To ask who chooses to pay rent rather than buy?(227 Posts)
I am laid up at the moment and resorting to watching Homes under the Hammer etc. My query is who the dickens is choosing to pay £500 plus per month (some rentals are £1200+). Isn't this more than a mortgage? I'd be interested to know who renters are and why? Most of the properties are family homes rather than student lets etc so why would a 'grown up' choose to give their money to a landlord rather than service a mortgage?
Because they can't get a mortgage big enough?
How many people do you think have a choice?
I pay £500pm mortgage, plus fork out for any repairs, worry about equity, the hassle of selling up.
All because someone said renting was "throwing my money away".
If I rented a similar flat in my street id save £100pm and have a landlord who was responsible for maintenance and not have to worry about moving.
Anyone got a time machine?
people who cant buy?
you didn't really put much thought into this did you?
Because the deposit needed is astronomical.
I rent and pay more than £500 per month. I rent because my XH and I split up and sold the family home (as the mortgate was more than £1200 per month and I couldn't afford this myself). I am now a single parent to 3 DC and my income will not allow me to 'afford' a mortgage - even though I can afford the rent.
My ideal would be able to buy a property, but I cannot see that happening for a very long time...
Because I can't afford to buy.
Because I'm single and the mortgage on my 2 bed flat in a decent part of town with a lovely huge balcony would cost me double my rent. And I have a great landlady who totally sees it as my home. And who fixes anything that breaks as soon as. Hassle free living.
Because lots of people can't afford the huge deposit needed for a mortgage, so they have to rent or be homeless.
Because it isn't as easy to buy a property now as it used to be and it is bloody hard getting on that property ladder.
When I got my first mortgage in 1991 it was easy........lenders were chucking 95% mortgages at buyers left, right and centre. Massive difference now though sadly....I feel really sorry for people today setting out on their own!
What are you talking about op
There are thousands of 'grown-ups' renting, all for very 'grown -up' reasons.
I don't have the energy to type anymore.
People who can't afford/are trying to scrape together a deposit.
People who know they will only be living in that city temporarily.
People who like someone else being responsible for repairs, etcc
People who want to rent.
Well I admit I'm out of touch and I don't think I said that anyone was 'throwing their money away'. I was very taken aback that rent is so much. I wasn't making a moral judgement, just wondering who is making that choice. I'm not at home watching TV as a rule so it's a bit of an eye opener. What sort of deposit is needed for a mortgage these days?
Because while you are paying extortionate rent it can be extremely difficult to save up enough for a deposit so you can buy?
Because even then house/flat prices are so high it can be difficult/impossible to buy.
I can only afford to buy as I'm in a shared ownership scheme. Without that I'd be totally fucked even though I earn about average wage. Even with the scheme it's very difficult to upgrade to a 2 bed flat which we desperately need to do. It will involve moving out of out (un-posh) area, changing schools, changing childminders, increase commute to work etc etc, and paying out a LOT more.
People rent because buying a house involves of far more than paying a mortgage. Isn't that obvious?
I'm old enough to have bought houses when they were affordable. However, ds1 who has a similar job and income to me when I was his age, could pay a mortgage but even if he could save the enormous deposit, would be unlikely to get a mortgage big enough to buy a house.
People whose job involving moving fairly frequently - short term contracts can be very common in certain sectors and the next job many miles away. If you dont have DC moving round starting careers up that can be doable especially if you can move quickly.
We thought we had some work stability - bought house to give DC some stability DH now works other end of country and we'd like to join him but need to shift the house first.
If you would like to offer self employed dh and myself a mortgage we would very happily buy rather than rent.
Goldplated I agree with you - we desparately want to sell, but are in negative equity so there's no way it's going to happen for some time. Wish we had rented. I think there needs to be a radical overhaul of how we perceive renting in the UK - it's not all as evil as people think it is.
I prefer renting. It gives you more flexibility with jobs and your not iced to a place. I know plenty of people stuck in miserable, dven abusive relationships, and people severely depressed because try hate their jobs so much, but are to scared to try and change things because of their bloody mortgage. I wouldn't want all my spare cash going on large repairs when a landlor could do it anyway. I think buying is a good option if you are sitting on huge savings of course, but only then. It's not a necessity to me.
Hoe can you have possibly missed the fact that an extremely large deposit is needed, property prices are sky high (therefore uping the deposit amount) and the fact that banks are not that keen on lending.
Some people also just don't want the hassle of buying.
What sort of deposit is needed for a mortgage these days?
We had 40 K saved - we were first time buyers and bought a 3 bed semi in a cheap area of country. We borrowed the max we could. I forget how much of a % somewhere between 15% and 20 %.
never mind the fact that house prices are insane in comparison to wages.
Gosh, excuse all the typos, bloody phone.
We live in a very expensive part of Britain, was born here, and I made dh move here when we got together
We both have reasonably good jobs, but there is no way we could afford to buy anything half decent in my home town. No way at all. The houses around the corner from us are 750000 +
We have decided to rent, unless we get a massive windfall.
We only rent from private landlords, who are looking for long term tenants, and who are happy for us to make the house 'ours', paint walls, make changes. We pay £1150 a month rent, but we love the fact we are not responsible for anything that goes wrong with the property, we have a very hands off landlord who leaves us to it, unless we call him.
I would find it very difficult to rent from a landlord who wouldn't let us paint the walls and was popping in every minute.
Of course owning our own home would be ideal, but it really isn't a massive deal that we don't. I don't feel the need to own a home. It is not a big deal for us.
If the money landed in our lap, we would buy, but we don't want to be indebted to a bank with a mortgage, much prefer to have a debt free life. If we need to move, we move, we are free (imo)
We currently do both not through choice.
The house we currently live in we rent.. we've been renting for the last few months. We're trying to sell our old house - we're only NOW after several years of massive overpayments on the mortgage at a point where we are out of negative equity and could afford to sell the tiny house we've long since outgrown, and finally leave the area we'd been desperate to leave for years.
Given we live in the south east and have three DC there's no way we have the money for a deposit on a new place so renting was the only way we could move. We'll need to rent for the next few years (probably an awful lot more) at least until we've saved up as a bare minimum a 10% deposit for a new one. Thanks to the boom and subsequent crash it's taken us this long just to get back to square one.
Renting is great, if you have a good landlord. It can also be very restrictive. I would always choose to buy if I could afford it but can see why others would choose to rent.
We spent a lot of money on the upkeep of the property - windows, wiring, boilers and it took about years before we paid less in mortgage repayments than we could rent similar for -that was a repayment morguage.
Plus property is now worth less then we paid for it.
Because there's no other choice!
We are in our twenties, would love to buy a house and would MUCH MUCH MUCH rather pay a mortgage than rent but we don't have the money for a deposit on a mortgage and saving doesn't happen with a young child!
Realistically, but sadly.... we won't be able to have a mortgage unless we win the lottery (better start doing it!) Or we inherite anything.
Well I've just bought the house that I've been renting since early 2009. In that time the price of the house has reduced by alot more than the rent I paid. I would have quite happily continued renting but the landlord wanted to sell and I didn't want the hassle of moving. In my case the rent was anything but "dead money"
1. people who have to move area but haven't got their house sold, or have their money tied up in some other way
2. those who think the property market will fall
3. those who are saving up for their ideal property
4. parents who are trying to get their child into a particular school (catchment area)
4. those who want to try out a new area before committing
5. those who are on a relocation package
I didn't think you were serious? A deposit is at least 20% can be up to 40%. Alot of everyday people can't lay their hands on that.
Also if you are paying interest only you are effectively only renting from the bank anyway.
But your supposition is right IMO, buying is preferable to renting because you can at least decide what colour your front door should be and where you can hang pictures.
Ooh don't I feel judged. I'm not sure I can handle the shame of renting.
OP perhaps you could speak to my bank manager and get him to give me a 95% mortgage and then I could afford to buy a shitty little flat, rather than renting the lovely 3bed house with garden that I can afford and have lived in for the past 5 years.
Oh ps, I'm also a "grown-up" don't you know.
We rent because it took 4 years to sell our old house having moved to a new area. During that time we used all our savings to pay the mortgage/council tax on old house whilst paying rent in new house. On selling house we made no money on it so now have no deposit. To buy a £100k house (even on our local council estate a 2 bed is £160k) we will need to save at least a £20k deposit, which is more than my annual take home pay, so it could be a long time.
