To rent not own a house now I have a child?

[CharlieMumma]

I rent my house privately with my dp and our ds. We don't earn enough to be able to get a big enough mortgage for a 3 bed house. So until we get pay rises and save a big deposit we are renting. I think It definitely has positives as webcam move easily for schools etc.

Have had a few comments from other friends who own and are married saying buying is best what about the security of your children you could get chucked out if landlord want house back and in the future what will u pass on to them etc?

Is renting really that reasonable?

i'd rather own than private rent, as it is i rent but its housing association so more secure. but i really want to own in the future, not sure it will ever be possible tho' :(

I rent (can't afford to buy) I have had it both ways. Landlord decided to sell one of his houses as he was emigrating so that was a bit of problem but with this house we can stay as long as we like. I even know that if I could ever get the mortgage my Landlord would sell to me. I do feel I like that security that if I owned my house I wouldn't have to move again but I also know that if anything goes wrong ie the boiler its my landlords problem not mine

For the cost of our rent, at the cheapest possible mortgage I could get I would need 80k deposit to buy a similar property, in reality that would be 90-100k to make up for the extra costs of owning (insurance, repairs etc.) For the property to be a better investment than anything else for that 100k property prices would have to massively outperform all other investments. Currently they are underperforming even UK government bonds, let alone something with a smidgin of risk.

It makes no economic sense for me to buy here. The arguments about care in old age and all the rest only apply if you just spend the saving you're making renting rather than investing it.

You could be forced to move by a landlord - but that really doesn't happen often, landlords aren't stupid unless you're bad renters they want to keep you (they lose loads when it's empty) And you have to balance that against when you need to move for some reason.

I don't think YABU to wait to buy, but there is some truth in the fact that there is very little security in renting.

We bought last year after renting for a few years, 4 moves in that time because landlords wanted to sell up.

Luckily for us we live in a cheap area so our mortgage is 75% of what our rent was even though we've moved to a bigger house. So win win for us.

Of course where you live and your own personal circumstances have a big impact on how the positives and negatives weigh up so there is no right or wrong answer.

The 'obsession' with home ownership in this country is closely related to the security of tenure available. In other countries where renting is more common there is a lot more security for tenants. Buying a house makes good financial sense for a huge number of people in this country.

Mortgage rates are currently at an all-time low. I see them advertised at 2-3%

This is true only for those with a huge deposit or existing mortgage. For those with roughly 5-15% deposit, mortgages are about 6-7%, which can be pretty unaffordable.

"Vivi home ownership is more secure. Legally under the 1988 Act landlords can evict without any reason at all. Banks are not legally allowed to repossess unless you are in severe arrears."

True enough, but as others have said, severe arrears are par for the course with the economy and jobs market as it is. Factor in negative equity and being unable to sell in stagnant markets and all of a sudden that 'security' doesn't start to look so appealing. I'm not denigrating owning property, just saying that it isn't the be all and end all we're conditioned to believe.

As for it being our nest egg for out dotage, if we all relied on the equity in our properties to be our security in old age, we'd be in the kind of mess some baby boomers are in now realising their house isn't worth what they thought it was likely to be, and facing the prospect of a struggle to sell in order to fund care, with very little in the way of additional income streams. My generation is realising that alternative financial provision has to be made for our later years and for me and DP that includes but is not limited to property.

I'm really surprised and encouraged by the enlightened views on this thread. I was expecting to come back to it and find the usual homeownership hyperbole, but there are some excellent points made on the validity of the option to rent and the acceptance that everyones circumstances differ when it comes to buy vs. rent from some informed posters.

OP I'm really glad you posted and are feeling more positive abut your choice.

I'm glad I posted to vivi it's nice to hear a variety of views on the subject and to know that not everyone looks down on renting and those that do it!

We recently rented for 3 years whilst finding somewhere to buy and I absolutely hated it. And I hated it because of the awful landlord.

Renting would be fine if there was more long term security for tenants but while there isn't - well I understand why people want to buy.

However am well aware thats not an option for a lot of people.

I reluctantly bought a house back in the early 90s, and spent thousands renovating it (only did the jobs though when enough money was saved, so nothing was borrowed on top of the mortgage). Now the mortgage is all paid off, and it's great at the age of 41 not to worry about rent or mortgage repayments every month.

Not only is renting cheaper in terms of maintenance you also don't need life insurance or building insurance or critical illness cover. All these extra insurances add a lot to your monthly outgoings so its much more than the cost of the mortgage you need to cover.

