U.K. (and here), be house rich and cash poor. Renting, see links below, and as discussed on Brit Expats is full of uncertainty and unless a rental is secured by a direct landlord arrangement, predatory letting agencies are the only recourse.
Shelter, a major UK advocate for the homeless (anybody remember "Kathy Come Home") is running a campaign to make letting agency fees illegal), a motion is being discussed in parliament to encourage landlords to offer 3 year leases, but there are powerful interests in the UK that simply do not want the present landlord / tenant act changed.
Massive net inward migration, encouraged by both major parties did not consider available housing; there is terrific resistance to building on green land, so a classic supply/demand situation arises. I am surprised that the housing crisis, and it is a crisis, has not led to social unrest.
I did look at mobile, or park homes-and the newer models were very nice, but price-wise I found most in excess of GBP150,000.00. Electricity and gas are usually sold through the park home site, at a premium, and worse, if you want to sell, the site owner is entitled to 10% of the proceeds. Then there are the pitch fees-depending on location, anywhere from GBP150 pm to GBP250.00 pm. However, there is security of tenure.
I did see some enticing ads that were aimed at the +60s looking to buy. At first glance it appeared to be ideal-Home for Life it was called. Buy a home priced at GBP200,000.00 at a discount of 40%. I thought it was some kind of shared equity. Not so. Read the fine print. Basically it was a lifetime lease, and when you fell off the perch, the entire equity reverted to leaseholder.
I did see some brand new 3 bed homes in a Kent seaside town, and they were nice, for GBP185,000.00. However, within the time it took to organize funds from Canada, the price had risen to GBP219,000.00-three weeks! Fortunately I got my deposit back.
There is an ad running in the U.K., for a government scheme called Help to Buy, and even seniors were included. Really it was aimed at those with a deposit of 5%; I could put a deposit of 75%, but for the remainder, I would have to get a mortgage-which would only be available-maybe-by paying a broker a huge fee, GBP3500.00 and a rate of 6%.
I don't know the answer to the buy/rent crisis, but one thing I do know is that I am now having serious thoughts about my going-home-plans.
Our housing crisis will dominate the political agenda for decades - Telegraph
'Letting agent charged £1,260 to change two names – then evicted us' - Telegraph
The cost of renting in your 20s? £66,800 - Telegraph
#129
Lost in BE Cyberspace
Joined: Feb 2013
Posts: 6,148
Re: Anybody returning who cant afford to buy a house?
I never imagined when I first contemplated going back England to live that housing-renting or buying would be so problematic. Most of my thoughts on the subject were informed by my decades of life in Canada.
If I were to buy, I would, like so many in the U.K. (and here), be house rich and cash poor. Renting, see links below, and as discussed on Brit Expats is full of uncertainty and unless a rental is secured by a direct landlord arrangement, predatory letting agencies are the only recourse.
Shelter, a major UK advocate for the homeless (anybody remember "Kathy Come Home") is running a campaign to make letting agency fees illegal), a motion is being discussed in parliament to encourage landlords to offer 3 year leases, but there are powerful interests in the UK that simply do not want the present landlord / tenant act changed.
Massive net inward migration, encouraged by both major parties did not consider available housing; there is terrific resistance to building on green land, so a classic supply/demand situation arises. I am surprised that the housing crisis, and it is a crisis, has not led to social unrest.
I did look at mobile, or park homes-and the newer models were very nice, but price-wise I found most in excess of GBP150,000.00. Electricity and gas are usually sold through the park home site, at a premium, and worse, if you want to sell, the site owner is entitled to 10% of the proceeds. Then there are the pitch fees-depending on location, anywhere from GBP150 pm to GBP250.00 pm. However, there is security of tenure.
I did see some enticing ads that were aimed at the +60s looking to buy. At first glance it appeared to be ideal-Home for Life it was called. Buy a home priced at GBP200,000.00 at a discount of 40%. I thought it was some kind of shared equity. Not so. Read the fine print. Basically it was a lifetime lease, and when you fell off the perch, the entire equity reverted to leaseholder.
I did see some brand new 3 bed homes in a Kent seaside town, and they were nice, for GBP185,000.00. However, within the time it took to organize funds from Canada, the price had risen to GBP219,000.00-three weeks! Fortunately I got my deposit back.
