Is owning a home always favourable to renting from a housing association?

[HAhome]

I can’t see any positives to it right now. To afford to buy a property big enough, we’d have to move out of our (nice, safe, community feel) neighbourhood and in to a much less convenient and rougher area.
Even doing that would incur more cost than now - we’d be paying hundreds more a month for the mortgage vs our very cheap housing association rent. We wouldn’t be able to save. I would have to take a very short maternity leave. Probably no days out or holidays.

We moved into this house when it was newly built and our circumstances have changed since. Not so much that we are high earners but we have two full time incomes that are slightly over minimum wage. We still just meet the criteria to be accepted for one of these homes but even if circumstances changed massively we could still stay here.

It’s not perfect but it’s our home, we don’t have to worry about repairs, nobody comes round to do any inspections and we have very very little to do with the housing association unless they write to us to tell us the rent is increasing slightly OR we communicate about a repair that needs doing. Other than that, we can decorate, lay new carpet, do what we want.

There is lots of societal pressure to be home owners but I can’t see how it would make a shred of sense in our current situation. I was listening to the radio the other day and someone who had paid their mortgage off in full was having their house sold to pay for their care in old age.

Is there a massive disadvantage that I’m missing?

I also cannot see how it would be preferable for you.

Housing Association no, private rent yes.
It's not rocket science.

Well not always, it depends on your finances.

but for the op as a relatively low income family then she’s sorted, it would make no sense for her.

Yes I think in some ways people who are able to stay in decent HA properties with affordable rent are the lucky ones right now.

I feel bad to think of us as low income as I imagine we earn more than some. Were both on starter nurse type wages

Maybe not for you, but you've got nothing to leave your kids if you don't buy

Also, no guarantees that HA rent won't go up in future

Of course, plenty of people will be on less. It’s not a criticism. You asked if it was always preferable and outlined your circumstances and the truth is it would not be preferable for you. You have a secure home, that’s affordable. It’s good.

I was fortunate enough to be able to buy my HA home under the right to acquire scheme. Mortgage and rent were more or less the same per month. I know some people don’t agree with it, but there was no way I would have been able to buy otherwise. I also don’t plan on moving out of it anytime soon.

For me the big things of wanting to own was the security of not being evicted (I was private renting), more control of payment (ie fixed term mortgage Vs landlord deciding to change the rent by 15%+ on a whim one day) and not having housing costs in retirement.

For you it sounds the first ones are irrelevant, as you have a secure tenancy, and rent reviews seem consistent and reasonable. The latter, probably depends on your retirement planning - but not an immediate concern anyway for you.

In terms of selling the house for care, well yes. But Vs renting, you'd still loose your tenancy anyway, but whilst paying for your own care from the proceeds of your house sale you have much greater choice on where you end up.

Pros to staying put:
If you own your own property you need to factor in the cost of any repairs required - these can be really substantial if for eg a new roof is needed, but even smaller things can add up. And as we’ve seen recently mortgages aren’t fixed forever.
Plus the obvious of a secure tenure etc

Cons:
Need to fund rent in retirement
Less to leave the kids or provide care home choice should that be needed

In your circumstances I’d probably stay put but try to build up some savings as something to leave the kids/pay for care.

I wanted to own because it means I have more choice about where I live, if I take a job in another part of the country or world even, I can sell up and move on, I can buy elsewhere or rent out my home. Not easy to do that with an HA tenancy and private rental is like swimming in a shark tank with less stability.

Property in the UK always gains long term, an appreciating asset isn't easy to come by. Having a substantial asset also means I will be able to influence the nature and level of care I can fund in my old age if I need it and if there's anything left or will help DS.

I came from a very poor upbringing so that level of stability and choice is important to me.

I also prefer to own because the waiting list for HA where I live is ten years plus and the properties are not usually nice or in good areas, I would not qualify for any type of priority to speed it up and private rent costs more than my mortgage. Of course there are downsides to ownership, maintenance, servicing, building work, renovation etc all come at a cost

The state pension doesn't currently factor in ongoing rent costs in retirement. A family member of ours really struggles despite living in an HA home because his pension needs to cover his rent.

Pensioners claim housing benefit if they can't pay their rent. if they get even one pound of guaranteed pension credit they get all their rent paid !

