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.

Housing Benefit only pays rent, not mortgage payments. HB can be paid to low-earners whether in or out of work.

In contract, there is a system whereby households who are dependent on income support or income-based JSA can (after 13 weeks) claim mortgage interest payments, up to a limited loan amount and limited interest rate. This is only available to households where no-one works so doesn't help low-earning workers.

Therefore the system punishes homeowners who have a drop (but not total loss) of income much more than tenants.

'Therefore the system punishes homeowners who have a drop (but not total loss) of income much more than tenants.'

It is not a punishment, because in theory they have something to sell that tenants do not. They may also have an asset in the home, which tenants do not, in the form of equity.

This is effectively subsidising one person to maintain an asset which will, if long-term forecasts hold true, appreciate.

A tenant has no such asset.

You can't feed your DCs bricks for dinner.

Well, obviously not, but a homeowner may be able to release equity.

A tenant has no chance of this.

A tenant is also, as has been pointed out, subject to very short notice to move and assorted expenses.

There is no end of mortgage, have asset, no shelter costs for the tenant, either.

Not all homeowners have underage children, either, or even children at all.

Also, a homeowner can take out mortgage protection insurance.

There is no insurance to pay for the tenant whose landlord gives them notice to quit's moving costs.

Someone on HB can have up to £16k in cash. It's a lot easier and quicker to use this than to sell a property, especially in a slumped market. And not all homeowners have any equity.

The costs of moving are much higher for homeowners then tenants.

"a homeowner can take out mortgage protection insurance." - not if they are self employed or on a short-term contract. Even then it will only pay out for 1 year. And these insurances only cover specific circumstances. eg they wont cover maternity leave.

If benefits only pay the interest then the homeowner dependent on this wont have an asset at the end either.

Then perhaps it's not a good idea to lull such people into a sense of false security by paying out such interest payments on mortgages.

Perhaps a better way might be for councils to purchase such properties about to be repossesed with the proviso the former owner can stay on as tenant.

Coming to this thread late, but totally agree with those who point out that, OP, while the short-term benefits of renting (eg flexibility) may appeal, of course it has no long-term security.

You are simply putting money into someone else's pocket. Not the same thing at all as paying money to a bank. A repayment mortgage means each month's payment pays more towards you owning more capital in your property. At the end of the mortgage you own your house. At the end of a rental period you leave with nothing. And it is a pretty safe bet that over time any property will be worth a hell of a lot more than what you paid for it - whether you bought it in 1995 or 2015.

If you want to up sticks quickly and live elsewhere you can always rent your house out too.

Also, it's a shabby argument about having to sell it when you get old/ill/have to go to a nursing home. This does not have to be the case - renting the house/pensions/other savings can cover this. And generally care homes (rather than actual nursing homes which provide medical help rather than simply housing/food) are not normally more than £400 per week (not the £800 mentioned earlier). My late MIL was in one for several years, and her house was rented out to pay for the cost, along with pension/savings. When she died DH inherited the house, which he owns outright.

Totally your choice of course if you a) perceive there is a stigma about renting (I've never noticed this in my life), b) would rather rent forever than move beyond zone 2, or even (shudder) outside London. But you asked for opinions, and in mine, you're being rather stubborn and foolish.

A homeowner also has the option to let out their home.

A tenant cannot usually sublet.

Homeowners have choices tenants do not have and, again, given the performance of property over the past 30 years, an asset a tenant does not.

'rather than a house of a family who is going abroad for work' - we have let our house out whilst we are abroad; the tenants have been in for 3 years now, and can remain for another 3, as I know roughly when we are due to move back. However, much as I'd like to pin them down to a long term contract, the Letting Agent doesn't advise it, as the lady isn't well, and they may eventually find the house too big for her to manage if she gets worse.

If we were moved back before that, I'd happily live in an MQ wherever dh was sent, so the tenants could remain in the house.

B&B, thank you for contributing, but I take exception to being called 'stubborn and foolish'.

As I have gone to some pains to point out, owning our own home - for the forseeable few years, at least: alas, I do not at present own a crystal ball - would mean curtailing the patient paying-off of student debts in order to save for a deposit; adding to those debts monumentally, borrowing many times our combined income; and moving not just away from London but in all probability out of the SE. We would find ourselves paying far greater monthly payments, still up to our knees in debt, away from family and friends and anything we know and recognise.

My post was intended in part to seek reassurance that in renting we are not be quite so foolhardy as some would have us believe (for years we were repeatedly urged to do 'all we could' to get 'on the ladder', including taking out 110% mortgages on interest-only plans which by now would've expired, probably taking monthly repayments up by another 30 or 40%, if I understand correctly).

I was challenging the perception that owning property is so fundamental to well-being and security that it should be attempted at all costs.

