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Buy, not rent, advice was a party pooper

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ROBERT WINFIELD, OPERATIONS DIRECTOR, CHARTWELL HEALTHCARE

When I mentioned I work in finance at a recent dinner party I was bombarded with opinions about interest rates and property prices and blamed for the credit crunch.

I am seriously thinking of saying I am an estate agent next time I am at a party so that I get less abuse.

As a seasoned professional I am usually non-committal on these issues and have well rehearsed answers to end the discussion quickly before a full-on debate rages and takes over the party.

But one statement did take me by surprise.

A middle-aged lady said she wasn’t going to buy property because interest rates were rising and therefore renting was a better option.

As a big fan of property ownership I mentioned to her that if interest rates rise it would increase costs to landlords which they will have to pass on to tenants.

As investment mortgages are typically more expensive the increase in rent could possibly outweigh the increase in interest rates.

Furthermore, as mortgages are still hard to come by at present the demand for rental property remains high and the classic supply and demand ethos will see rents rising as a result.

Therefore owning a property is a better option, was my argument.

The lady came back with this quote delivered in a condescending tone: “There are such things as fixed rate mortgages you know”.

At this point I decided to excuse myself.

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