to not give a toss about getting on the <boak> property ladder?

[Headbanger]

Oooo, my first AIBU

The Old Man and I were brought up, like most Brits I guess, to believe that renting was the preserve of the flighty and irresponsible and ill-advised, and that the only sensible thing to do was to buy your own home.

You know where this is going (no points for originality here): we are professionals, married 10 years, hoping to start a family, but cursed with being Londoners, and of the generation that began being gently and discreetly screwed into student debt by the Government and then being savagely shafted thereafter.

We have a respectable income, but it is so eaten up by debts and the cost of London living that we are focusing all our efforts on paying the debts off, and there is little left over.

There is no hope of us ever buying our own property: our jobs are public sector and/or the arts, and we would need to save a deposit of around £40k, and get a mortgage of something like 8 times our combined income. We're from unwealthy backgrounds, and there will be no bequests or lump sums appearing on the horizon.

Of course we could leave our hometown, but kindly do not suggest this because I don't see why we bloody should: our families are Londoners for generations, we know its very stones, all our friends are here, etc.

So (get on with it woman): AIBU to ignore all this guff about home-owning being the be-all and end-all, and be quite content renting? Our monthly rent is less than a mortgage payment would be; someone else pays for the plumbing; a nice couple come and mow the lawns; if it all goes bent, or all goes better, we can up sticks in a month.

And I'm talking planning on renting long-term here - ten, fifteen years, with (hopefully) children, and all that that entails. Maybe forever, unless one of us gets that pesky half-million book deal.

Is this irresponsible? Should we eat spaghetti hoops on toast (erm, even more than currently )and go live in Zone 72 or parts of the country we know nothing about, and where our friends are hundreds of miles away, just to say 'Oh yes, we own our own home you know'?

Do any other MN'ers rent from choice? Are you happy with it? AYBU?!

Most importantly, do you think there will be a cultural change, and people will care less about that holy grail of the mortgage, and tenants will (like Germany f'rinstance) get lovely long-term leases, with security and permission to paint over the sodding magnolia paint?

I thank you.

Fairy, I am. Sigh. And they're reading a lot like, 'I don't mean you, but them.'

Well, frankly, like SanctiMoan often says, 'I'm one of 'them''.

I doubt that the average pension is sufficient to cover living costs as well as housing costs.

State pension definitely not. Private sector pensions, you'd have to pay so much in you might as well pay into a mortgage. Maybe a gold plated civil service pension, but that might soon be seriously eroded.

Hence, it is still better (if one can afford it) to own a property that is paid off ahead of retirement.

Well quite blueshoes, I do appreciate that for some renting is the only option but renting as a choice if the means to buy are at your disposal is slightly baffling to me.

Expat, on your first point, house price inflation over the decade is a huge multiple of the savings rate.

At retirement this person might be able to afford a bedsit, but if they invested in a property to begin with, they would be retiring in a mansion.

Obviously I am only referring to people who can save at all but choose to rent.

Well, I have clearly said that I am talking about the people who CAN afford to buy or at least will be able to afford to buy in the future. I am aware now is not a good time, but we are talking long-term aspirations, right? You have clearly said you don't think you will ever be in the position to buy and I do understand that is the reality for a lot of people. Renting is not something I will ever encourage my children to do and in fact I am saving up now to give them the deposits they will need to buy their first flats.

You're assuming it will always increase, blue. For all we know, the world may be a very different place in 40 or 50 years.

Secondly, what in God's name would one person, or two, for that matter, want with a mansion?

Yeah, yeah, you can sell it off, leave it to your kids, blah blah blah.

But maybe some people don't desire that in life. Maybe some would rather enjoy life now, save up, and go for the bedsit.

Or top themselves.

Or retire to some S. American country where properties are dirt cheap and what buys a bedsit here buys a decent flat or house there.

'Renting is not something I will ever encourage my children to do and in fact I am saving up now to give them the deposits they will need to buy their first flats.'

Good for them! Bully for 80% of everyone else then.

You do realise how incredibly smug you are coming across, don't you?