There is an ad running in the U.K., for a government scheme called Help to Buy, and even seniors were included. Really it was aimed at those with a deposit of 5%; I could put a deposit of 75%, but for the remainder, I would have to get a mortgage-which would only be available-maybe-by paying a broker a huge fee, GBP3500.00 and a rate of 6%.
I don't know the answer to the buy/rent crisis, but one thing I do know is that I am now having serious thoughts about my going-home-plans.
Our housing crisis will dominate the political agenda for decades - Telegraph
'Letting agent charged £1,260 to change two names – then evicted us' - Telegraph
The cost of renting in your 20s? £66,800 - Telegraph
If I were to buy, I would, like so many in the U.K. (and here), be house rich and cash poor. Renting, see links below, and as discussed on Brit Expats is full of uncertainty and unless a rental is secured by a direct landlord arrangement, predatory letting agencies are the only recourse.
Shelter, a major UK advocate for the homeless (anybody remember "Kathy Come Home") is running a campaign to make letting agency fees illegal), a motion is being discussed in parliament to encourage landlords to offer 3 year leases, but there are powerful interests in the UK that simply do not want the present landlord / tenant act changed.
Massive net inward migration, encouraged by both major parties did not consider available housing; there is terrific resistance to building on green land, so a classic supply/demand situation arises. I am surprised that the housing crisis, and it is a crisis, has not led to social unrest.
I did look at mobile, or park homes-and the newer models were very nice, but price-wise I found most in excess of GBP150,000.00. Electricity and gas are usually sold through the park home site, at a premium, and worse, if you want to sell, the site owner is entitled to 10% of the proceeds. Then there are the pitch fees-depending on location, anywhere from GBP150 pm to GBP250.00 pm. However, there is security of tenure.
I did see some enticing ads that were aimed at the +60s looking to buy. At first glance it appeared to be ideal-Home for Life it was called. Buy a home priced at GBP200,000.00 at a discount of 40%. I thought it was some kind of shared equity. Not so. Read the fine print. Basically it was a lifetime lease, and when you fell off the perch, the entire equity reverted to leaseholder.
I did see some brand new 3 bed homes in a Kent seaside town, and they were nice, for GBP185,000.00. However, within the time it took to organize funds from Canada, the price had risen to GBP219,000.00-three weeks! Fortunately I got my deposit back.
There is an ad running in the U.K., for a government scheme called Help to Buy, and even seniors were included. Really it was aimed at those with a deposit of 5%; I could put a deposit of 75%, but for the remainder, I would have to get a mortgage-which would only be available-maybe-by paying a broker a huge fee, GBP3500.00 and a rate of 6%.
I don't know the answer to the buy/rent crisis, but one thing I do know is that I am now having serious thoughts about my going-home-plans.
Our housing crisis will dominate the political agenda for decades - Telegraph
'Letting agent charged £1,260 to change two names – then evicted us' - Telegraph
The cost of renting in your 20s? £66,800 - Telegraph
#130
Lost in BE Cyberspace
Joined: Jan 2008
Posts: 41,518
Re: Anybody returning who cant afford to buy a house?
Emigrating is a bit like nuclear power. When I left I did not consider all the costs involved in decommissioning.
Plus our contemporaries here bought their houses for sixpence, have generally paid off the mortgage and are coasting into early retirement.
Plus our contemporaries here bought their houses for sixpence, have generally paid off the mortgage and are coasting into early retirement.
#131
Forum Regular
Joined: Jul 2010
Location: Cape Town
Posts: 65
Re: Anybody returning who cant afford to buy a house?
Sally
In three lines you said it all!! if only I had stayed in the U.K...
In three lines you said it all!! if only I had stayed in the U.K...
#134
Re: Anybody returning who cant afford to buy a house?
I am having serious wobbles worrying about this whole situation as we will be forced to rent. We live in a paid off house right now - but it is in Florida where real estate is relatively cheap. We would need all the proceeds to see us through retirement. And it wouldn't buy much more than a garden shed in the UK in any case. Sometimes it seems insane to start all over again as if we were 20 year olds. On the other hand...the tug to go home is still strong. Luckily, (or not) I have another couple of years to worry myself sick about it before we have to make a decision to actually move