To think people with an average mortgage are still far better off than their renting counterparts

[Theinventoroftoasterstrudel]

I met with a friend today who was moaning about having sorted their remortgage this week and how their payments have increased by £250 a month due to interest rises. She's now paying £1000 for their 3 bed semi and I do fully appreciate how stressful knowing this remortgage was due has been for them this past year and how painful suddenly paying so much more is. I'm not in any way trying to minimise that for my friend or others with a mortgage in this position.

However, I rent and we live in a very similar property in a similar area to her which I had been paying over £1100 for for the past 2 years and a few months ago this increased to £1250. When we were told about the increase we looked to see if there was anything we could possibly find for cheaper and everything comparable was actually closer to the £1400 mark.

I feel like the news has covered the impact interest rises are having on home owners virtually every day since the mini budget last September but renter's have only had a cursory 'and rents will increase due to landlords passing on their increases' at the end of the odd story. And with zero acknowledgement that rents were already so much higher than mortgages anyway and still are. It's not like renting has suddenly become the better option; it's still utterly impossible!

Am I being unreasonable to think there needs to be more outrage and support for renters and not just those needing to remortgage.

Totally agree OP - I'm a poor, single, 60 year old female who cares for a young adult autistic son which has curtailed my earning ability for over 20 years.

But even though I have to find £300pcm (mort+mort ins) out of thin air, even I know I couldn't rent a garage for that. But I have a secure roof over our heads and that is priceless.

I think you are quite right. I have a mortgage, and don’t envy anybody who rents. Yes, it can be really tough when something goes wrong, or the mortgage goes up, but as others have said, at least I know in 25 years or so, we will own our home outright. I would much prefer that than to rent and claim housing benefit (and likely still need to work to top it up!)

I remember 15% interest rates, they briefly touched 18% . Our mortgage trebled . The anxiety was overwhelming. I was being bullied in my job and could not retaliate because I was terrified of losing my job ( long story) My DC has a mortgage and I pray he never has to go through what we went through . I think rents will go up again to pay for this mortgage rise .

No of course YANBU. I’m a homeowner but I have very little sympathy with a lot of the things homeowners tend to moan about. Boo hoo, we have to pay to fix our own stuff. I have a flat with a service charge which is not a particularly pleasant cost, particularly when it increases, but when I entered into home ownership I accepted that was part of the deal. (Mortgage protection insurance is optional too, I’m totally uninsurable due to health issues but you can get a mortgage without it.)

@Madwife123 I didn't say they had it 'far easier'. I said they were better off, there's a difference. I'm taking purely financially and I'm genuinely not seeing that I'm wrong. Other than the odd exceptionally unfortunate homeowner who's house flooded in a way their insurance wouldn't cover it, I'm not buying maintenance is what makes up the difference and it is purely a fact that, where I live certainly, the rent is more expensive than a mortgage for similar properties.

Of course.

Most renters aspire to being homeowners. Far fewer homeowners dream of renting again.

And I’m saying that’s not the case for everyone!

If I were to rent right now I would actually be entitled to a small amount of universal credit to help with rent payments. But alas we are in negative equity.

I will be better off in 30 years when the house is paid for yes. That doesn’t help me manage the bills now.

And you can budget far better for a fixed expense then an emergency expense that crops up when you can least afford it.

Landlord here.
I've recently remortgaged. My tenants had just signed for another 6 months just before I remortgaged. I will not be putting their rent up until the end of that 6 months. If they stay I will give them the open market monthly rent figure and discount this for them as they are good payers and look after the property. I will absorb some of the cost because it would cost us both more if they moved out.
In order to buy the house, I had to find a hefty deposit and a large chunk of money to bring the property up to scratch. A new boiler, new electrics etc probably more than I've ever spent on my own home. If something breaks down it is my responsibility to fix it in a timely manner. They are paying good money to live there.
There is way more than the mortgage payment to consider.

Apart from Madwife, it would seem.

Re the equity: not necessarily.

We only have 60k equity, home valued at £250k, and are paying £870/month. Newly agreed mortgage.

Well a home only gives a little bit more security. If you don't have any savings your only really one paycheck away from losing your mortgaged house if you suddenly lost your job. Thats why repossessions are up.