YABU to think people can just go and 'buy a house'
"I why would a 'grown up' choose to give their money to a landlord rather than service a mortgage?"
This attitude is quite offensive tbh.
Here's some maths for you. I pay £1350 rent pcm. Average deposit needed in my area is £70K. I earn £25K.
Thank you for the responses. As I say I'm out of touch with house buying and haven't rented for about thirty years. So if things are so difficult, the question might then be why are houses so expensive? What is supporting the price? Someone must be buying them. It seems totally contradictory to me. Just thinking aloud really, didn't expect the sarcasm from me or two posters.
Because I don't have £40-70k up my sleeve for a 25-40% deposit.
I don't know Catriona100 - we spent the last few years painting the house in nutural colours as we've known due to work we'd need to move at some point.
What is supporting the price? Someone must be buying them. It seems totally contradictory to me.
Not enough houses round - they don't build enough.
Buy to lets.
Folk like us who spend years and years saving and do without - some have inheritance.
It does get galling when older folk talk of our generation spending money on fancy gadgets and other frivolous stuff.
your figures don't add up IME, OP. with even a 15% deposit, the monthly repayments on something even just big enough for our family, in town, would be £750ish.
so we pay 675 rent for a much bigger house, in a beautiful village location, where property maintenance is our landlord's problem. we have also been able to move house easily, at short notice.
I owned my first property at 21 when 100% mortgages were available and it was cheaper than renting. but while we are establishing our family, renting has certainly been a sensible option. less stress and a better quality of life. we are saving to buy again when I am back at work etc.
Why are houses so expensive? What is supporting the price? Where have you been living for the past 10/12 years?!!!
Unregulated lending; 125% mortgages; total faith in house prices only ever going up giving rise to unwarranted confidence...
Gordon Brown screwing around with the pensions which meant that people put their money into 'bricks and mortar' rather than pensions.
When people started thinking of homes in terms of property and investment.
We have a mortgage but wouldn't be able to get a mortgage on our house now - raising a big enough deposit is a huge stumbling block for many people, it is much more difficult to buy now than it was a few years ago. Incidentally, it would cost is roughly £300 PCM more to rent an equivalent house so you're not necessarily wrong on that matter, but many people have no choice but to rent.
houses are expensive because a place to live in a basic necessity. If you have 100 houses and 105 different combinations of people lookign for a roof over their heads then the 100 who are willing to pay the most are going to get the properties and the other 5 are going to do everything in their power to up their budgets for when something else becomes available.
Comparing the world now to that of 30 eyars ago, think how many families now have 2 divorced parents each with their own space. or how many grown up children live and work away from home. Or how many new people live in Britain.
Deposit on a three bed in my part of town is £80,000 minimum.
I'm not judging . As I mentioned, I meant 'grown up' as opposed to student.
I've found the answers interesting and informative.
I had no idea that such a hefty deposit was required.
Us too - house prices here are at least £200k. We'd need at least a 10% deposit, so would need to save £20k. Even with a 95% mortgage, we'd still need to save £10k.
I'd love to buy; we'd have so much more choice and wouldn't be at the whim of a landlord. I could make the house my own in terms of decor, we'd have equity that out children would eventually inherit ... <sighs>
Most landlords we've had have been fine, but as renting is in increasing demand because thousands of people are in our situation (and other reasons mentioned above), landlords seem to be making more stipulations - where we are at least. We're looking to move as we need a larger property and it's more difficult now that it was when we last moved 5 years ago.
Keep dreaming, Molotov, cuz you're gonna be renting for many years yet.
Do you not hear/read about current affairs at all op? It's been an ongoing story for quite a while,and not just on homes under the hammer, on the news
Loa - we rent too. Our previous landlord had a history of pretending horror at any minor change the tenants before us made and taking lumps of the deposit to reinstate the property. So, we learned from their experience that if a bedroom has lime green walls and a purple ceiling, you either get agreement beforehand for the change or pay up and put up with it.
are you taking the piss OP?
You are really asking why houses are so expensive?
How have you let yourself get so out of touch?
fluffiphlox - don't you follow the news?
And also did you miss that students now incur massive debts while at uni, so no, they cannot buy a house as soon as they graduate to grown-uphood.
Yes I am aware of the news. But where I live property is still going up slowly so that suggests there is a demand, so someone must be buying. As I say the whole thing sounds totally contradictory. I don't really need the sarcasm, I have appreciated the more straightforward answers.
even if you have a good salary, it takes ages to save up a decent deposit with house prices as high as they currently are
"why are houses so expensive? What is supporting the price?"
high demand-low supply
more people needing houses than are available, power resides with owners of houses that were given 100%/90% mortgages to play with and bought houses that were too expensive. they refuse to drop the price and lose money, so people rent off them rather than buy- they're getting their mortgage paid and the person in need gets more affordable (than a deposit/mortgage) a roof over their head.
i also agree that unless you are paying capital off your mortgage, you're still only renting.
Yep, pretty much what everyone else said. It's obvious, isn't it?
My rent is well over 500 and I know people who're paying over a grand a month for little one and two-bed flats, and it's depressing. But you need a deposit for a mortgage, and you also need a steady income.
It's not a choice.
then honestly why are you asking such basic questions? That's not sarcastic BTW
The average house price in the Uk is £250,000 and most lenders at the moment require 20 a 25% deposit so at least £50,000. And in order to borrow £200,000 you need to be earning approximately 25% percent of the loan amount so you must have an income of at least £50,000.
And crunching the numbers on real house valuations, the mortgage repayments including interest on an 80% mortgage would be about 10% less than the rental amount. For that extra 10%, the tenant gets repairs, maintenance, heating, electricity and appliance cover and protection from investment loss. So, in response to 'isn't that more than a mortgage', only marginally.
I loathe owning a house. I worry about it constantly (it's an old house) and tbh I feel pressured into having a gracious home. Renting was great (good landlords always) as roof maintained, pointing maintained, decorating done by them: worth the money for peace of mind and detachment.
Of course it's like a pot to keep your savings in, I can see that, wish there were a different way as homeowning is stressful and tedious.
I make the choice. I've owned my own home and it was a pain in the fucking arse.
I doubt I would ever buy again.
Unless I won the lottery
Is it actually any cheaper to have a mortgage?
Pay your rent.
For this, you get a roof over your head, and your repairs are (or should be!) done for you.
downside - some places don't let you decorate how you want to and if you're in private rented, you can be asked to leave.
You don't ever own the property.
you pay your mortgage
and buildings insurance
and are responsible for all repairs
you own your house after the purchase price plus all the interest has been paid off.
by which time you are quite elderly and may need to sell it again to pay for your care.
Assuming you don't, you basically pay off your mortgage and die. So your kids inherit.
I would love someone to work out how much a house of, say £150, 000 ACTUALLY costs. the £150,000 + interest on the £150,000 + buildings insurance + average cost of repairs + any legal fees etc + factor in at least one move...
and compare that to rent x X years.
(I'd do it myself but I am shit at maths)
Seems to me that at the end of the day, the financial benefit of having a mortgage as opposed to renting is really your children's. Not yours. And the only real benefit is that providing you pay your mortgage, you won't be asked to leave.
And you can choose what colour to paint your walls.
And whether to have one cat or ten
It seems to me it's more about perceived freedom than finances.
I prefer to rent rather than buy. Had houses and mortgages when I was first married and was always worrying about the insurance, or the drains etc. and also I couldn't afford to buy what I can afford to rent. Once I was divorced I hadn't enough money for a deposit so had to rent. Actually I now find it's better. I've moved down south so property is very expensive to buy but I can rent a substantial place with grounds etc. whereas I could never afford to buy such a place (not a big salary and still no deposit!) Also, I don't have to worry about upkeep of the place, the owners do that. I will still rent when I reach retirement, it means I can choose to move to any part of the country I please, I'm not tied to a property and all my money is free for me to spend, not sink it into some deposit on a roof over my head....
Having your own home does not equal savings pot. You'd think it would, but it doesn't always work out that way!
Some people rent because, although they would prefer to buy, they have no option but to rent - they do not have the deposit.
I know many people who could afford to buy but choose not too. They prefer the flexibility, not being tied to one city (or country), not having to be bothered with maintenance etc. What's the point of buying a house in London if next year you will be in New York or Tokyo, and who knows the year after that? A lot of people don't buy until they are into their 30s and have chosen where they want to settle down.
I also know people who rent because it works for them from a tax perspective - people who, despite being UK resident and working here, have no UK bank accounts - the rent is paid from an offshore account, or in cash.