I rather assume that you were fortunate enough to find yourself in a financially secure enough position to buy at some time in the past, and that you then benefited from the housing boom. I am glad for you, and trust your good fortune continues. Please try not to sneer at people who through no fault of their own are having to try out other paths.

I don't think renting is looked down upon like it may have been in the past (from reading articles that is as I don't have many years of the past behind me when I cared about such things!)

The only thing that I don't like about renting is that you may have to move at the end of your lease, which isn't so bad if it's a long one, but a bit tough if it's 6 monthly & you end up having a couple in a row where you can't stay. Several friends have had this & it wasn't so bad as they don't have children.

We bought a house this year as it was far less than the rental payments we'd be paying on a similar house.

Bialystock, you're assuming a lot. This example is specific, but is just meant to show there isn't one answer....

I don't own a house at the moment. I wouldn't buy in the country I've been living in for most of this decade, for a lot of reasons - though I like living here. I sold my property in the UK - before the market went down, made a bit of profit.

Right now, I am paying rent. If I had bought, I would probably be paying a similar amount in mortgage interest. A bit extra - the bit that would be repaying capital in your example - is put on one side (so I can't spend it!), and is gently appreciating... now assuming I am right and property prices are not going to increase in the next few years (never mind whether they would have increased had I bought in 1960 or whatever) then, "lost money" or not, I will be better off at the end of those few years. And if I'm wrong and property prices do go up; well, I still have what I started with, plus a bit, to get back onto the "property ladder" - and in the meantime I have neither bought somewhere where I don't really trust the market, nor have I had to deal with the gaps between tenants when no rent is coming in but the mortgage still has to be paid, or the failure of tenants to actually pay, etc.

Desertgirl: I see your point, but if you are talking long-term (even 10 years) the money invested in property will almost always be worth more than that appreciated in a bank. Interest rates will not appreciate in the same way as a property does. There have been several massive booms in property over the past 30 years; each time prices have risen way, way above the rate of inflation and interest rates. Yes of course you'll be better off than if you hadn't saved, but £10k savings will mean less in 5 years than it does now, in terms of property prices (rightly or wrongly).

Bialy, maybe; but I am not entirely sure that this time round even in five years property is going to have appreciated much if at all - I think that this has not just been a property bubble; it has been something much more radical and it will take far longer to get back to normal than it has in the past.

Headbanger, I wasn't intended to offend. I honestly think, though, that you seemed so determined to defend the position of renting based on your own views of 'property owners', rather than an objective view of long-term financial planning. Eg comments about stigma, cultural perceptions etc.

I can honestly say I have never seen anyone ever discuss owning property in terms of social strata. The "guff about home-owning being the be-all and end-all" isn't snobbery or being able to brag you have your own home, it's because it makes more financial sense. Hence why I said I thought you were being foolish if you persist in renting simply to make a point.

I totally appreciate your position financially re student loans/mortgage rates etc, and yes I do feel sorry for people who struggle to buy a home. But you didn't seem to be saying "I want to buy a home but really can't afford it", but more "don't want to conform to stereotype about home-owners, so bugger you I'm going to rent". I spose I wanted to say don't cut off your nose to spite your face. I am sorry if this came across as sneering, it really wasn't how I intended it.

desertgirl, yy I think you're right, property hasn't changed much in the last couple of years and probably won't for the next few years either. I was talking more about much longer-term though (specifically, picking up on earlier posts about paying for care in old age etc).

Hopefully the craziness of the last 10 years has settled down, like you say. I'm sure you'll be fine when you decide to buy again

It's a delayed gratification thing with property purchase and instant gratification with renting.

If you are happy renting that's great, us property owners need people like you.

I think people on both sides of the fence are making assumptions about the other, and 'sneering' at certain points, tis the nature of a discussion I think.

I received this today about interest rates for anyone interested.

We have owned in the past and lost money.

We now rent a lovely property that from our incomes we could not buy. It is ours as long as we want it, the estate manager comes and fixes whatever we want when we want. We can do what we wish to do. The rent is cheap, at a guess £1K a month less than a new mortgage. We save about £18K a year, often more, which is possible as we have no mortgage and no upkeep on the house.

I don't rule out ever buying, but it would happen because we saw a house that we fell in love with rather than because we felt that we had to buy.

Owning a property gives you security and stability with the ultimate goal of providing a legacy for any dependants you have.

Renting is lower cost, flexible and better for budgeting month to month (i.e a faulty boiler is not your responsibility unlike if you owned the house) and you may end up with more home for your money than buying.

I believe that as far as possible owning a property is preferable to renting it over the long term. However every situation is different and it depends on what is right for you.

I have security, stability, lower cost, flexibility and a legacy for my dependents. I hardly think that renting makes me foolhardy and selfish as suggested above.

Good grief. Where did I suggest, imply or otherwise infer anyone who rents is either "foolhardy" or "selfish"?

I mean really! I was warned about some of the contributors to this place but seriously...