With luck your mortgage, usually 25 years unless it’s changed from when we had one, will be paid off long before retirement. We lived in our first house for twelve years, moved to our current ideal “ forever” home( an old farmhouse we did up ourselves over the years) & by our mid fifties had paid off the mortgage. So now that we’re retired our only house outgoings are the usual council tax, utilities, insurance etc that people in rented property I would think have to pay along with still paying rent. Also means if we have the freedom that should we decide to move we can sell up & be cash buyers for somewhere that isn’t more expensive.

Yes You get to choose which companies and contractors will do work in your home and you dont have to let dodgy contractors in like HA tenants have to.

It sounds like it would be better to stay renting in your situation. There might be some advantage in being able to climb the housing ladder (you could end up in a nicer property in the end even if the first property you get isn't as nice as your HA house). At retirement there's an advantage in owning your own property, but that has to be balanced out by any support you could get with renting (like people on pension credit get housing benefit) and the costs of ownership.

It would be a different situation if it were a council tenancy. I bought my council flat under rtb and that was a good deal for me, as the discount was over £100k and I could sell it in a few years and have more choice over where to live, plus I have an asset to pass on to dcs. Psychologically it feels more secure too. But the HA discount isn't as high as rtb. I suppose you could consider getting a homeswap from a HA to council flat with a view to using rtb, but that might mean moving to a different area, so many places only have HA properties now.

They’ve never been dodgy, and it’s rare we need anything with the house

You do know properties need maintenance right? There are no magic properties that will rarely need anything done.

I'd look to buy eventually, but not right now in your shoes. Maybe use the HA property while mat leave etc are considerations but use the low rent to save your deposit.

Who wants to be renting in retirement?!!

I used to rent from both housing association and then council

Tbh it was great in some ways as the rent was affordable (I don't want to say cheap, because I don't think it's cheap, it's simply seems cheap in comparison to the rip off which is private rent)

And also we had security of tenure, both tenancies were assured and rents only rose a tiny fraction annually

However we got a bit nervous about ten years ago when I feel like politics, the media and general public seemed to turn against Ha / council tenants. The bedroom tax came in and they started saying that tenancies shouldn't be long term and that people ought to be kicked out for earning too much. So we did then buy a house as we knew we wanted to further our careers and earn more and did not want to be at the mercy of potential government policies making our home insecure. This is ironic really as our mortgage is soon going up substantially thanks to the bloody shitty government - so it doesn't give as much control as I once imagined, but at least we will still be paying for our own home which we will eventually own outright.

That said though, I feel strongly that everyone should have a secure and affordable home, whether they rent or buy, so I would not blame you for staying where you are.

In the short term it seems to benefit you to stay put.

But there are 3 long term disadvantages

1. pension
   If you have a small work pension it will be swallowed up by rent. The state pension was designed for homeowners who would have no housing costs by retirement. So you either need a HUGE private pension or you will be living off benefits in your old age.

2. no inheritance to give DCs so highly unlikely they will have a deposit from you to get on the property ladder themselves which may leave them stuck in a lifetime of private rent- check if you can give them your tenancy once you die/ don't need it.

3. care home- if you are paying for care yourself from your house sale you can choose what home you go to and pay for a nicer more expensive one. If the council is funding you they will dump you in the cheapest place they can get away with!

For me, it's security. Not having a landlord coming round whenever they feel like it (think your situation is more positive there). The rent next door is more than double my mortgage (again yours is positive). My mortgage is paid in a total of 25 years, rent is for life - will you afford it when you retire? Do you care about things like new kitchens, that you have more control over when you own?

Pensioners claim housing benefit if they can't pay their rent. if they get even one pound of guaranteed pension credit they get all their rent paid !

Pension credit is being phased out the same as tax credits. It'll be UC, which isn't so favourable.

Depends on individual circumstances. Some people pay their mortgages off in their 40’s or 50’s . So they have that extra disposable income for years whilst still working. Would retiring early be feasible for someone who still has rent to pay? Plus when you do retire, not all pensioners get rent paid for in full.

Where did you hear about plans to phase out pension credit? This isn't true. UC is a working age benefit. Of course no one can predict what the benefit system will be like should the op need assistance with rent in retirement, which sounds like a way off.