Also some people may not get approved for a mortgage particularly if they have a bad credit history.
Haven't read all the thread but I rent for a number of reasons, mainly financial. I owned with my ex and when we split three years ago the only option then was for him to buy me out. So now I'm off the ladder and the £1287 me and dp pay in childcare fees means we have no hope of saving deposit til dd hits school, especially when paying £1100 rent. So there are many reasons why people rent op, it's not always about choosing not to buy
What's the contradiction?
House building hasn't met demand since 1980.
Right to buy flooded the market with cheap property that then sold for high, high prices
Banks gave out 120% loans
Homes were overvalued
Buy to let mortgages meant people could buy up swathes of housing to let out
Many homes are empty despite demand
Banks now don't lend without large deposits (standard first time mortgage was 40% deposit three years ago, it has gone down a bit since then to 20-40%)
The only people who are buying are people who bought early and have a large amount of equity in their homes, meaning they can pay v high prices. This pushes up the price further and makes housing costs unlinked to wages.
Wages, especially for graduatates, have stagnated.
In 1990 the average house was 3x the average salary. It is now 7x the average salary.
Many sellers are putting their houses on at prices that are ridiculous and are unwilling to be told so (there have been some threads like this recently)
Homeowners expected their house value to rise so house prices raises became a self fulfilling prophesy
Oh, and by the way, not all rents stipulate whether you can decorate or not. I've had rented places where the owners don't care and I've repainted, made alterations, fitted new kitchens and put in fireplaces etc. It's added value for the owner so they are happy. Also, if you go to a rural county such as Lincolnshire or Herefordshire, there are whole farmhouses on estates which are lying empty 'cos no-one wants to live in them. You can rent them from the landowner, do them up and even pass them onto your children so long as you pay the estate rent...brilliant, don't know why more people don't do it. In France most homes are rented rather then bought, it's only UK which has a real "thing" about owning your home...
Catriona100. I am asking 'basic questions' because I want to know the answers. It all seems, as I have said, totally contradictory. Property values seem to go up regardless, admittedly slowly.
Thanks again for the reasoned responses.
My understanding of a lot of issues, based on cursory knowledge:
Buy-to-let and Property Developers have had a major impact in keeping house prices high - those who made money in the boom times, deciding to let their investments to make an income, and / or buy more houses and do the same again. My completely anecdotal inkling is that these people are the ones buying a lot of houses. They have high rents because of the housing shortage in some areas (plus the fact that not many people have the deposits thanks to the change in lending culture post-credit crunch), and as a consequence people can't afford to save for deposits. Plus, as people have said, because the lenders are a lot stricter post-credit crunch, you have to have 10-20% at least ready for a deposit - the thing feeds on itself.
The people buying seem to be: a) those who made money in boom times (i.e. lucky enough to have bought and sold either at the right time, or in the right place) b) professional or semi-professional property developers c) people who have in inheritance, d) people whose parents can give them a deposit.
There are some schemes, mainly new builds where you can borrow some of the deposit, but these tend not worthwhile for the long term: i.e. if you are like me, in your early 30s and hoping to buy a family home that will grow in value rather than a new build one bed flat that will probably never sell again.
this will not end well
<marks place and goes to make cuppa>
Hectate - downsides of renting.
1. the rent goes up annually and it all depends on how much the landlord thinks he can get away with. If you don't like it, then you can leave:
If you are in a furnished place, you can just pack your suitcase and move. It only means a day off work, plus the money to get the whole place professionally cleaned, plus the hassle of trying to get your deposit back, doing all the change of address stuff etc
But if you rent unfurnished then its all the above plus a full house pack and move. Last time it cost me 6 weeks of my life and £2000
In sum: the rich are getting richer!
Also the interest rate has been ridiculously low for a few years now which means that people have either switched to very low interest only repayments or their capital and interest repayments are just lower.
It also means that with an interest rate so much lower than inflation, savings are losing value all the time and when people are faced with saving for years to raise a mortgage and seeing the value of those savings drop all the time, it's like swimming upstream.
Anyone would think they wanted people to spend instead of save...
Because my rent is £400pcm. And then I have very few repair costs.
The mortgage on an equivalent house would be £800pcm plus all the running costs that comes with owning.
We bought our first property in 1999, we weren't planning to buy but our landlord was selling, we put down deposit (90%) and fees were less than £10k and landlord left all furniture and appliances. If took all our savings by at the time saved us £200 a month in rent. It was a no brainer for us.
I still live in that same area (in South East), neighbours and friends with kids pay between £1,500- &2,000 pm for 2 or 3 bed flats. Many would live to buy but nee £100k for a 20% deposit, they can't save because rent takes up so much of their income, but they are toed to the South East because of work.
fluffiphlox - can't you work most of this out for yourself? the news is full of stories about how big deposits need to be, how x number of new houses are needed, banks not lending, etc.
tbf catriona mortgages, unless on a fixed rate go up (and down) in price aswell from year to year.
We rent because we have two other mortgages. Reluctant landlords and reluctant tenants. It is quite nice though. I like not feeling responsible for getting things fixed.
OP, genuine question, how do you not know about this stuff?
I needed 30-40k to buy a 250k house on a rubbish interest rate..... That's why I rent as I don't have the deposit. Eats me up inside at the lack of pension / inheritance/ moving my son from school to school and feeling lile imnever able to give him a proper home.
Also the fact the mortgage would probably be half the rent.
But oh hum it's the world we live in
I'm in my late 30s and a graduate professional.
I don't know anyone else in this position (or younger) who bought without help from their parents - anything from parents giving an interest free house loan to the children; to the parents buying a flat/small house as a wedding present; a living inheritance; parents giving the deposit; parents 'investing' in the house hoping to recoup that when the house is sold at a much higher price...
I'm not saying there aren't any who haven't done it without help, but I don't know any personally.
Oh my god! You're completely right, what have I been doing all this time?! I'm so glad you pointed it out. I'll go get a mortgage right now. Silly me.
Unlike some posters above, I love in the cheaper North of England. House prices are lower and 3 years ago we managed to buy a 'bargain house' costing £85. We still had to put down a £15k deposit and jump through hoops to get a descent mortgage.
5 years before that my DH had bought a house with his friend for £120k with no deposit and walked into the mortgage. Luckily he got out of that before the house price fell and he suffered any loss
Folkgirl I don't know anyone either who didn't get some sort of 'help'.
Catriona100. You seem very cross with me. I am out of touch with house buying, as I say, having not moved since 2000. I see my house as a home not as an investment or a pension, so I don't keep an eye on property. I am injured and in front of daytime telly. I was surprised at the cost of renting what seemed to be rather modest houses.
I live in a market town where a lot of toy town type houses are being built so I'm guessing there's a market. I had no idea that 40% deposits were required. In my day it was 5% if anything.
My initial query as why anyone would choose to pay rent rather than buy. I now see that it offers many people peace of mind, in that they don't have to worry about 'extras'.
Of course, were you living in certain areas of Spain or Ireland (where some properties have lost up to 75% of their value) then you would have been asking why anyone would ever choose to take on the huge risk of ownership.....
And there, in a nutshell, is your answer. In a politically stable environment, with stable supply/demand there is virtually no financial difference between buying and renting. Renting will be cheaper than a repayment mortgage but if you put the difference into a savings account earning libor, then after 25 years the cash saved up would be enough to buy the same property outright as you would have brought on a mtgge 25 years previously.
Thing is, we have politics, inflation and unbalanced supply/demand which buggers up the whole landscape, meaning that whichever side of the buy/rent market you sit on, you are taking a very serious gamble, with very serious money. And should you think "house prices have beaten inflation and other types of investment because of demand, so are a safer bet" or "house prices have beaten inflation and other investments, so must be due a huge downward correction and are therefore a very risky bet"? Which one is it to be? No one can answer that. Demand of course would collapse if we left the EU and all the immigrants were asked to leave
not sure the daily mail will be taking that stance any time soon - just as has happened in Spain with the whole 'second home' community fleeing for the hills.
Many other countries think the British are barking mad for our obsession with ownership, by the way.
do you think people have a choice it isnt as easy as you think to get a mortgage or raise a deposit it isn't all about the monthly mortgage imo there is a 101 other factors involved
our first house brought in 1996 deposits and fees was less than £5000 probably closer to 4 than 5. fast forward a fair few years, get divorced, split the equity (had moved house several times since so equity not as much as you'd assume) xh with a salary of £100k plus goes off and buys himself a lovely house no problems. Me salary of £38k can't get a mortgage for anywhere near big enough, for me and the 4 dc. Im talking 3 bed emis, not large detached houses. If i moved away from the area, i'd need to find a new job or have longer ours childcare, move the dc school (eldest is yr 11 so mid gcse)away from family who help out with a lot fo the childcare especially school holidays.
