Explaining to my Mum why I pay rent instead of having a mortgage

[Rocky]

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So your mum is a maths teacher?

You could remind her that if you take out a 30 year mortgage on a £250,000 loan at a rate of 5% you will end up paying £555,000 for your home by the time your mortage is repaid. If you're on a varaible rate and rates go above the average you might end up paying nearly a million quid for a crummy one bed flat in an area where you have been mugged five times.

You could also tell her you feel happier calling the landlord to repair or replace the roof, kitchen, windows, foundations, drains and paintwork when their time has come, and that you can move with a months notice if you ever get mugged.

[aotagain]

This is a very interesting thread to dig out imo.

Back in 07, pre-recession, pre-sub-prime etc, from reading some of the posts, some folks were convinced that property was at that time a good long term investment.

It shows how the apparent certainty and 'normality' of house asset appreciation and paper wealth changes common sense thinking.

17 years after one of the worst house price crashes, must be enough for folks to forget ?

As someone said in the middle of the discussion, its all about timing, as with stock market as well.

If you can't believe how much your asset has appreciated and how lucky you are, that's probably a good time to sell, not buy.

As in dotcom boom days. Everything was going so well, you just had to keep buying shares. Then oh dear what happened next.

In the housing boom people were moving up the ladder, despite the price differential being higher and in general their earnings not keeping pace.

On the other hand, I know a few folks who moved up the ladder at the end of the last property crash, when houses were historically cheap and now they are still sitting on massive asset values. I'd like to think they were lucky, but at least 2 did it deliberately because they KNEW they weren't buying anywhere near the top and were effectively buying temporarily devalued assets.