To think owning a home isn’t the only goal in life

[Bonjourmonami73]

Don’t get me wrong, I would LOVE to own my own home but I am priced out of the market and it’s not looking like I will own any time soon. I could move to a cheap area where I don’t know a soul but I don’t want to. I have a great flexible job, 2 happy kids in a nice school, lots of friends, a social life, holidays etc. I just can’t afford a house as Would need £100k at least deposit.

Someone said to me yesterday that they don’t understand how I can ‘bear’ to live like this and that I should be doing everything I can including moving to a town 200 miles away to get on the housing ladder. I dont understand this logic at all. I would rather own my own home of course but I don’t have a deposit.

The other thing that this person said is ‘what will you do when you are older’ and the truth is I don’t have the answer. Maybe move somewhere cheaper then when my kids are grown up.

Aibu to feel like this? I am a bit tired of being asked why I can’t buy a house. I have actually privately rented this house for 7 years and can have it for at least another 2. Yes I know it’s ‘dead money’ but there isn’t anything I can’t do about that as I can’t save £100k for a deposit.

I feel judged constantly for renting- the person yesterday basically implied I had totally failed in my life.

Aibu?

The same flat we have would be £1300 a month to rent here, on the top floor - our mortgage is around £440 a month. We couldn't afford to rent here, anymore since the prices and rents went up.

Hmm, my parents get the state pension and pension credit, it seems Ok in terms of money as they have very low costs. Sheltered housing, heating discounts etc. they seems to be able to manage Ok and even save some.

Do those who (quite rightly) blame Thatcher for Right to Buy, ever ask themselves why Labour, who professed to think it utterly wrong and had 13 years in which to do it, didn't overturn this law?

I don't think it's over cynical of me to think that the reason they didn't was because they thought it would lose them votes.
Plenty of diehard Labour voters, including a good friend of mine, were only too pleased to be able to buy their homes. My friend had lived in hers for 40 years.

As for Europe in general, from all I gather, more people are buying now. A Swedish friend, who's lived outside Sweden for many years and always rented in Stockholm before, has just bought a flat to move back to - she didn't even consider renting.

Her son, who has 3 children and also lives in Stockholm (where prices have soared in recent years) is in his 3rd house - bought after buying and renovating to sell on, the previous two. It's not just a Brit thing any more - if it ever was. The French, at least outside the big cities, certainly prefer to own if they can.

However I agree 100% that there should be a good deal more protection, and longer, secure tenancies, for renters in the U.K. As for renting in retirement, if you have a good enough income, it may well be fine. But I have a retired friend on a very limited income who was recently threatened with eviction from the small flat where he's been a very good tenant for several years. The reason the LL gave was that she wanted to renovate/update it and re-let for more rent than he can afford.
Thank goodness the LL has now changed her mind - at least for now.

I don't think it's bad advice to buy a buy-to-let in an area you can afford, and continue to rent in the area you want to live in for now - lots of people accidentally do this, buying a property to live in, needing to move for work/family reasons and end up renting out their old home and renting a new place.

You don't ever have to live in the rental property, but in 20 years time, if you own that rental property out right (and your dcs have left home so you don't need a large family home) you can sell it and use the money to buy a small place for you and DH without rent or mortgage to pay in your retirement.

@johnnyfinland

I am highly amused by your stance of “taking personal responsibility”when in the next breath blaming all your failures in life on Thatcher etc 😂😂😂😂

"So after retirement age they'd need to solely rely on their pension to pay for absolutely everything"

Erm, yes, I think that's a lot of people's situation whether they own or rent isn't it? Are you talking about state or private pension?

so after retirement age they would need to solely rely on their pension to pay for absolutely everything?

I'm confused by this comment. Isn't that what happens after you retire? Your pension is your income?

I don't know much about this. I live in a city where it's unlikely I'll ever be able to buy. A friend of mine is in the same position. She's Italian. She's buying a (much cheaper) beach apartment in Italy, renting it out to pay its mortgage and will sell it to get her own in ten years or so.

@happypuppy i take it you're a millionaire then, who's at the absolute top of your sector, always had every pay rise you asked for, own all the houses you want and have a huge lump sum in the bank? Do you really think the housing crisis - a recognised and widely-used phrase to describe the current housing situation in the UK is down to people not taking responsibility for themselves? Are you honestly that ignorant that you can't see how policies (public sector pay freezes, selling off social housing stock etc) affect people's earning power?

And yes, the bigger issue is that the assumption that private pensions won't need to cover housing costs.

If you are renting and plan to be long term, then you need a higher income in retirement to give the same lifestyle as friends who are paying a mortgage now instead of rent.

In many European countries where long term renting is the norm for middle class people, pensions allow for that.

Add that to the general view that most people aren't saving enough for retirement, it's not going to be fun when today's 30-somethings become 60-somethings.