Plus or practical reasons, now i finally have a decent landlady who carries out repairs and has left me in a better position to be renting than buying. also if i was to buy my mortgage would be in the region of £1300 a month and my rent is a couple of hundred a month cheaper than that.
I'd like to see a complete change in attitude about renting and suspect we are moving towards it. For too long there's been an obsession with "getting onto the property ladder" in the UK. Regardless of the practicality or affordability. Which has undoubtedly helped to create the boom and bust conditions so far as property prices are concerned. Few countries in Europe seem to put this pressure on people to buy or create the impression that renting is some sort of second class option.
For people with average incomes, owning a house doesn't mean you are sitting on a gold mine. Any money made in equity will be balanced by the need to buy another property and certainly, very few people sit down and work out the hidden costs of house ownership. We're about to sell our house. It has risen in value quite ludicrously, in the years since it was bought but that so-called profit will have to go into buying the next house. If I added up the money we've spent on this house over the years we'd be making a loss on the initial investment.
Oh dear OP, poor you!
This is the very basic principle that lies behind the global economic recession that we are currently in! It's all because house prices were seen as some sort of golden goose and people have got into more and more debt buying houses - which are actually, very very overpriced.
So the world is now in recession and there is no way to get out of it without a lot of pain.
I rent, by the way - I'm divorced and there's no way I can buy a house with a single salary.
I'm not cross, OP. I Just started to answer your questions and then it hit me, that your questions are so basic (sorry but they really are), that i was wondering whether you are some sort of researcher trying to find out whether the general public has any basic understanding of economics as applied to the property market.
I would be cross however, if I thought you could work all this out but its just easier to get other people to do the thinking for you!
OP here. Yes none of my grandparents owned. Renting was the norm for them. We seem to have got into home ownership since perhaps the 60s?
You do seem rather obsessed by the element of chooice in buying or renting, OP. For many people choice is not a luxury they can exercise.
I have no chance of getting a mortgage. The cheapest flats in London are about 200K. Imagine I need at least 10% and probably more. I need to save 20K. How the arse am I supposed to do that when I also have to shell out £500 a month on rent?
Beyond that, house prices are so ridiculous that I'd be tied into the bloody house til I'm 150 years old.
It's just not an option for a lot of people.
Fluffiphlox I realize you dont realize and Im not having a go at you, but its talking about who chooses and whose making that choice as if it was a decision and everyone had a choice, that stings some and is why youre getting curt treatment.
I very rarely object to people not being aware of just how different others lives may be, but even I find the wording painful.
Unless a miracle happens (ie lottery) I will never own my home, (have been reprimanded for talking about 'my home' and told it is neither mine, nor a home, and is a 'dwelling unit') I will always live without basic security and at the whim of others. I worry hugely about if my dcs and dgcs will be ok and able to have work and keep a roof over their heads. They lose any right to be here as soon as they reach school leaving age.
Right now the government is looking to remove people who cant afford higher rents without help from areas that are popular, which equal higher rents and higher employment opportunities, and decant them to areas of mass unemployment into abandoned and hard to let housing thats being brought up by speculators keen to make money. Those able to buy them up will do well, but there will be little work for the poor souls forced into these places and they will not be choosing anything. Housing, and the repercussions of it, are very precarious for many.
A lot of young adults are not expecting to be in their current job for long.
Or same sort of job, but gets posted to a different are or even country. And/or they have dreams of going travelling.
So 6 to 12 months renting at a time suits them.
When we bought our house 20 years ago the bank wanted a deposit of 40%, due to dh's low income. Fortunately, dh is extremely economical and we had been engaged for many years.
In Sweden anyone who isn't interested in DIY would rent, they have high expectations on how houses should be looked after and kept up, but there is no shame in renting and letting the housing association do the work. Buying and not maintaining is seen as very shaming though.
I was an accidental landlord last year. I susidised my tenant to the tune of 150 quid/ month on the mortgage. I also paid the service charge for the building 1400 / year and would have covered any repair bills (fortunately nothing broke).
The rental yields on 2 bed flats in this city are ridiculously low. The only landlords who make money are the ones who owned the properties pre 2001. Consequently lots of people rent as they can't afford to buy the flat that they very comfortably afford to rent.
My youngest sibling is locked out of the property market here yet has a professional job and my parents are prepared to give her the same help they gave me and my brother. However the housing market has moved on a huge amount in 5 years and she is totally priced out.
I grew up here and I have friends (with good jobs) who live in areas that as teenagers we would never have considered. Some of that admittedly is due to areas coming up, but a lot of it is due to dumbing down of aspirations. Admittedly a lot of our parents are still living in big family houses in prime school catchment area locations and have no intentions of moving so they aren't exactly helping the situation!
I'm not a researcher but an injured woman, with too much time on her hands, staggered by the rents asked for modest houses. I know very few young people so wasn't aware at first hand of the 40% deposits.
I do watch the news, but it's informative to know how the high level stuff translates to real people's daily lives. There are four or five estate agents where I live and have been for years. I don't notice them going out of business. So the contradictions seem baffling to me. And yes, I know people who have had their house on the market for a long time and I assume that they've got it on for too much. Anything is only worth what someone is willing to pay, after all.
Just thinking aloud really, didn't expect the sarcasm from me or two posters.
I'm not sure what responce you were expecting from people who rent and
cannot get on the property ladder, or want to for various reasons when you ask a judgy and quite offensive question like why would a 'grown up' choose to give their money to a landlord rather than service a mortgage? and appear to be implying that if they were a proper adult with a job (not a student) they wouldn't need to rent.
A bit of sarcasm is IMO alot better than the tirade that threatened to come out of my mouth.
which most likely would have broken MN rules
I wish I still rented. I bought a lovely family home with great neighbours. I now have a heroin addict at one side and the loudest, shoutiest family in the world at the other. If I was a tenant I would be out of here so damn quick.
Unfortunately I'll have to put up with it as I won't be able to get another mortgage on a temp contract, assuming I was even able to sell the bloody place. A
@fluffiplox estate agents now charge people who are renting (and their landlords) v large fees. We paid £400 in London for ours. And they do sweet f a work. Just print out some forms and chase money.
YABU to ask, isn't it obvious?
We rent because we have no choice. Both our credit ratings are shot to shit so even if we could get a mortgage, we'd have to put down a big percentage as a deposit and funnily enough, haven't got tens of thousands of pounds just lying around. We live hand to mouth so it simply isn't an option.
I don't mind renting though. Because we're living hand to mouth, it's perfect for us. Complete peace of mind that if anything goes wrong with or in the property, it's not our responsibility to sort it out. We're not tied down either and could move relatively easily.
But have you looked at the rental yield.... I paid in excess of 2K/ month last year in London to rent a flat.
The yield was still v. low and less than most landlords mortgage interest rates. Capital growth is also poor at the moment.
The housing market is very depressed in areas of the country I have friend with nice well priced houses who are waiting a very long time for buyers.
What do you mean by 'choose'?
I wish posters were allowed to just ask questions, and get them answered nicely.
No one knows everything about everything.
Because we enjoy the flexibility of renting. We live in NYC and renting is much more commonplace across all income levels. I love the idea that we can move to another apartment/city on a whim.
We owned an apartment a couple of years ago and it took over a year to sell during the initial financial crisis. For now, we have zero interest in buying another place.
Seriously? There are loads of reasons for renting. Some through choice and some imposed upon you.
Want flexibility of where you live.
Don't want to buy just yet with current partner.
Don't want to have the hassle of buying somewhere and maintaining.
Can't find anything you actually want to buy.
Already own a house elsewhere you can't sell.
Can't save a deposit big enough.
Can't get a mortgage big enough.
I rent out a house I own up north and am living in london.
DP and I are renting a flat which is much nicer and in a much more central area than we could afford to buy. There is no way we'd get a half a million mortgage ( one bed flat!) but we can afford the rent just fine.
Not everyone is ready to move to the burbs in zone three and settle down in nappy valley!
Thanks to all. Most useful. Signing off for today. Hobbling off to kitchen for lunch.
