To ask if anyone choses to rent rather than buy?

[Walkaboutwendy]

Is there anyone who choses to rent rather than buy?

We are in the process of selling up and stepping off the ladder for a bit. I'm musing as to whether there's another way than jumping straight back into a mortgage debt.

If you knew you had money in the bank (a passive income for life to pay the rent that would keep pace with inflation) would you chose to buy?

I'm weighing up the pros and cons so would really appreciate different views.

Sorry excuse my 2k that was the fifties, fifty years ago average house price was 13k, the equivalent of 90k in today's money,,

I rent and own other places I rent out. Ive done this because wasn't really sure where I wanted to settle and have moved around. Landlord is selling where I am now so I have to move which is a pain in the arse but not world ending. I do like the place I am now though so looking to buy in this area. Ive got a friend who also rents and owns other properties he rents out. If I knew where I wanted to be I would always buy rather than rent - but renting does have lots of advantages.

Of course renting isn't cheaper. Because precisely that,, you have the asset and any equity in it if you buy

So you're advocating highly leveraged bets, or another period of hyperinflation to reduce the debt? Because buying is signficantly more expensive (interest only with 50,000 deposit would cost about 800 quid a month extra) Which means that the house price growth would need to be very, very significant to generate any sort return, and you'd need significantly higher income all the time to fund that, and the repayment vehicle.

Of course if there was very high inflation then buying in todays money would be very good, but I don't think that is either likely, or would be generally good for any of us anyway.

Another consideration is that you by owning the property you live in, your housing costs are almost as perfectly hedged as they can be. Whatever happens to the housing market has no effect on you, as you have paid in advance for exactly as much housing as you intend to occupy for the rest of your life.

A generalised passive income is never guaranteed to give exactly the returns needed to match your rent. If the income comes from residential property in the same area you get the closest match between income and outgoings. But if you are willing to own property in the area you live in, it's unlikely to make more sense to rent rather than live in a property you own.

You're missing the fundamental point that buying can never be cheaper than renting unless there is a huge property crash, because when you buy, ultimately you own, when you rent you're just paying a bill, like in a hotel. You get nothing but the joy of the stay.

Sorry buying can never be more expensive than renting!

People only tend to tell you the horror stories of renting. I've lived in 2 houses in the last 8yrs and had exceptional landlords. Celebrities rent often because you get something far better, it's like leasing a car.

But you also don't have the risk of an enormous loan hanging over you and a house you're really attached to that can be taken away if you don't pay the massive loan. Owning is a myth until you've paid it off it's not yours!

From the few times I’ve rented, in some really lovely places, day in day out I dreamed of owning it “if I owned it, I’d do this, oh I love this neighbourhood I’d love to own that cute little house”.

I just can’t fathom ever going back to that.

But you also don't have the risk of an enormous loan hanging over you and a house you're really attached to that can be taken away if you don't pay the massive loan. Owning is a myth until you've paid it off it's not yours!

I've no clue where you're going with this. Renting it's not yours either and if you can't pay the rent you're out on your ear. At least owning if you have some equity you can sell and release it, or you can simply downsize.

However the op won't have a mortgage. She is buying outright. So I'm failing to see how your point is relevant.

grasslands I was like that for many years. I used to rent and owned a property I let out. I used to dream I'd do this or I'd that when I buy. The reality I've found is that I can't afford to do it because something else needs doing! I feel much so much more stressed having a big debt hanging over me!

I am in SH and was in a position to "think" about getting a mortgage in my late 30's. I decided against it because to buy anything even close to what I have now, the interest alone was more than my rent will cost for the next 20 odd years (can't remember the exact figures but it was shocking!). I would have needed a 25 yr mortgage and that was a frightening commitment for me. Also, I am single and my main concern is what if I become unable to work for some reason? With SH (and with most private rentals) Housing Benefit will cover at least most of the cost, unless you're living in some swanky place. If that happens to you with a mortgage then you're out on the street. I think HB will pay the interest for a spell but it would be a big problem. My kids are grown up now and instead of all my money being swallowed up in mortgage payments (with them having to wait until I die to get it!) I can help them out now financially with various things, when it's of far more use to them. So for me personally this way was better.

