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Amount spent by private renters is approaching parity with mortgage payments

independent.co.uk

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Re: Amount spent by private renters is approaching parity with mortgage payments

#51

Post by abtinf »

oceanswave wrote: post #34
brightball wrote: post #16

Earlier quoted context omitted.

I’m not sure that’s anything other than math. If I have a property and I decide to rent it, why would I rent it for anything less than the sum of my expenses plus a profit margin that will cover maintenance or repairs? Why would anyone else? A rental property is just like any other business.

Should an airline let a seat fly empty, or accept a price that’s less than the cost plus profit of the seat?

The general principle here is that, everything else being equal, if the marginal revenue exceeds marginal cost (i.e. revenue is greater than variable costs), you should make the sale. This is because you will lose less money than if you hadn’t made the sale.

Note however that airline pricing is notoriously difficult. There is no single price at which an airline may be flown profitably. It is an astounding achievement that the industry functions at all.

Re: Amount spent by private renters is approaching parity with mortgage payments

#52

Post by gambiting »

jstanley wrote: post #32
J-dawg wrote: post #27

The UK has a problem with housing supply, which will take time to fix. But what needs to happen urgently (and could happen virtually overnight if politicians wanted it to) is that renting needs to be made slightly less awful. Renting a home is no longer something that people do for a few years while they're young. Many will be doing it for life, and the rules need to change accordingly. Some ideas: - A total ban on a…

> A total ban on any agent's fees being charged to the tenant I got around this by negotiating directly with the landlord to renew the tenancy without involving the agent. Just because the agent sends you a letter saying you owe them £90 doesn't make it true, they actually have very little power.

The fixed term contract automatically becomes a rolling monthly contract by law, if neither side does anything. The agency can say you owe them whatever for renewal, but if neither you nor your landlord give each other the move out notice there's literally nothing you need to do, it becomes a periodic statutory contract automatically.

Re: Amount spent by private renters is approaching parity with mortgage payments

#53

Post by philjohn »

CalRobert wrote: post #39
J-dawg wrote: post #27

The UK has a problem with housing supply, which will take time to fix. But what needs to happen urgently (and could happen virtually overnight if politicians wanted it to) is that renting needs to be made slightly less awful. Renting a home is no longer something that people do for a few years while they're young. Many will be doing it for life, and the rules need to change accordingly. Some ideas: - A total ban on a…

Eh, for what it's worth it seems like making life terrible for landlords is a good way to convince the there's no point bothering with tenants, and thereby reduce the housing supply. We've tried that in Ireland - I'm the beneficiary of Rent Pressure Zones in Dublin and I think they're incredibly dumb; if you want more housing don't try your hardest to convince all the people thinking "hmm, should we rent Grandma's un…

Houses don't suddenly cease to exist when they are withdrawn from rental stock. For small and large landlords they would want to dispose of the asset as it's costing them money.

It's the inverse of the problem the BTL revolution had - small landlords buying up housing stock and driving prices up.

So, house no longer for rent - it'll go on sale, which means more houses available on the market, which would depress prices. The problem is that's unpalateable to the large Tory donors, so the only way out is to build build build (and maybe see if it's possible to forbid purchase by anyone but owner-occupiers).

Re: Amount spent by private renters is approaching parity with mortgage payments

#54

Post by loco5niner »

cdolan wrote: post #12
turblety wrote: post #9

Earlier quoted context omitted.

But the deposit is a massive issue. If you put that deposit into stocks and shares (a diversified portfolio) you could (will probably) find that outperform the cost of your mortgage and maintenance together. If they could get rid of the deposit you might break even with a stocks and shares investment plan. https://www.thebalance.com/real-estate-vs-stocks-which-is-th...

Are you advocating for zero money down mortgages? That’s what causes market crashes.

Sounds more like advocating for renting.

Re: Amount spent by private renters is approaching parity with mortgage payments

#55

Post by snarfybarfy »

cdolan wrote: post #12
turblety wrote: post #9

Earlier quoted context omitted.

But the deposit is a massive issue. If you put that deposit into stocks and shares (a diversified portfolio) you could (will probably) find that outperform the cost of your mortgage and maintenance together. If they could get rid of the deposit you might break even with a stocks and shares investment plan. https://www.thebalance.com/real-estate-vs-stocks-which-is-th...

Are you advocating for zero money down mortgages? That’s what causes market crashes.

No! He is advocating that 'mortage payment' != 'rent'

Costs to own roof over your head are in reality: mortgage + running costs + depreciation + cost of capital

Re: Amount spent by private renters is approaching parity with mortgage payments

#56

Post by snarfybarfy »

abtinf wrote: post #2

In a free market, rent will always be higher than cost of a property. If it were less, the property is an unprofitable investment and should be divested. This article drops critical context. 10 years ago, one of the earliest and most potent warning signs of the coming collapse was the extreme disparity between rents and mortgages. Home prices skyrocketed while rents remained relatively flat. And just a couple years b…

I think this only due to the fact that most owners equate mortgage payment to rent.

If you properly account for running costs, depreciation and capital cost then renting "should" cost about the same as ownership.

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