Oh, and I wouldn't want to buy our flat as a one bed wouldn't be suitable long term. But I'm absolutely loving liviing in it at the moment ( and loving the lack of hassle of renting). Dishwasher broke, not out financial problem. New heating system installed? Aside from the inconvenience not our problem!
i wish posters were allowed to just ask questions, and get them answered nicely. I agree, but in asking in phrasing the question in a way that can be construed as offensive, (like inplying adults who rent are not grown-up for example) doesn't tend to be followed by "nice" answers.
know people who have had their house on the market for a long time and I assume that they've got it on for too much. Anything is only worth what someone is willing to pay, after all
Yes but its not always greed.
We need to cover the mortgage we took out but also the deposit for the next place or at least most of it.
House prices have dropped massively and we will make a massive loss on this property and the money we've done on upkeep won't reflect in the price- and I'm prepared for that though it hard to think that you've paid a repayment mortgage for over five years and may well come out with less for the next deposit than we started with.
For us as we pay rent and travel for DH to work away it may well be worth it but for the couple down the road trying to buy same number of bed roomed house but with more downstairs space for their DC then it's not and they might as well keep waiting to see if anyone comes along with an offer they can accept.
Basically there comes a point you can't sell beneath and you just have to hang on. If you cant then that is very different.
I'd have happily rented long term - we'd done it for ten years but we have had to move at short notice and have never been able to get longer contract than 6 months. Once DC hit school age we wanted stability for them not having to move every 6 months or 12 which was our prior experience.
Is this serious?
A lot of the time, there's no choice involved!
I think you've had your answers - it's simply out of some people's reach.
We are currently in the process of exchanging on our first home, we've managed to get a 95% mortgage but it worked out cheaper to buy our own place this time around. We need a better garden and a bigger kitchen and around here that meant we would have had a jump of around 20% on our current rent. Without my GP's help though, it just wouldn't have been an option for us and we've had to cash in a few bits and pieces to cover all the fees and surveys.
It may or may not be a smart move but in our family, it's not the 'done thing' to not own your own home and in all honesty, in the absence of a pension at the moment I don't know what else we can do to secure something for the future.
"I'd like to see a complete change in attitude about renting and suspect we are moving towards it."
i agree, but for that to happen, renting needs to be more secure for tenants and not as risky for LLs as it currently is.
2/3 of my wages go straight to my landlord. I'd have trouble saving enough deposit for a tent, let alone a house.
We had to sell our house nearly 3 years ago - took a bit of a hit with the selling price, but needed to pump money into our business after one of the Directors took out loans and then did a runner!
We were not prepared to lose the business, so sold the house to cover the debts.
Now we are stuck renting - its really expensive in our area. We pay £1100 per month, which is about the same as our mortgage was.
I do not see a way out in the near future - I hate renting.
"We need to cover the mortgage we took out but also the deposit for the next place or at least most of it."
That is a bit greedy actually. You obviously feel that SOMEONE else needs to cough up for your lifestyle choices by buying your overpriced house. It's quite entitled if you ask me.
We rent out our flat in the past to.
a) People testing out a new relationship and not wanting the commitment of a mortage.
b) Divorees getting their life back together before buying a new property.
c) Immigrants who have a temporary visa.
d) People on tempoary contracts
Aside from all the reasons already mentioned some people just have no desire to 'own' a property. I really don't get spending hundreds of thousands of pounds on a tiny bit land with a brick building on it. If someone gave me £200,000 tomorrow i wouldn't want to throw it all at bricks and mortar, i'd rather carry on renting and be able to afford nice holidays/trips/experiences for the next 20 years.
Property is no longer considered a 'safe' investment. I know many people who are stuck with massive mortgages on houses that have depreciated greatly in value.
The positives of renting outweigh the negatives for me. In the last year i've had a new boiler, new fire and a new washing machine at no extra cost to myself. I am soon getting new windows too, none of which i could afford if i owned the property.
Oh and i'm a 'grown up' with a business and everything.
Our next door neighbours rent. Both have been through acrimonious divorces. They rent because "if you don't own it, no one can take it away".
Gotta say that given the choice I would never rent again. I had a great landlord in my old city, but since moving to London renting's been a real pain (endless unannounced visits, keeping of deposits, landlord's mates kipping on your sofa without asking permission ...). So I'm with you, OP, if your question is more "Why would you rent IF you had any choice?"
We rented a flat which was £1200 per month because our commute was about £500 each and mortgage was £700, so it was cheaper (and nicer) to live in Canary Wharf and rent our house (and still have to subsidise it by £100) and be able to walk to work rather than commute 4 hrs each day. We could never afford to buy there tho. Also prices are prohibitive - 75k income and 50k deposit and only able to get 350k mortgage - Which doesn't touch the sides where DH works.
Also had a flat on the market for 3yrs. it's on for 20k less than paid for it but we can't afford to go any lower.
We choose to rent, as we are only temporarily in London. But even if we weren't, the financials don't make sense to us:
To buy the house we rent, it would be (conservatively) £3,000pm in interest for the mortgage - this is dead money, it doesn't pay off the loan, just the interest only payment to the bank's coffers. We pay far less than this per month in rental, with no risk of interest rate rises pinning us to the wall (at 12% interest rate it would be £12,500pm in interest only payments).
If the property skyrockets, perhaps (and big perhaps) we've missed some opportunity for capital growth, but realistically the potential for this place is small (worst house on best street, so will sell for block value only).
Plus, when we move the hassle factor is nil. And if property prices slump, stay same etc, it isn't our problem.
i really, really hate this snobbery and judginess around renting, i see it all the time, from my family, friends, in the media, on here
i rent, because i was too young to buy the last time houses were a realistic price (ie pre late 90's)
and the only way i would ever buy now is if property prices fell to an affordable, realistic level, (ie 3x average salary again), or if i won a shit load of money to buy a place outright.
lots of people just want an affordable home, not a fucking "investment" ...makes my blood boil
(endless unannounced visits, keeping of deposits, landlord's mates kipping on your sofa without asking permission ...).
why on earth were you letting LL mates into the house?
We choose to rent because when we moved to Ireland in 2003 we thought houses were wayyyyyy over priced. We were offered a mortgage for 475k, we said no, we could only afford 320k, which at the time bought a very average 3 bed semi d. We were right not to buy, the market here has crashed by almost 60%, and we would now be in over 100k negative equity.Instead we our taking the cash we saved renting (our rent was 900pm, mortgage would have been 1500 plus pm for a similar house., and getting the hell out of this bankrupt country. Sadly most of our friends and family cannot, as they can't sell their homes for anything like what they paid for them. So, everyone is now telling us how lucky we are to be renting and free, after looking down their noses at us poor renters (and boy did some of them sneer, they are the ones now up to their eyes in buy to lets on 100% mortgages). So, yay for renting and freedom!
For me, buying was the 'ideal' choice because at some point (hopefully in 16 years) I won't have a mortgage to pay whereas if I rent I will be paying rent until the day I die.
I don't plan on working until I die (though I'm sure the government have other ideas!) and, I'm asking out of genuine curiosity, how do those of you choose to rent rather than buy, plan to pay your rent when you're retired?
Its a shame when people who could afford to become home owners drift through life and stay rent-forever losers. Sad for them and their children.
"rent-forever losers"... yup, that makes me feel so much better!
"and stay rent-forever losers"
wtf? How can you suggest someone who rents is a 'loser'?
Most people who own now only do as they were the right age when mortgages for cheap housing was being handed out like sweets. The rest are in the shit as much as people who rent.
Parents being "rent-forever losers" is sad for their children?
Well, I pity yours having a parent with an attitude like that. It must be awful having zero empathy.
That is a bit greedy actually. You obviously feel that SOMEONE else needs to cough up for your lifestyle choices by buying your overpriced house. It's quite entitled if you ask
Not sure wtf you are on about.
Took us 10 years pre -DC to save 40 K and our 30's till we could buy a small 3 bed semi in a crappy area that has needed 14 K work needing doing - and it been basic work couldnt afford needing none.
We will make a loss that is part of the risk of owing a house - we'll lose about 30 K but we've had the stability.
If we lose anymore we can't buy the smaller house, DH work is in the south so we have no choice despite us earning more but to go smaller, that we need. We still have to put a roof over the DC heads.
We spent 10 year saving to get on the property ladder and five clinging very preciously to it.
If we cant afford to move to where DH because we lost to much on this house then we cant afford to move and will wait till something changes.
