To get annoyed at the pressure to buy a house?

[Bexicle22]

We rent. I’ve always rented. I haven’t had the opportunity to save the kind of money needed to buy a house. My parents are very old fashioned, especially my dad. He says we HAVE to buy a house.

I don’t mind renting. We recently moved into a new build and pay less than £500 for 2 bedrooms, nice little garden for my daughter etc. Any time anyone comes to the house, they say how jealous they are as it is such a lovely place. It’s owned by a large housing group so we are fortunate to not have to worry about it being sold from under us as the company only rents the houses out unlike private landlords who can sell at any time. We don’t have a lot of disposable income and so knowing we have the added security of having things paid for should they break is also good.

My dad is always nagging me. He said that renting is dead money. He’s right, I know. He said we should be saving for a deposit for a house instead of going on holiday, eating out and whatever. I personally would rather live my life, have a little break away in the sun with my family. We aren’t jetting off to Dubai, maybe a week in Spain as it’s all we can afford. I feel like I can never say anything about anything we have spent money on as we will get a lecture. My dad truly believes that because we both work, we simply need to go to the bank and we will be given a mortgage, like it’s just that easy. To buy a house similar or better than the one we rent now here, we would need a deposit of about £15,000. My credit is terrible and my partner’s isn’t much better. We work very hard but earn less than £20k before tax between us a year.

Is my dad right, is buying a house the be all and end all of life? Is it an absolute necessity? Should we be putting our lives on hold for the next few years in order to save every spare penny we have so we can buy, even though we are perfectly happy where we are?

Is you dad able to help you with a deposit op?
if not then really it is your business. It is just bricks and mortar.
It is a financial asset, that is all, that you can't take with you. It will always need paying for, be it mortgage and/or upkeep.

my parents took 20 years to pay off theirs.

20 years goes by in the blink of an eye. Ours started off as 30 years and we reduced it. When you're youngee it's hard to picture the future but I will be encouraging mine to buy and plan ahead (with my support - OP dad needs to do the same)

It isn’t dead money, you’re paying for the roof over your head.

Most people don’t own their own homes, the banks do, under a promise that if they keep paying the mortgage they can have their home in 25 years.

Would rather live my life and pay into a decent pension that live my life looking forward to the day I own some bricks and mortar.

Rent is dead money but so is interest on a mortgage. And if you can't afford to buy a house then it's a moot point anyway - you have no choice but to rent.

Having said that, I prefer owning to renting. It's more secure and private, it offers greater long term stability, and our mortgage is cheaper than our rent for a smaller house used to be. If you can buy I'd recommend it.

Rent is dead money but so is interest on a mortgage

I wouldn't say it is. It is just a bit of an opportunity cost - e.g. by buying, you save £500 on your monthly payments but need to factor in £200 in interest so your overall saving is £300 which wouldn't be possible without paying the interest.

Also. paying interest means you earn money from an asset that isn't even yours - when the house goes up in value, you get all the profit even though most of it has been owned by the bank.

www.telegraph.co.uk/news/2016/06/07/i-was-an-angry-young-renter-who-railed-against-the-mortgage-indu/

"when the house goes up in value, you get all the profit even though most of it has been owned by the bank"

Depends when you buy and when you need to sell. And where you're buying. We bought just before the crash, and the value hasn't recovered that much since so we're stuck in negative equity which I'm hoping has reduced from £20-25,000 to £15-20,000 and that the bank will lend us that much so we can finally sell the damn thing.

If you don't need to sell for 30 to 40 years it will probably work out, over the shorter term it's a risk, just like everything is, and it won't always work out in your favour.

I’d always choose to buy if able.

Rent or buy you are paying off a mortgage, either yours or the landlord / landladies.

Once in your 40s you might feel different. Owning gives you the option to downsize in retirement giving an extra income at that stage of life. We bought a 4 bed detached as our first home (admittedly in a cheaper to buy part of the country) in 10-15 years once the kids have left we will sell and get something a bit smaller , we should then have no mortgage and maybe the equivalent of £150k to invest and supplement our pensions which we both have. Its the difference of being comfortable in older age or living on buttons.

Your dad is wrong to suggest getting a mortgage is so easy.

But I think you're maybe a bit blase about quite a poor financial situation.

I think op your income is very poor.
To put it in perspective dd 18, no real qualifications can earn in one of her part time jobs more than both your combined weekly salaries in 3 -4 days.

It also sounds like you are not managing financially otherwise you would have a clear credit file. If you are spending on holidays and virtually half your salary is going on rent it sounds like a recipe for disaster long term. How long before you can't pay your rent on your little house?
Your whole finances are a disaster waiting to happen.

I would suggest looking for better paying work, clearing your debts and getting your credit file clean then saving for a flat.
If you are only paying £500 per month I would suggest your house you are living in is around £100,000. You probably could find a flat in your area for £50-70,000. Well within your abilities to get a mortgage.

As a comparison op I cannot remember the last time I paid over £500 per month for my mortgage and I live in a 4 bed detached with a large garden in a very expensive area of north London. (we have been here 20years)

Otoh friend who went into rented at the same time as we bought our first grotty studio flat and laughed at us is still in the same house and pays £850 per month rent and will continue to pay £850 per month long after we have sold and bought another place and a holiday home for cash.

Buying , long term, gives you options.

I think the buying a house is slightly a red herring - clearly you can't afford to do so at the moment. Regardless of whether or not you think renting is a great thing and can't seethe point of house buying, it would be a good plan to look to improve your financial situation, build up some savings and improve your credit rating. Doing all these things will give you choices in the future. I wonder if your dad sees "house owning" as synonymous with taking laying down secure foundations for your family's future.