I don’t “aspire” to be a renter but if I knew 5 years ago what I know now I wouldn’t have bought this house to be trapped in negative equity with a mortgage I can’t afford.

Er, repossessions don't take place after one missed mortgage payment.

In order to buy a house everyone needs to find a chunk of money for the deposit and any work that needs doing, that’s just normal. I presume you expect to make a profit from being a landlord?

@Spectre8 surely home repossession is a last resort and the bank will try to help someone genuinely struggling to prevent this from happening. I don't remember rent holidays being a thing but mortgage holidays are an option. I see on here countless people suggesting how homeowners can temporarily save money by going interest only or increasing the term of ther mortgage to reduce their payments. None of this is an option for renters. And not every renter is entitled to housing benefit. I'm certainly not.

You need equity in the home to be able to do those things and take breaks.

Nope, bought our house in December, fully redecorated by previous owner, so lots of issues hidden and homebuyers report didn't spot, both bathroom and en suite have had to be ripped out and replaced along with livingroom and hallway ceilings.
Home insurance wouldn't cover because it was "wear and tear" that caused the damage, couldn't go back on the previous owner as although he knew about the leaks, he had proof he had done "everything possible" to repair the issues... completely decimated mine and dh savings to fix all that damage

No insurance doesn’t cover you for whatever has gone wrong, it covers you for the damage (minus the excess)

some costs for you OP:
solicitor fees for house purchase
estate agent fees for house sale
stamp duty
mortgage arrangement fees
boiler every 10-15 years
boiler service every year plus periodic breakdown and parts
new kitchen every 15-20 years
new oven periodically
new windows every 20 years
new fencing every 10-15 years plus maintenance in between
maintenance for gutters and roof (in last 10 years have had 2 new tiles, fixing of gutter twice and yearly clean)
plumbing- various leaks over 10 year period
new flooring wvery 10-15 years
basic decoration
buildings insurance
life/ employment insurance to cover the property

thats not nearly everything and doesn’t include anything major and unpredictable. Yes it’s easily thousands a year. I’ve rented and owned. It’s certainly sometimes much cheaper
and more convenient to rent, for example if you’re moving area every couple of years.

A residential mortgage you can get with 10% deposit. A buy to let needs 25% so yes it's a lot more. For me it is a long term investment. I saved for about ten years to pay for it so it will be a long time before i will be in profit. If I was not going to make a profit what would be the point? I live in an area with a large teaching hospital with a lot of staff of a rotation of a year or two. Not everyone who rents actually wants to buy at that point as they will be moving on.

This is what the advice always was - rent a cheap bedsit with your husband/partner/whatever while saving for a deposit for a house. Get the house, have kids = life's on the right track.

I see so many threads on here where people are saying they can't save for a deposit as they have to rent a 3 bed house as they already have several kids. Yes - exactly - wrong order = high rent costs = can't save a deposit = stuck in a cycle that will see you in retirement paying rent = likely no retirement.

I get that people should do what they want, but I see a decent amount of regret and I wonder if a bit more thought and planning would have led to a better long term decision.

That was in response to@Sillysosij

@Madwife123
Yes, I appreciate that. But most people do have some equity these days. I'm sorry that you don't. I genuinely never said (and don't mean) that every homeowner is living the life of Riley and absolutely many will be struggling far more than many renters are. But nevertheless, most homeowners have some equity (deposits and constantly rising house prices have made sure of this in most situations). Where as very few renter's have any say or control over how much they pay and if they are struggling, landlords are not incentivised to help because there's always someone else who can take their place and can pay.

That’s only the interest on a 190k mortgage? And not a bad interest rate

I doubt that the average homeowner replaces their windows and their kitchen every 20 years. There's a bit of dramatic license on this thread.

This is where I went wrong.

Bought our first house when we already had 3 children. But couldn’t afford it any earlier.

Bought a house that took us to the very limits of our affordability as we needed it big enough for 5 people which most ‘starter’ homes aren’t. Used help to buy loan to pay a lot of the deposit.

NHS wages froze for years so no pay rise for me. Self employed partner lost thousands in income over covid period and forced to take on a job eventually earning much less so already struggling with the payment we could previously afford.

And then mortgage renewal comes and shoots the payment up. But we’re in negative equity and new builds lose value at first so we’re stuck. And now we need to start making payments on the help to buy loan also.