To decide its not worth buying a house.

[notnagging]

Long so I don't dripfeed!
We moved out of our family house in another areas 4 years ago & struggled to rent it out. After letting agency fees & problems with tenants/repairs we just about break even. We were told it has no equity & the deposit was lent to us. We would like to get another house but it really doesn't seem worth it. We were told we can have 1 residential & 1 buytolet mortgage. It seems harder & harder to save a deposit. We have 5 ds so would need a large property which is about 250000 round here. That is about £1300 a month repayment mortgage. Renting a same size house would be about £1100-1200. I'm starting to feel down at the thought that we won't be able to afford another house. Our families see home ownership as the ultimate goal. But I'm starting to think I cant be bothered with the hassle now & I'm being unreasonable for wanting to buy. We are thinking of selling our property & walking away even though this means we are unlikely to be able to get back on the ladder. But is it really worth owning a home nowadays?

It's short term pain for long term again, every year the mortgage payments reduce the rent never will. One day they stop altogether, the rent never will.

That's a very good point mosman. We are lookin at a 25 yr mortgage which means I'll be paying until I'm 60!

Forgot to add my brother is willing to lend us the deposit & we pay him back after a few years. If we sell our old house we can get the govt scheme as we need a bigger house. I feel like our old house is losing money by the day. The uncertainty of whether the rent will be paid on time or whether any repairs need doing is stressing me out.

YANBU to want to rent, but I couldn't do it long term. If you rent privately, you can be asked to leave with only 2 months notice. You have to ask the landlord whenever you want to decorate. You'll be paying rent for the rest of your life, rather than a mortgage until you're 60.

Obviously there are upsides - flexibility, e.g. it's easy to move to another area and to upsize/downsize.

What's more important for you and your family in the next few years - stability or flexibility?

Why is there no equity in the house?

You don't know what's going to happen with rents, but if you get a mortgage on a fixed at least you know what's going to happen. How long have you owned your house?

"We are lookin at a 25 yr mortgage which means I'll be paying until I'm 60!"

And...? Average life expectancy for a woman in the UK is about 80 at the moment. Twenty years rent-free and with the advantage of an appreciating asset isn't to be sneezed at. Plus, as you get older and more experienced your earnings are likely to increase making the mortgage payments look more reasonable. You may even be in a position to overpay and reduce the term. There's no cap on rentals.

Maybe if you had to save up the deposit yourself you'd value the property a bit more and not be quite so happy to walk away from it.
Don't you want something to show for 70 years of effort ?

My granddad is having to sell his house to fund his care now he is in a home - if he had rented he would not be able to afford the full time care he requires.

Thank you some very good points. Just seems like a hassle now but like you've said it will be worth it in the long run.

It is a hassle, but if you decide to go for it then it'll be worth it.

We had a deposit and debated whether to keep it and just rent, however it actually turned out far more expensive to rent in our area than buy, so we bought. The way I see it is that, if you have the choice, renting puts the money in someone else's pocket and paying a mortgage puts it back into yours.

Have you been on the Money Saving Expert website? They've got some great info there.

Thanks cheesenchive. Will have a look

If you google James Altucher, he has some pretty lucid arguments against home ownership, which you might find interesting.

sorry on ipad so don't know how to link, am luddite.

We were over 60 when the mortgage was finally paid off [added to it over the years] and it felt lovely :)
We started retirement without mortgage payments which made pensions seem bigger and now ,aged 68, we are secure in our owned home and can even afford to save for extras.If we hadn't bought we would still and forever be paying rent and would have nothing to show for all that money.

How do you know there is no equity? Have you had a valuation done recently?

As an after thought, the mortgage of your home, can you switch it to a buy to let mortgage with interest only? Or is that what you have?

The other thing is over the course of the mortgage, your repayments will stay about the same, which means assuming your wages only go up with inflation, the percentage of your income being paid out in housing costs will fall - I know by the end it was only £100 a month for my parents mortgage, of course at the start of the 25 years, £100 was a huge percentage of their monthly income...

rent on the other hand, will probably rise with inflation. It will be about the same percentage of your income every month as now for the rest of the time in the house. And in your old age you'll be paying for rent out of pensions rather than if you buy you'll be living effectively for free - so you need to save more in your pensions, and I would suggest more than the £100 a month you will save in rent in the short term.

However, having borrowed the deposit, will you realistically be able to pay it back? I would be tempted to get your old house revalued, find out what it's worth today, if you would make any profit, sell it.

Depends where you are but I would say buy in the next two years. The market is probably close to the bottom.

No, it's not worth owning a home if you have to struggle to achieve it. Not in my opinion anyway. Unless you have a good sized deposit and know that on your current income you can pay a mortgage off completely in a reasonable amount of time, I don't see the point in owning for the sake of it.

You don't have as much security as people seem to believe you have just because you have a mortage. Your financial situation can change just as easily as a landlord can change their mind about renting to you, which can mean the home that you thought was secure is lost. You have to throw hundreds at maintaining a house, it doesn't come cheap to keep value in a building, and you could just be paying rent and letting someone else worry about that.

I don't understand why people get mortgages that they are unlikely to ever pay off before they need their equity back to start paying for their care homes.

Thanks for the responses. My worry is that if we buy we will end up in debt again & it has been a real struggle to get out. If something happens you can't get help from the govt in the same way as you do if your renting ifyswim but i suppose the goal should be upwards not downwards. Just feel stuck at the moment.
We have had our house valued & it is worth the same that we paid for it 7 years ago. I spoke to the bank today & they are happy for us to leave it as the rent is 125% of the mortgage so in their eyes a secure investment. They changed us from residential to buy to let when we moved out & they have said changing it to repayment would cost us more then we receive. So there is absolutely no point selling it. They said they will give us another mortgage which they will treat as separate if we can raise another deposit of 10%.
Just seems every time we try something else comes up but it does seen like it will be worth it as security for our ds' in the end.

We had a house in neg equity thhat we had to save up to sell. Rented for 3 years- forced to move with a 4 month old becuse owners wanted to sell. Rented one of the few family houses in the area-it was dreadful with terrible landlord. Scraped deposit together to buy again- never happier than knowing that no-one could make us move. For this reason alone, if you can buy for roughly the same as rent you would be mad not to.