@nottinghillgrey - think the point is, most middle class people who have bought, will have cleared their mortgage long before retirement age, so when they retire their pension doesn't have to cover the house costs, plus they can sell the family house, downsize to a smaller house/flat and use the difference to subsidise their income.

Most pension predictions of lifestyle are based on the assumption that you won't have to cover rent/mortgage costs and you have a big asset to draw on if need be.

If you are renting long term, you will need more money in retirement each month, and can't assume current benefit levels will be the same in 30 years time.

@Coffee in theory renting out a property elsewhere seems like a good idea but most first time buyers are unlikely to qualify for a buy-to-let mortgage or be able to afford the associated costs. What about the inevitable repairs that'll need paying for, the extra taxes, the periods where there's no tenant?

Also I don't think people in their 20s and 30s are under-saving for retirement out of choice, are they? (apols if you didn't mean that) wages haven't risen like-for-like with inflation. For example, in my industry, often paid by day rates, in the early 90s you could earn £120 a day doing a certain job. Guess what the day rate is now for that same job? ......£120

State pension is only around £150 per week, which is just enough to live on, not enough to pay rent. Lots of people on this thread seem to misunderstand this. Without a huge private pension, you would need housing benefit to pay your rent in retirement.

Also found this....

'On average those aged 55-65 currently have £105,496 saved in pensions, according to research by Aegon. Typically, a pension pot of around £100,000 would provide an income of about £5,000 in retirement,'

So if the average private pension is only paying out £5000 a year, unless you have a much bigger pension pot than this, or a final salary pension (like the op), this is not enough to pay rent with either and people will still need housing benefit.

Owning even a small place for retirement, if at all possible, would be my advice. I certainly wouldn't rely on government handouts, which may well be cut to the bone by the time people in their 20s/30s retire.

Oh and should have added...

Op, even though I advise buying, whoever said that to you was still downright rude and you should have told them to FOTTFSOF!!

Of course the big elephant in the room at the moment is Brexit.
Many costs will go up, no idea how much. The Pound is already falling and Brexit hasn't happened yet.
Investors from outside Britain, unless regulations change, can buy up property to rent out. They won't necessarily want to live here, it's an investment to make money.
The properties in London are not being bought by the Smith family from Luton but overseas buyers.

"State pension is only around £150 per week, which is just enough to live on, not enough to pay rent"

Yes, but they get top ups like pension credit and HB / UC to pay the rent, that doesn't all come out of the state pension.

For everyone whose confused by my comment about having to pay for everything on your pension
having to pay rent each month would be very stressful in old age compared to being mortgage free. That’s what I was referring to.
And if you read my comments further back in the thread you will see that I stated I was ONLY referring to those who are in the position to buy but would rather rent, not those who aren’t able to buy and don’t have a choice in the matter.

@lovelybath but people can’t just assume these things will still be as readily available as they are today. The government will have to make cuts somewhere before the country ends up completely on its arse. I don’t think the state pension or benefits will ever completely stop as the country would be ruined, but they will probably increase the age to about 75 for the state pension and just hope a lot of people die before then. I wouldn’t want to be working until I was very elderly to try and pay rent until I could get access to a pension.

I guess the point is that if people are home owners they won’t have mortgage payment after retirement but renters will need the income to pay for a monthly rent

@LovelyBath77 you appear to not have read that I mention needing HB on top of state pension in that same paragraph!...

'Without a huge private pension, you would need housing benefit to pay your rent in retirement.'

Yes, exactly, Sprinkles. It worries me that people like the OP and her family are unable to buy where they work, and save money by means of having a mortgage so that at least they are reasonably sure of having a paid-for roof over their heads by the time they retire - hence my being one of those to suggest a buy-to-let purchase in a cheaper place so they would have somewhere to live when they retire, which people on here are saying is a bad idea. The idea of the buy-to-let in this case is not to have a property on which to make a massive profit after the mortgage has been paid off, but simply not to have the worry of finding rent on retirement. Anyhow, the OP's circumstances may be such that this wouldn't work for them. And I've just realised, I haven't answered the OP's question - no, YANBU!

Being content / happy with your lot in life is my goal . I do think we should all start planning for our old age when we are fit and able to and if that includes owning a property then fair enough . There are other ways to be financially comfortable in your old age without property I’m sure .

thanks for all your comments.

FWIW I have already explored buy to let elsewhere but as someone pointed out, you can’t get a BTL mortgage if you haven’t already had a residential mortgage so it’s not possible for me.

Johnnyfinland - no, I didn't mean they were under saving by choice - but more the pension products/schemes we are sold assumes a lower level of income needed to maintain their lifestyle in old age, because it doesn't factor in needing to pay rent.

My goal in life is keeping me and the kids alive fed and watered.