Where the money went, 2006

[fivemack]

(SLC is the Student Loans Corporation; I have not suddenly become an inadequately-tithe-paying Mormon)


If you compare with 2004



I'm surprised how consistent my habits have been; housing's more expensive (a whole house in Cambridge costs more to rent than half a house in Cheltenham), I've stopped learning to drive, and, worryingly, I seem to have become about 25% meaner when I look at the 'charity' and 'gift.out' segments; this latter I need to do something about.

I should probably apologise in advance to American readers for the invisible sliver that is medical costs, and to the taxpayers of the future for the absence of 'savings' segments, though income tax and pension contributions come straight out of salary and don't show up in the data I use for these graphs.

Comments

Re: TMI

[papersky.livejournal.com]

Rent is money down the drain. But that doesn't mean it's always a bad idea.

It would make sense if you knew you always wanted to live there, or if you weren't buying at the top of the market (which I'd suspect you might be) and locking yourself in.

Best financial advice suggests that no more than 30% of your capital assets should be tied up in a house. For that matter, no more than 30% of your future income should.

(Having said that, I personally have the entirety of my capital assets in this apartment, and pretty much the entirety of my plausible future income too, but That's Different.)

Re: TMI

[aardvark179.livejournal.com]

I think the point at which buying becomes a sensible option is when the downsides of renting start to outweigh the financial arguments. The freedom to redecorate and such like, and the freedom from letting agencies' poliicy of doing maintenance that is adequate but nothing more are the two biggest ones for me, and given I'm putting 40% of the my post tax income into the savings account every month, I think I can probably even afford it.

£165K is probably slightly high as a starting price for Cambridge, provided you look around, I know at least one person who got quite a nice rabbit hutch for £155K, though I doubt I could fit my books in there.

Re: TMI

[fivemack.livejournal.com]

My letting agent appears significantly less evil than the average (that is, than Russells), though my interaction so far has been twice to appear in person and say '$MAJOR_APPLIANCE has broken down', a week or so after which a new $MAJOR_APPLIANCE of the cheapest available brand is installed into the house while I'm at work -- the agent lends the installers her key. They've repainted the outside of the house since I've been in it, and the inside of the house before I moved in.

I don't think I've ever felt the urge to redecorate, though I may be the sort of barbarian who sometimes views having more books than bookcases as a reason to get rid of books rather than to buy bookcases.

Re: TMI

[fivemack.livejournal.com]

I do feel that this is the top of the market, but I've felt that for the last four years, over which time house prices have approximately doubled.

I'll build a more fearsome data-miner and set it loose on www.mypropertyspy.co.uk this evening, they seem to have a dataset of the price paid for every house sold in England since 2000. It's presented for the gratification of estate agents rather than demographers, but fixing that is a Small Matter Of Perl. What I'm seeing in the small chunk (Histon Road and the end of Victoria Road, a region essentially consisting of houses bought by speculators for letting to students so maybe not relevant for my situation) that I've manually copy-and-pasted into gnumeric is:

• No house sold for about nine months after September 2001
  
• When they started selling again after that, prices abruptly roughly doubled from what they had been, possibly not coincidentally with interest rates having dropped from 6% to 4% between Feb 2000 and November 2001.
  
• Nobody sold between December 2005 and June 2006, whilst people had sold in that area every previous spring.
  
• 46 Histon Road sold in April 2000 for 107k, in July 2001 for 145k, and in July 2005 for 190k.
  
• The person who bought 52 Histon Road for 160k in September 2001 and sold it for 89k in March 2005 may deserve sympathy, though I haven't checked whether 52 Histon Road looks as if it burned down in February 2005. Or there might be a '1' missing from the database.
  

Re: TMI

[huggyrei.livejournal.com]

We bought because after a careful look into the type of places we wanted to live, it turned out to be just as expensive per month to rent as it would be to pay the mortgage, so we figured we might as well buy and actually have something to show for it later!

It's also probably a good idea to own somewhere by the time I retire, so I don't lose all my pension to accomodation costs, especially given problems with pension black holes and the ageing population and such.

Re: TMI

[fivemack.livejournal.com]

Here, I'm paying 750/month on a place whose clone down the road went for £230,000, which is a lot better than any conceivable mortgage deal could produce.

If you're making purchases now based on needing to do something before retirement, you're asserting that house prices are going to grow faster than wages for the next forty years; I'd be wary of putting a fiver on that bet, let alone my worldly wealth plus a 30% lien on my income unto death.

Re: TMI

[tau-iota-mu-c.livejournal.com]

I'd bet that such a house price growth would be symptom resulting from overpopulation though, as cities stop wanting to sprawl into their water catchment areas and viable residential land becomes harder to find. If we are approaching that world population peak supposedly around 10 billion (but not there yet), then that probably means we are going to be in this regime for a little while longer before population densities and land prices start plateuing.

Now that I'm finally making money, I reckon if prices don't start improving in 5 years, I might have to start considering buying then.

Re: TMI

[scat0324.livejournal.com]

I'd bet that such a house price growth would be symptom resulting from overpopulation though

It's not as simple as that. The cost of houses is a supply-and-demand thing, but the demand isn't just an increase in population - it's a change in aspirations meaning people don't want to share properties in the way they used to (mostly as families). With a downturn in the economy, I suspect people would go back to deciding to share in one way or the other, and demand for property would fall without a matching reduction in the overall population.

Re: TMI

[huggyrei.livejournal.com]

If house prices decrease and I want a better house, I'll sell this one and buy one really cheaply. If house prices increase, I'll get more money for this one when I sell. If I don't want to move, I'll be happy enough to stay here.

All I'm really betting on is that rent prices won't become significantly cheaper than mortgages so as to outweigh the benefits of completely owning a house and owing nothing after 25 years and the rights I have over my own place for owning rather than renting.