One lives in hope.

I'm encouraging mine to leave the country as soon as they can. Too many people with attitudes like yours in here.

I'd go myself, but financially it's not viable with a family in tow, so I'm encouraging them to fly the coup when they are on their own and have only themselves to worry about and youth on their side.

I'm teaching them to be as independent as possible because Mummy and Daddy won't always be there to bail them out.

Yes, expat, those are all possibilities and options.

Just hedging, as they say.

One of the problems we have in this country is that the older generation are NOT moving out of the family home when the children have left. This means that lots of younger people cant buy a house even if they really wanted too!

Why are the English so obsessed with proprty. Has the past two years not taught you anything? Owning property has destroyed people. People who desparately wanted to belong to the I own my home club!

If we had a better relationship with property then we would have the problem of old people refusing to sell up to pay for nursing care. Believing the state should pay for it?

Fairy/blueshoes/nom could you all honestly say that when your children are grown and left home you will sell and downsize? Or if you need to be placed in nursing care you would be happy to sell your house to do so?
I suspect not. Who will be paying for you?

Ronshar, right now I am just working towards the position that when dh and I are retired and the children have left the home, we have the option of selling and downsizing and/or selling our home to pay for (nicer) care in old age.

Ruined by spelling mistakes
I obviously meant We would'nt have old people.

'Has the past two years not taught you anything? Owning property has destroyed people. People who desparately wanted to belong to the I own my home club!'

Exactly! How many responses on the 'Are you secretly poor?' thread? HUNDREDS. Thousands more lurking.

People on interest-only mortgages and in arrears already. What are they going to do if inflation rises when VAT increases and the interest rate goes up? What are they going to do when they need to remortgage? When the term ends and they're due the principle as well?

So many could not genuinely afford a home, any home, but because of attitudes and tenancy laws, they took huge financial risks.

How's that all going to end?

I have a feeling care home costs are going to be the least of such peoples' worries in the near future.

Dh & I are working toward the very same thing. But we are renting!

Ronshar, yes of course I fully expect I might have to sell the house/part of the house to pay for a nursing home. Why would I not?

I'm a homeowner and a landlord, I can see it from both ends and I think whatever works for you is your business and all power to you. I do hate to see all these people struggling with massive mortgages - mine was a weight round my neck and I hated it so much. But then I hated renting too - reckon I'm just a grumpy old woman

We can discuss all night and not agree.

Headbanger. I think it comes down to you doing what you think is best for your family. Who cares what anyone else thinks.

Me too whomovedmychocolate (great name BTW). There are pros and cons to both.

Yes, and a lot of people could afford to buy a house, but bought houses they could not afford and removed equity from they houses because they thought the property prices would forever increase. A lot of people have themselves to blame. I am sure you would say that is really smug of me to say.

expat, I agree that people should not overextend themselves just to own a home. Negative equity is a very real risk as is the inability to keep up payments - those risks have been since time immemorial. Hence, not to overextend. I am very wary of a situation where people can only afford interest only mortgages.

For every person in negative equity now (bought in the last 2 years?), there must be hundreds more who are (quietly) still quids in.

In this part of London, prices really haven't fallen at all. I am actually hoping they will as looking to upgrade.

sorry. I fail to see how me not moving out of my home will cause problems for FTB ? I'd be hogging a big house which should be taken up by a family with kids, is that it ?

DH and I have been fortunate enough to make (and continue to make) investments for the furture which will hopefully take care of the elderly care side of things but tbh, yes. We are highly unlikely to still live in this house when we are at the point where one or both of us needs residential or full time nursing care. The size and layout of the house (it is over 3 floors) means it is very impractical as a twighlight years home anyway. Why wouldn't we move ?

Owning property hasn't destroyed people. There are still a HUGE majority of owner occupiers in this country who are doing fine with their borrowing - not everyone went bonkers and borrowed 15x their earnings just because the banks offered it. Greed, stupidity, bad maths and irresponsible lending meant that people overstretched themselves and it bit them on the arse. That's not home ownerships fault. That's just not thinking a huge financial decision through properly.