Not sure how that is asking anyone to subsidise our lifestyle its not like Im forcing people to buy from us.
I don't plan on working until I die (though I'm sure the government have other ideas!) and, I'm asking out of genuine curiosity, how do those of you choose to rent rather than buy, plan to pay your rent when you're retired?
With my pension, we won't need to rent a three bedroom when the kids leave home (and if they don't, hopefully they'll be contributing towards rental costs) so can downsize to a smaller/cheaper property.
Also we can move away from London to a cheaper area as we won't be working so won't need to be close to London.
I love the freedom of renting, but we do have a good landlady so I think that helps.
We rent through choice.
The amount we spend on rent (£1000 PCM) is less than the interest would be on a house of a similar value. So if we bought something similarly priced, the interest would be approx £1200, based on a 20% deposit. It therefore makes more financial sense to rent.
The house we live in is one that suits us now, we love it, but it is not a long-term house. In a few years we are likely to want to live somewhere else, and at that point we won't have to go through the hell of trying to sell in this market.
It had its drawbacks - I would love a little cat but we are not allowed pets - but the upsides are enormous for us at the moment.
I can't see the point of trying to buy too soon. It costs a fortune to buy, then you are paying interest, it ties up your capital and you can't move elsewhere for work easily.
If I had my time again I would not have bought when I did. It was not a wise investment. I will not be encouraging my DCs to rush into buying.
what is a rent free loser ?
fwiw I rented <whispers> from the council for nearly 18 yrs before I could afford to buy
I don't plan on working until I die (though I'm sure the government have other ideas!) and, I'm asking out of genuine curiosity, how do those of you choose to rent rather than buy, plan to pay your rent when you're retired?
It's very short sighted of the government to not get the housing/house price situation under control because the majority of people who will never be able to buy will ultimately end up claiming Housing Benefit, or whatever is in place by then.
theplodder sounds like a nice sensible person ignore the idiot.
It's very short sighted of the government to not get the housing/house price situation under control because the majority of people who will never be able to buy will ultimately end up claiming Housing Benefit
i agree, have thought this for ages.
Folkgirl I wrote to the government asking exactly that. How will I fund my retirement - no idea!!!
There answer 'we are building new houses'
No that's not really the answer is it?! What we need is attainable mortgages. There was a time it was done on affordability, how about we return to that?
Cantbelieve, was that in the recent call for submissions to the Parliamentary enquiry?
The Communities and Local Government Committee has decided to conduct an inquiry into the private rented housing sector
Unfortunately, the deadline has already gone, but it will be interesting to see it when it takes place.
People rent for loads of different reasons. Personally I can't afford to save a deposit because I have to pay rent to have somewhere to live. Would be nice if I could afford to but it's just not possible at the moment.
As for people who rent long term being called 'rent forever losers' - renting does not make anyone a loser! Everybody's circumstances are different. If you can afford to buy your own place then great but don't be so quick to label others. Even those who can afford it and chose to rent instead are not 'losers'. Each to their own!
I have enough of a deposit to buy, having just sold my house following a marriage breakdown. I am renting a large, comfortable house with amazing views for the equivalent of half my mortgage. I look on it as respite after a terrible year.
I have been a home owner for 13 years or something. I don't miss it. One day I may buy again but I am in no rush. In the meantime, I have realised liquid assets and I am free to move when I wish.
OP back again. I looked at our early mortgage payments (years ago) we were paying 12% at one point. Money is much cheaper now, 4% perhaps? So just another way in which things don't add up. Big deposit, more reasonable repayments or small/ no deposit and extortionate repayments. In the long run isn't it the same?
I rent-500pcm for a
frickin freezing one bed flat. I'm in the trap of having to pay rent and not being able to save up for a deposit for house. It's rubbish. I'm 32 now so doubt ill ever be able to buy-I've moved at least once a year since I was 18. It's quite destabilising, but plenty have it a lot worse and I am fortunate to live in a nice area and be able to keep myself warm
Interest rates are cheaper now, but houses are a lot more expensive compared to salaries now. And interest rates aren't going to stay low for ever.
I would love to buy but a mortgage on 3 times my (full time) annual salary would be £81,000 I would the need a deposit of £65,000 to buy a 3 bed house where I live (and that is a cheap house)
My rent is £595 a month so it looks like I will be renting for a while yet.
Omg 40,000 for a deposit ! Yes that's y we rent we would never be able to save that we can't even save £100 a month these days !
Haven't read all the posts, so forgive me if this is a repeat.
Who chooses to rent not buy?
Perhaps people who have the common sense to spend 5 mins weighing up what the cost of renting a property is, compared with an interest only mortgage on a similar property in the same area... and finding the former is cheaper??
Gosh, OP, foot in mouth eh?
I have a genuine question though. Long term renters and those never going to buy...how will you retire if you are still having to pay high rents? Do you have fabulous investments that are going to generate enough income to pay your rent until your 70's, 80's and beyond ?
Oops, in my anxiety to not cause offence, I overstated the "genuine" bit.
a) I can afford a much nicer house renting
b) I don't have a deposit
c) I watched my parents cripple themselve by re-mortgaging over and over afain in the 80s, then fall into negative equity
d) If my boiler breaks, its not my problem
e) I can move any time I like
f) I don't feel this "need" to own a house that actually the bank owns anyway
g) I have issues with comittment
I'd like to see a complete change in attitude about renting and suspect we are moving towards it. For too long there's been an obsession with "getting onto the property ladder" in the UK. Regardless of the practicality or affordability. Which has undoubtedly helped to create the boom and bust conditions so far as property prices are concerned
Yes I agree with the caveat that renters are given proper rights and long term contracts and rent controls are introduced. I am 33 (tomorrow!) and whilst I don't mind renting, I don't like the idea that I can be booted out of my home in a month's time (as happened when previous land lady decided to sell and then changed her mind
when no one in their right mind would buy the bodged up shiteheap for the silly money she was asking for ) or be fobbed off waiting for repairs and then a cowboy turns up and makes it worse or to be ripped offf by greedy letting agents making spurious claims on the deposit or pay spurious charges for renewing the contract, changing gas suppliers or any other damm thing the letting agent can dream up.
The private rental sector isn't set up for people to stay there long term as me and my generation will be doing. I am more than happy to keep on renting if the rental sector was properly regulated and with proper security for the renter.
Why foot in mouth? I was shocked by the level of rent demanded for a modest house. I have since been taken aback by the level of deposit required to buy.
I am ancient and out of touch.
I think those renting will struggle in retirement as you imply.
But are you genuine AF? Genuinely?
it is a valid question though, no ?
I'm a grown-up (marginally) & I rent for a number of reasons. I sold a property two years ago overseas (hadn't lived there for five years though) & was happy in my rented house at the time.
Subsequently have moved from that rented house to another one where we're also very happy. I love the flexibility of renting, I like the fact I have options in my life, the fact I could move to another country at the drop of a hat without a major headache.
I like the fact I don't have to worry about my roof or my boiler. I actually quite enjoy moving & living in different houses.
I keep my eye on the market but haven't seen anything I'm mad about & won't buy until I will.
Anyway - most people don't own their houses - the bank does, & even if you've paid of your mortgage - you'll die one day - the house will still be there. The last house I rented was 700 years old, we were all just passing through.
Plus - the money I save on my mortgage I invest elsewhere, so swings & roundabouts there really.
Finally DH & I are in the process of starting a new business - I like the fact it's not dependent upon where we live, if we need to relocate or downsize - we can.
Enough reasons OP?
FWIW it's a five bed-roomed farmhouse & costs 1200 a month so we fit your 'you're a fuckwit' criteria quite well.
Oh & forgot to say - I might never buy again - have you seen the properties the National Trust rent on a life-time tenancy?
If I could get me one of those...
cba with the faff of saving a deposit and then having to then pay the mortgage on top every month. I have exactly the same end result - somewhere to live, but without having to fork out 40 odd K for a deposit.
Plus my landlord fixes everything and buys me biscuits at christmas
OP here. Well, I only asked. I wonder if you've read the whole thread?
lots of people in mainland Europe.
two sets of my tenants; plenty of cash but preferred to rent my house at roughly half what the mortgage repayments would have been. That was the going rate, fair enough, all parties content.
it isn't really a sign of insanity.
Anyway, I'm an hour ahead of you here so need to go to bed. Night all. PS I've never used the term fuckwit, ever.