I just think it's unfair in this country that people are often "forced" to buy when renting is the norm in many countries and tenants have a lot of protection, and rents are affordable. It should be like that here. So I think I'm lucky to have SH but I don't feel it's "wrong" that I have it, what is wrong is that level of affordability/protection should be there for private tenants too.

Sorry buying can never be more expensive than renting!

I think a better way to put it is that in general or on average renting has to be more expensive than buying. Obviously there can be cases of someone being unlucky with timing, buying at the peak of a boom or selling in the depths of a crash, and they may do much worse than the average property owner.

Sorry, missed that the crash exception had been mentioned in the original post.

The reality I've found is that I can't afford to do it because something else needs doing! I feel much so much more stressed having a big debt hanging over me!

I don't understand. Is your question hypothetical ? If you have a lifetime income you can afford to buy and you don't need to have a big debt.

Absolutely not. Why would you want to pay someone else's mortgage? That's insanity. Nothing builds faster or is more assured than equity.

We can pay the mortgage with passive income from pensions but the house is getting more expensive as more needs to be done. Plus I hate logging on to my bank seeing a massive debt in the form of a mortgage. Feels really oppressive.

Just musing about a different way of living or perhaps going back to when we were renters with investments. Felt much more flexible.

Nothing builds faster or is more assured than equity.

Actually that's not entirely true. There are many investments that outpace property. Plus your equity isn't assured if house prices decrease.

I'm still lost op, how you have pensions but can get a massive mortgage ? So you don't have a Lump sum, it's rent from your pension or what? Get a mortgage from it? How old are you?

We are renting and I hate it. Our rent isn't too steep though (and it's a gorgeous house with an easy landlord which makes it better) so we are currently living frugally and saving. Can't wait until we have enough together for a home of our own.

Both with full military pensions and lump sums. Bought when I demobbed a few years ago. Early 40s. Also sold investments to increase equity. Now work in exec role so pretty good salary with bonus.

Don't really want to go into too many more details as too identifying but hope that explains a bit

I just wish they'd take rent affordability into account t when looking at mortgage applications. I rent a house far in excess of what my single income could purchase. I owned a house both solely and then with my husband from 22-43. 5 years ago I had to sell and relocated, knowing I'd possibly never own again. I rent a 4 bed house for me and 3 kids privately and not through an agent but rent is still full market value. (eldest can't share due to asd). I was paying the mortgage on my own for three years after ex left and my rent is only £75 more per month. I would be laughed at if I were to ask for a mortgage on even a 3 bed semi in spite of the fact that I have never defaulted and now maintain rent on a 4 bed home. Rental Affordability as well as earning capacity should also be taken into account. I'm hopi g that at some point I can buy myself a little flat once all the kids leave home. I'll be working TIL I'm 100 by then anyway just to pay off my student loan!!

Well, if you own and you can't pay the mortgage you're also unlikely to be able to sell due to fees. If you rent then you can give 1 months notice and find somewhere cheaper.

I rent a 2 bed council house, I'm never going to buy, though I could probably put an offer in for this house after x amount of years, I won't. It would be mad for me to give up council housing, the rent is cheap, and in my area the emergency maintenence services are really on the ball (for most things). My mum bought her council house, and as soon as she did so many things broke and needed to be repaired or replaced, it cost her a fortune in the long run.

Plus when I die, someone else who needs it can have it. My ds won't be renting out the home I left him, at riddiculous prices, or selling it to live off the profits. I truly believe Thatcher selling off so many council properties has left a lot of my generation up shit creek without a paddle, and I'm not going to exacerbate the problem by reducing the available social housing further. It's doubtfull I could get the deposit together to buy a non council property/without the reduced price.

Plus, we have a transfer scheme, so I can always move if I need to, from one council property to another.

We’re currently choosing to rent (but different because we didn’t sell in order to now rent). We could have bought something in the past but we wanted to skip the starter house. We can currently rent a nicer house than we could buy, but that’s allowed us to save and invest for about 5 years. Ultimately it puts us in a better position to buy and we’ll be able to buy a larger house with outbuildings for our business and land. We couldn’t have gotten all that if we’d caved and bought sooner as our investments have increased faster than house values would have. But no way I’d sell up to go back to renting unless I had no choice. It seems really precarious.