There are people who have lost their homes due to redundancy etc, obviously, not necessarily bad financial planning and that is crappo but the greedy "I must own my own home" brigade get no sympathy from me and I take no responsibility for their actions.

Financially, I would encourage my children to buy a home and would hope to be in a position to help them out with deposits, or at least with a portion of a deposit but I don't know if that'll be possible at this stage. DS1 is 18 and certainly we are nowhere near it for him. He'll have to rent for a few years (or forever, who knows) same as DH and I did.

'A lot of people have themselves to blame. I am sure you would say that is really smug of me to say.'

Not necessarily. Back in 2004, we were offered a mortgage for 10x our combined gross income of £20,000/annum. 100%.

At the time in Edinburgh, at the height of the boom, this would have bought a 2-bed ex-council flat in a decent catchment area.

But I knew this was foolery. So we stayed renting.

Others got on the bandwagon at whatever cost, for whatever reason.

Who knows what became of such folks.

Now, of course, the market isn't moving as well because no one is lending like this and prices haven't fallen very much.

The only time it might be worth it to borrow against your home is in the height of a boom after you bought on the cheap, to make repairs or upgrades which will increase the value of the home past the value of the loan and then sell fast.

I advised my ILs to do this on a ex-HA house they bought in the late 1980s for £17,000 and owned outright, as it was already in a poor state of repair.

They didn't.

Now they are very stuck in a house that would make Kim & Aggie run away screaming, and their failing health is making it harder and harder to manage the narrow stairs in it.

And it's not worth what it was in 2004.

Thing is, some people really did take big risks and now they are stuck.

Others are still renting.

Negative equity is not in and of itself a bad thing, either. IF you are in it for hte long haul, plan to stay put and bought sensibly to where you could always afford the repayments - capital as well.

The problem is that a) people are now conditioned to believe that they can never lose money. Even in other investment vehicles. b) some people, a not insignificant number, came to see housing in the light of a money speculation and not as the essential it is, shelter, and purchased accordingly.

So yes, some are now getting bitten in the arse by poor financial judgement.

But that doesn't apply to all homeowners any more than it applies to all who rent, for whatever reason.

A mortgage in this day and age sucks.

Gone are the days of putting down a mortgage and working till retirement to pay it off and then selling to live off the profit.

We bought in 2007, borrowed 3x our FT wages and put down a 0& deposit.

Paid the mortgage on the fixed rate dispite me falling pregnant and having to work PT (due to not being able to afford childcare costs), DH lost all overtime at work due to recession and when the fixed rate ended our building society told us that their SVR rate was still high as they hadn't moved their rates dispite the drop in intrest rates.

We can't afford to switch lender as we have had almost all our equity wiped out by the drop in prices so no one will touch us and due to loss of wages we are intrest only.

Prices are rising slightly and if we were to sell we would probably lose about £10,000 comapred to the £15,000 lost we would have lost this time last year.

We can't wait to get out and rent. I hate our neighbours and since living here I have discovered I hate other peoples noise so I want to rent somewhere away from others! Or least live next to less people than I do now - and if I do get shit neighbours at least we can move.

The only issue dh has about renting is not being stable enough for dd. I do worry about that as well tbh, constantly having to move home cant be nice for a child.

10% deposit

expat, you are right not to take on a 100% mortgage at 10x gross income. I cannot imagine the repayments would have been affordable even over the longest period of loan. Even worse if it was interest only.

Property is a bit of a hybrid beast because it is not just shelter (and everyone needs shelter), it is also a form of savings/investment - as with any investment comes an element of risk.

I agree that the last decade or so made many people forget you could lose money on property. Housing bubbles are very real. I think it is a good thing that sanity returns to the market.

Property is actually quite high risk, I feel, because of the large amounts of money involved and the holding/maintenance costs. Although as you say, if you can hold on even in the face of negative equity, you can ride out the volatility.

Hence very important not to overextend and to build some fat into the ability to repay.