Boo: I had no choice whether to let them in or not. The landlord gave them his keys; I would come home from work to find strangers in my (rented) flat.
I moved out pretty bloody quick, naturally.
I am renting and have a mortgage on another property which I own (along with the bank!) in a different area.
Reasons for renting? DP and I are renting the home we live in - just recently moved in together (after 3 years) and as both have divorces behind us, we are not committing to buy anywhere just yet. Also the area we have moved to has really great state schools so this was a factor in the move. We could not afford to buy here without my house selling. Landlord family has moved abroad for 5 years so we hopefully have some stability if we want to stay here.
Also, where I own my house, properties are taking ages to sell - they are all 4 bed family homes and people just cannot sell their smaller homes to move into them in our area (lots of negative equity on 5/6 year old starter homes and flats).
Fortunately I have managed to rent out the house I own/mortgage. My tenants have relocated from working overseas and are renting whilst they decide where to retire to.
I am hoping to sell my home in a couple of years but may then buy a property to rent out in an area of the city which has a lot of mobile professionals/students whilst still renting ourselves. Having been through a nasty divorce, I'm not convinced I want to tie up my assets with someone else again. Also - the property I intend to buy would then be sold to fund a new place for me to live in retirement or I may just keep it for the income and rent somewhere...Fortunately I have managed to keep pension contributions going and am very fortunate to be in a final salary scheme so looking to that to fund non-housing costs in retirement.
We're in our mid 40's and own a house because my (now) husband bought one on his mid 20's. It would be much more expensive for us to rent, our costs would double to rent somewhere of the same size in the same area. Our house probably didn't cost much more than many deposits for a 3 bed house today. I can see why renting is the only choice for many people.
If renting was the same, or, cheaper, than our mortgage part of me would love to rent. It'd be great to only give notice, pay removal costs and you're in another house, in another place. It would be great to not be responsible for the bricks, roof, plumbing, wiring ....
Final salary scheme ?
good luck with that one
I'm astonished by the frankly stupid questions the OP is asking. Do you never watch the news, read the papers, talk to anyone under the age of 50? Show any interest in the economy?
Hobble off indeed.
fucking hell cally that is mad! i would have had them arrested!
No Fluff, I have to 'fess up & say I haven't. In the interests of parity I will give it a quick scan, my original post still stands though, for all the reasons mentioned. I may recant the 'fuckwit' bit.
Justreadthefuckingwords we got one - they are listed on the website!!
I'm in the loser fuckwit category - Oh dear I feel so bad paying £1300 for the most stunning property, views across a valley, lovely landlord, amazing area and location - We are the happiest couple I know sick inducing laid back no House stress about what kitchen to buy next we work our bums off for the lifestyle we have, could we afford to buy a house like this NO! can we afford to live in it now -YES
I like a poster earlier up said we are just passing through this life, houses are just that until you make them a home, we have rented for 10 years, we can afford to buy something and when we have the need or desire to get involved with mortgages, banks and all that crap we will, but for now I'll pop my feet up next to the log fire.
This nation is obsessed with houses, and I for one can't wait for the market to go tits up so there.
AF - its a public sector scheme one of the UK's largest
yes, I have one of those too, meikyo
But I won't have by the time I retire
...and if this latest bunch of dipshits gets another term
AnyFucker in answer to your question I think people in rented are much more savvy and do plan for that being a possibility - We have a large pension pot and pay 15% of DH salary into it - We have other investments that are secure and some high risk investments.
We do think that property is a good long term investment, but not at current inflated prices, so will buy something at some point in the future but my stay in our rented place.
I really think people who own just assume that they will be able to downsize and make cash for retirement? but what if your retirement clashes with a downturn and you can't sell? What is like many of our friends who talk about downsize live in 3 beds? I mean what are they going to downsize too?
goingup, i applaud your forward planning
I have to admit, I know some people who are not doing the same and I have concerns for them
what the hell will happen when they stop working?
the state pension won't pay their rent
fwiw, we have paid our pension off but don't look at our house as something to sell to release money
it is a family home
not paying mortgage or rent though is pretty good ...and makes retirement a more realistic proposition for the middle future
Our mortgage is £450 a month. Rent would be about £500, so not much of a saving. Especially when you consider we paid and had fitted the central heating, the new windows, guttering, kitchen and bathroom.
I like our house and where we live but I wish we had waited.
I don't think a lot of people now get an option do they .
AnyFucker My parents are them, they have a pot of cash that is running out, and they rent and they are retired, they plan was the interest on the pot of money would pay the rent - but 5 years and interest rates low on the pot is now being used for rent - they are buggered, as the money isn't enough to buy a house.
I asked what are they going to do and the answer was wait till the money runs out and then ask for help, so I have visions of my folks being in a council retirement place (if they exist?) who know what the future holds for them - or other renters who don't have a plan b.
I don't understand why people would pay £1,500 a month in rent. I saw somebody on TV saying that was their rent and they couldn't afford to buy. But I see why people would pay £600 a month rent as they probably think house prices will come down. That probably doesn't sound logical. Somebody told me there are ways round the deposit. Like borrowing the deposit. Perhaps this isn't a good idea but I think it does go on.
goingup and I completely sympathise, am not havign a dig
some of my friends/family are in this predicament
they have some investments/savings which years ago they thought would fund their retirement
but for a long time now, returns have been so abysmal...the money is running out...for rent (and what next...for food?)
I would be shitting myself, seriously
I don't know what the answer is, of course
I think people pay that much in rent because that's what the rental price is where they live, vivienne. If you have a good job, you probably can't risk walking away from that, which is what ties people to the areas of the country where you can't get a family home for 600 a month.
No choice here!
We rent because we would need at least 15% deposit in order to get a mortgage we could afford. In our area, for a similar house we currently rent, we would need about £30k which is our entire income (gross) for a year...there is no hope for us but we actually have great landlords who fix things within days and it doesn't cost us anything!
There are pros and cons to both situations but I think the reality is an increasing number of people don't have a choice.
Its fine if you get a good landlord. I can't afford to rent or buy so at the age of 27 I am still living with my parents. If I was in the position I would buy.
The rent on my house is less than the mortgage would be on it.
Also what people NEVER consider is the cost owning a house (eg repairs plus insurance). I pay nothing for repairs or insurance. I have rented for all my life. I have never ever decorated a house. I dont know how to piaint a house or put wallpaper up.
The truth is that unless house prices are rising, then renting is cheaper than a mortgage. My landlord has spent every penny of my rent and more on paying the mortgage and keeping my house repaired.
anyFucker it's OK I know you weren't digging! i know your sound
I'm thinking DH and I will have to bail out my folks at some point which is why I don't want to tie our money into a house, I would never tell them that but I wish I had a crystal ball, and that interest rates would go back to normal before our country goes broke.
You're...sound.. not your.
Else I'll have the grammar police on me
think about it vivienne. if someone is paying £1500pcm in rent every month (plus their living expenses) how do you expect they save a deposit? and taking a loan to put money down so that you can take a bigger loan when you can't even afford to save the amount of the first loan is mad! why on earth would anyone be desperate to be in that much debt and have their home secured against it? i know people have done it but i really do think it's incredibly risky.
I rent through choice. My rent is £500 a month - fab location with fantastic schools (In London) I have no idea how much a mortgage would be for a £250,000-£350,000 house in the same area but I would guess a lot more
My brother chooses to rent
He could afford a mortgage, has the deposit but prefers to rent so he has no surprise bills for property repairs, can move easily if he doesn't like the neighbours or if he changed jobs etc, he is single with no children so has no ties and no one to leave a house to so why should he?
Sound as a (devalued) pound
Yep, we need some interest rate rises, pronto. Why won't the Fucking Government do it ? I don't understand. I have never been richer than when I was paying 13% mortgage rate in 1991.
I say that with almost zero knowledge of economics, btw
House prices need to come down. How can they be sustained at this rate. I certainly wouldn't understand how anyone can pay £1,500 rent and save or even pay £1,500 rent. Wages aren't rising for most people and the cost of living as everyone knows is going up and up. So something will have to give.
Goingup brilliant, I know, I look all the time - never any in our area though.
& I agree with you & AF - a house is a home, it's not an investment unless you sell it - NEVER see your home as an investment. Where are you going to live if you need to release funds?
Either in 'your' home with a higher mortgage, or somewhere else.
Viviennemary fingers crossed, that way we can go back to people having a choice over going back to work after children, rather than being slaves to mortgages and rent.