Rents in my area are around £1100-1200 for a standard small mid terrace. We were paying £500 a month for our rent and also made 100k profit from when we bought it to when we sold. Yes we had to fund repairs etc along the way but even so for us it's been a good decision.

I like the security and the fact I can paint it however we want etc. It was a huge commitment when we took it on but will be very worth it in the long run. When we bought our mortgage was the same as comparable rents but we had the added issue of maintenace (which included re wiring). If you are able to organise your finances it could be a good decision long term but if not there isn't actually a whole lot you can do so it's not worth worrying about.

That should say we were paying £500 a month for our mortgage

Your dad isn't wrong but maybe a bit naive in today's world. Neither are you wrong in not wanting to sacrifice your small luxuries in the pursuit of something that will be very hard to do, given your current circumstances.
Perhaps ask him for his advice how to do it, with some actual figures to hand. When reality hits he will either back of or will offer to help out.

Having just finished paying our mortgage we are now looking forward to the extra income for the future. We also have security in having a major asset to sell if we need to. A 25 year mortgage seems forever at the start. It goes surprisingly quickly in reality. Unfortunately your generation are not always in a position to be able to do it though.

TBh I'm not sure who said about the twenty five years of interest but there is a solution. If you have any extra income you overpay (depending on t and c of course). With our mortgage we overpay fairly heavily and that has reduced the interest and more is coming off the mortgage balance. For a mortgage even 25 or 50 extra a month makes a huge difference.
Even with our payment we are paying less than it would cost to rent and no rent/mortgage payment by my early 40s so I can save for my pension.

Normally mortgages are significantly cheaper than rent for the same property, yes, and the extra in rent covers both maintenance, agency fees and repairs to the property,, clearly if the rent gained didn't cover all those things, people wouldn't wish to be private landlords as there would be no profit in it. No one does it out of altruism.

I'm not sure how if you're paying rent you can afford a pension, but you can't if you have a mortgage, that's not really logical. As per most people we have both a mortgage and pay into our pensions.

Clearly when you rent you are paying it for life and when you die you do not leave rhe property to your children. When you get a mortgage, after 20/25 years or whatever it's yours, you are not paying it in retirement and the property is yours to downsize and release equity, or leave to your kids as inheritance.

My grandma rents in sheltered housing. She and my grandad did own their own houses years ago. Not sure what happened!

Anyway, her rent is £800 a month and is largely covered by housing benefits. She gets a pension and my grandad’s work pension. She’s very comfortable. It’s a ticking time bomb though, millions of elderly are going to need housing benefit in the future as they will never afford to buy...

I did ask further up but the op hasn't returned to the post since starting it. I'm guessing it's a HA house due to what has been said.
All these comments about get a better job, save money etc; honestly it's really not that simple. Some people just don't live in the real world.
Where I live, very few young people can afford to buy, even the affordable properties require huge salaries. We're comparable to London in price versus salary.
Honestly, if it is HA then they're reasonable secure for now and won't be hoofed out due to a ll's whims.

All these comments about get a better job, save money etc; honestly it's really not that simple. Some people just don't live in the real world.
Maybe not immediately. But most people are not passive victims of circumstance.

In the real world you can seek opportunity, can seek alternative employment, can look for 2 full time jobs, can make decisions about holidays, can take ownership of your own credit situation.

Nobody's suggesting that the OP waves a wand, solves everything and buys a house immediately, but lots of advice about seriously considering their financial situation is quite sensible.

I agree MaisyPops.
NMW (prior to the increase next week) is £7.50ph. Even if you work only a nice office week of 37.5 hours. Over the year, that amounts to £14 625, so, jointly, even on NMW, you could earn just over £29 000 without leaving NMW jobs.
I understand there will be costs associated with childcare (not sure how old your dd is), but you say in your OP that you earn less than £20K, gross, between you.
At the end of the day OP, it is your choice of course it is, but financially there are all sorts of things you can do, If you really wanted to get on the property ladder.
As others say - 25 years seems a lifetime when you first take out your first mortgage, but it really isn't once you hit your 40s, then 50s and start wondering what you are going to do in retirement.

BackforGood
That's my thinking. If a combined income is £20,000 then that's not 2 full time incomes.

If someone has poor credit then it is irresponsible to be spending on holidays, in my opinion, until their financial situation is better. It's not about saying 'people on lower incomes should never have nice things' (which is usually the accusation issued on threads if anyone suggests taking a look at finances). It's just that the responsible thing to do would be to aim to get a handle on finances rather than take the view 'we'll never be able to buy a house so we may as well have treats and ignore our poor credit'.

I'm probably the same generation as your dad, a time when a lot of people did buy, we did. When my husband died the insurance paid off the remaining mortgage which was very small and I could have easily paid it off when I sold my DH business. With the money I had I was able to help our children get onto the property ladder. That said, one of our DC was always meh about buying, they did in the end but only when they saw that should the worst happen it meant they probably wouldn't crash and burn financially as I didn't.

These days things are very, very different, house prices are crazy and the three and a 1/2 times salary we needed wouldn't work today. Yes, interest rates were much higher and we had tough times where renting would have been oh so much cheaper as DH built up his business.

Do what feels right for you, your dad shouldn't pressure you or make you feel bad, you need to do what you want to do. As parents we made our choices, now it's your turn.

I understand. I like looking around at possibilities, I'm visually impaired and finding a decent landlord is very difficult since most discriminate and many estate agents automatically assume I'm on benefits, etc. etc. I live in quite a nice area, so the priority goes to bankers And lawyers.

My mother would not stop going on about me having a house though, and she did it so much, but in the end I got very upset. I was totally put off by the idea because it was being forced on me and not my own decision. I think it's very hard though, I do have additional needs, but I need to be able to have some independence in my decision-making, and she feels very differently. I need help, but I also need freedom. And I'm getting older, so we are clashing heads a lot.