OP I think buying a property you don't want and can barely afford would be madness, you're much better off staying as you.

I am considering renting once my divorce finances are sorted. I dont want to have the responsibility of unexpected repairs etc for a while. There is a huge amount of saving to be had on things like insurance as well. As property is not going to rise in value for a few years according to the experts its not a good time to buy anyway. OP if I were you I would keep my eye on the housing market and if predictions are right once prices start to rise again think about going for it. You make be in a better position to buy by then anyway. Definitely no point in buying something too small in a dead market. What if you suddenly had to move, say for work. You could end up losing money.

what i like about owning is that when i'm older, I'l have no mortgage to pay

We rent and have been here 4&1/2 years. Renting certainly does not mean you're turfed out after 6 months

Does mean I spend a lot of time gazing at the rental properties on s1 etc though

We are selling our house and renting this year. We have been stuck in this 2 bed house for 9 years. We need a 3 bedroom as dds both have SN and need some space from each other. Dh can't get life insurance without paying a massive amounts, and we now live on one wage because of dds.
Houses round here are too costly so off to renting we go

We own and there are some disadvantages, hubs and i hate DIY. I hate spending a grand on a new boiler and i'm shit at interior design.
Plus we rented a 5 bed detached for the same price as a mortgaged 4 bed semi, something isn't right there.

id never rent, basically you are paying someone elses mortgage with absolutely nothing to show for it at the end

That is quite a lot of bollocks camberwick.... the amount of interest you pay to the bank on a mortgage means that often actually you aren't losing out at all- unless of course the house in question in significantly rising in value. My house for example is worth £170k, a repayment mortgage would be made up as follows £850 interest to bank, £350 repayment on equity= £1200 mortgage, my rent on the hand is £650, so I am saving £200 per month by paying it to the landlord rather than the bank and provided I save the other £350 and not waste it I will actually have much more to show for it at the end, not including any savings by not having to pay out for repairs/maintenance. The above example obv assumes that all things remain equal over the period of the mortgage but given that if anything interest rates are likely to rise and house prices are likely to stagnate/decline over the short term your theory is absolutely unfounded in the current market.

Until about year 15 of a mortgage you still have nothing to show for it I believe, that's the point when buying is better for you than renting. All very as long as nothing dreadful happens to the house or your circumstances.

Well my landlord doesn't have a mortgage on this property, so thank god I'm big paying it for him eh? I mean never mind that renting means paying money in exchange for a home, clearly what matters is that renters are paying someone else's mortgage and this is a BAD thing.

Camberwick- what would u do if u couldn't get a mortgage then?

You are not saving money if you buy at the top of the market with an interest only mortgage - you are actually saving money renting. If we had bought 4 years ago we would have lost a fortune in equity and have actually saved ourselves from a massive debt by holding out and renting for the time being.

I'm in Ireland and I am thankful every day we didn't buy an overpriced shoebox like so many others.

House prices are down 60% on five years ago and showing no signs of slowing down.

Please, whatever you do, if you really want to buy, a) work out the rental yield and check it is actually sensibly priced and b) only buy a house if you would be happy to live there for a decade or more. Don't buy into the "property ladder" claptrap. We spent yesterday afternoon in a friends poky sitting room. They own TWO 1-bed apartments bought when they were single. Worth less than half what they paid. They cannot sell. Their 10 month old is in their bedroom which is fine for now but rapidly becoming unworkable. And a second child is out of the question for who knows how long.

And they are the lucky ones, they have good jobs and can pay the colossal, horrific mortgages to banks that have utterly destroyed our country.

Ahem.

Sorry.

It's just so fucked up and upsetting.

Totally agree with you Holdmecloser.

I wonder if prices here will slide like they have for you in Ireland.

HoldMeCloser - "work out the rental yield". Very wise words.

It is what we do all the time when loking at houses. At the moment in our town (mainland UK) a small run down 2 up 2 down houses in a fairly central but not very desirable area of town are just about fair value to buy (and do up) compared to renting but everything else is still way cheaper to rent than buy after all costs are taken into account.

So few people who own a house have any idea what their house would realistically rent out for and just don't realise how overvalued houses truely are. A few people who can't sell try do try and rent out and only then realise just how poor an investment their house really is. These accidental LLs are usually a nightmare to rent from as they hate to do any work on the house and resent every penny out of the rent it costs them.