What I'm trying to say is, your home should not be seen as an investment, which, in the years between 1998 & 2007 it was. Not only that, it was seen as a cash-cow, to milk, if you wanted holidays & cars & all the lovely stuff.
It's not real though.
None of it's real.
Your home, is, your home, whether bought or rented. The house I live in now, has been owned by the farmer's family since it was built about 300 years ago, he has no children, I guess it will go to his various nieces when he dies, they'll probably sell it.
What actually is ownership? What does it mean?
I pay more than £1200 a month rent. I also have a flat that I rent out pays the mortgage, ground rent and insurance very little left over
i am happy renting love my flat we are in any problems I call my landlord. My mortgage one day will be paid off but it often seems more hassle than it is worth I nearly lost it a few years ago after i was made redundant and then became ill luckily I did not but hanging on to it because cause selling it I would not get my deposit back but I not bothered about owning a property because I don't or only very little of it
I rent because the only property you can find that is built for someone with mobility needs are social housing and because it is specifically for someone with those needs I don't have the right to buy.
I've also moved quite suddenly in the past and it is so much easier to give notice to a landlord than sell a house.
Because we don't know how long we'll be in this city / country before suddenly needing to move another 3000 miles to another one and don't want an empty unsold property sitting on the other side of the continent, draining our resources. That's a good enough reason for me, anyway. And I've owned 7 properties in the past. Renting you don't have to pay for things to be fixed up and you can leave at a month's notice (or whatever you've agreed). There are freedoms attached to renting, and freedoms from further costs.
It's a totally valid question AF
I really think I might be royally fucked come retirement
I just sort of stay optimisitc that something will happen
I earn good money, but DH doesn't work and my credit rating isn't perfect
My rent is high and so are my childcare bills and other living costs
At the moment I can't envisage getting onto the property ladder unless I get a chunk of capital from somewhere and lenders relax the criteria a bit
Your DH doesn't work but you have high childcare costs ?
I don't understand
Maybe they don't have or can't manage to save £60-£110K for a deposit is why duh.
We rent because we can't afford to buy.
I rent because having a disabled child means I can't work. I am fortunate enough to have a HA home and there is no right to buy with it anyway. A least DS has a place to call home for as LNG as he needs it though.
'Long term renters and those never going to buy...how will you retire if you are still having to pay high rents? Do you have fabulous investments that are going to generate enough income to pay your rent until your 70's, 80's and beyond ?
Genuine question. '
Retire?! LOL! There are still people under 60 who are not filthy rich who think they're going to retire and sit around playing golf?
I love how we are expected to invest in our retirement do people think that everybody has the means to stash large amounts of money away some people can't/don't live like that
We rent at present. We looked into buying a flat in our same building, exactly the same size, though "two bedrooms" rather than one.
If we went for a mortgage where you also pay back the capital, it would be around twice our current monthly rent (with all our savings going into the deposit). + annual services charges worth thousands. If we went for an interest only mortgage it would be cheaper (but then you don't pay back the principal) it was around half more expensive than our current rent.
After much consideration, we thought it was a stupid idea so we're still renting.
Surprise! Surprise! Expectation of triple-dip recession to be announced today. Yet we're supposed to be fronting huge deposits and saving for this myth that is now known as retirement.
30-40 somethings: unless you are very rich, you will never be able to 'retire' the way our parents did. You will need to sell your home, if you have one, to pay for care you need if not you are headed for almshouse or worse, your children, unless they are or become quite well-off, will likely have to rent your mates' BTL properties forever. Get a reality check!
I know!! Expat, that's what I am saying. Bloody scary stuff. I think there are going to be more cases of people dropping dead at work over the next couple of decades!
DS is at nursery 2 days a week AF which is nearly £500 per month
Yep...Gideon has really fucked up hasn't he? Loads of economists have been saying for ages that austerity measures wouldn't work and would make things worse.
Am glad I no longer own a home to be honest.
AF it is getting that way Mydad is past retiring age but still working night shift in a factory mums missed the retiring age so she can't till next year but probably won't unless her work insist but she will find something part time, people are going to be leaving work 1 day and falling down the next
we rent at the moment,we pay 1300 a month for a 4 bed detatched house in a nice part of sussex.
my husband owns a large business and if anything happened and things went wrong they would be able to take our house of us if we had a mortgage.
(not really a issue aymore as its gone past the point where things could go wrong really,but originally was one of the reasons.
I dont like the idea of moving somewhere ad the 6 months in realising you hate it and not being able to afford to move or not being able to find anyone that wants to buy your house.
We will buy a house outright when dh sells the business or when we have enough saved?(if we still lived up north where im from we could buy a house outright now but prices here are high for what we would want)
the only thing i dislike about renting is not being able to change things and livig with someone elses taste,but luckily the house we live in at the moment is neutral and light and airy which is what i like anyway.
We chose to buy. Our friends (similar income) chose to rent.
They chose to rent because they wanted a bigger flat and weren't sure they'd be staying in this city for ever (they were right - they recently moved to New York )
We chose to buy for the investment (as well as wanting our own place). The interest we paid on the mortgage was less per month than the people before us had been paying in rent.
So yes our monthly payments were higher, but part of those payments was capital, which we got back (with extra) when we sold.
And it meant that we could buy our next, bigger flat.
I have never been in a position to buy. In all honesty though, unless I had a shit load of money I wouldn't. Renting has meant that I have been able to live in areas and properties I would never be able to afford if buying. I really don't understand the obsession with owning your own home.
Thankfully I have a bloody lovely letting agent, who pretty much lets me do what I like to my house with regards to decorating. I have however had some utter bastard landlords/agents in the past. A good friend of mine who rents has to have 3 monthly checks from the agents, and is not allowed to put anything up on the walls. I would hate that. I wish the UK was more like the rest of Europe with regards to renting. We need more caps on rents and control over rogue landlords.
i pay £650 per mth rent for a family home, which is apparently less than the landlord pays for the mortgage on it. People who i know who have bought their own homes have been lucky enough to have well-off family members who have chipped in for the deposit, not an option for me. Also, as many have said you are not responsible for the repairs and maintenence, on a low income you just haven't got the money for this. When you 'buy' aswell, the house does not really belong to you until the mortgage is paid off, it belongs to the bank, if you fall ill or cannot keep up repayments, you can lose your home. At least with renting, if the worst happens and you lose your job, housing benefit can help with your rent.
Catgirl why is your DS in nursery 2 x a week when your DH doesn't work?
Also, we're planning on moving, and spaffing away all our savings on a deposit, fees etc. on a flat which theoretically we could rent out (though the market rents are below the mortgage payments, so I don't know how that would work) seems silly. And we live in London - housing pretty much anywhere else in the world is going to be cheaper to buy, so saving that money could be going towards a mortgage here towards a deposit somewhere else is a much better idea. For e.g., one place we're looking to move to we would be able to get a decent house, decent number of bedrooms and great location with a tiny mortgage to be paid off in about 5 years.
We're saving for a deposit, but its difficult when rent is £650/month - going to take us at least 5 years I think.
Even I had the deposit right now though I probably wouldn't buy because I don't think I'm settled in the town I'm in - plan to move in the next few years.
Once both of these issues are sorted (!) then we'll buy!
Lady a few reasons, but the main 3 would be
DH is looking for work and plans to return to work at some point
DH has occasional freelance work
I believe nursery is good for DS in terms of socialsing with other children, variety of activities they do etc
DS is 14 months now and has been going to nursery from 5 months, when I returned to work full time
He is also with my DM 1 day a week. I work from home 1 day a week and DH has sole care of him 1 day a week
I rent, but it's a secure council tenancy so the rent is far lower than a mortgage on the equivalent property in this area. I am in a position to buy it now, and it's something I thought about as the discounts under right to buy are quite generous now, but I've decided against it. It's a flat, not a house, so I'd still have to pay service charges, so there would still be ongoing costs even when a mortgage is paid off. And of course I currently have no ongoing costs of ownership, like repairs or home maintenance.
I don't have most of the disadvantages of renting, because of the secure tenancy - no danger of the landlord needing their property back, not being able to decorate, or having my home inspected. I have had to claim housing benefit at various times in the past, which wouldn't have been possible with a mortgage. It is a bit harder to move house compared to a private rental though, although there are schemes and I know people who have managed to move to new areas through housing swaps.
An elderly neighbour who bought under the right to buy has just had to sell her home, because she is going into a care home. So there is not even any guarantee that it would be an investment for my children.
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