Why don’t people understand that not everyone wants to buy a house?

[tarrantulla]

We rent a flat in London. Have a big deposit but would rather invest it across several asset classes. Prices around us in zone 1-2 are dropping.

People will often say things like “oh are you saving for a deposit” or “it’s such a waste of money to rent” when in reality, for the last few years smart people in London rent and not buy!

I will always be a renter, and i'm happy with it tbh - i'm a council tenant

But if youre paying extortionate rent, in zone 1 nonetheless, you are best to try and buy, especially if prices are dropping a bit x

Why would buying a falling market be a sensible thing to do?😮

You’ll need a big pension if you are a lifetime private renter.

Because inevitably it’s not falling forever, and right now you’re paying for someone else’s investment every month anyway.

As opposed to paying interest to a bank?

This is an attitude I notice in the UK. When I have lived overseas there doesn't seem to be such an assumption that renting is a foolish thing to do in the long term.

Seriously?

Also - it’s not just about money. It’s security of knowing you’ll not be asked to move on or at the mercy of a landlord who hikes the rent. I’d hate to rent again after those things happening to me on a regular basis as a renter.

A final point. I’m now semi retired and was able to clear my mortgage with part of my lump sum. This means I have no monthly payment for my house so when I give up working completely, I’ll not need to worry about finding rent money from my pension.

It’s less stressful for most people to know that unless they have the house repossessed by the bank, they can stay there.
Moving home is stressful. Rent rises are stressful.
Smart people in London - also includes landlords.

But you get to own the property at the end of the payments you make to the bank. As ppl said, if you don't want to buy then great, but make sure your pension covers renting for the rest of your days.

People have different lifestyles and priorities so it just makes sense that not everyone wants to do the same things in the same ways!

I wouldn't be buying in London . Theirs a huge crash coming .

That’s what you’re doing while renting anyway- paying someone else’s mortgage, including the interest to the bank, with some extra on top for their profit.

The only time renting makes sense really is if you’re not planning on staying long. If you’re there long term then you’re better off building your own equity than someone else’s.

Buying a house is essentially renting from a bank. Interest on a mortgage is comparable to rent so saying renting is a waste of money just isn't true as in some cases the Interest would be more than rent.

We bought as renting would be 4 times the mortgage Interest. We also have no need to change location.

I love having my own property and wasn't keen on renting.

people have been saying this for years - it won't happen

It's not though in the long term. Renting you are paying and never have an asset.

Mortgaging is a borrowing against an asset that hopefully appreciating and that you will own outright.

I'd hate to be a pensioner and relying on the rental market

Firstly we have lower home ownership levels than lots of countries so this isnt the case

Secondly for those who do rent in other countries, some of those countries have very different legal systems and rental systems to the UK, meaning its more stable and not as expensive as the UK so there is more comfort with rentals.

In this country you never know if your property will be sold, if you're going to be given notice, you dont have certainty that your child can continue at their school or you retain a consistent health team around you becuase you never know if you're going to have to move and if so, whether you'll be able to rent again in the same area.

I have rented as much as I bought, and frankly no one around me cared a bit.

It's more people renting who seem to have a massive chip on their shoulder, which is weird. It cost so much to rent - even today - that it only means you have more money than other people.

It's ridiculously expensive to rent.

You are not renting from the bank, that shows some economic flawed thinking

And even if the interest were more than the rent, you're still paying for something that eventually gets paid off, with rent that never happens.

Unless people are needing to move regularly for work or other reasons or literally cannot get a mortgage buying makes more sense over the longer term. Problem is people think very short term for themselves.

I wouldn’t say renting means you have more money than other people, it usually just means you’re being forced to spend more money for the roof currently over your head so you never get the chance to save a deposit, or you have bad credit so wouldn’t be approved for a mortgage.

Unless you are able to have a deposit saved before you start renting it is so difficult to save one once you’re paying rent & bills. I have friends stuck in that cycle now who were keen to move out ASAP once they were old enough and the consequence of renting from day 1 means they don’t have a deposit saved and because they’re now paying rent they can’t save one.

I think a lot is about the worry of managing to pay rent on a pension. Buying a house, if you can, just seems financially prudent.

Of course I understand there are many people who can't, and we're lucky to have been able to. But I don't really understand just preferring not to buy.

Oh it will ... Violent crime is rising at such a huge rate .. Uncontrolled immigration.. London is becoming a place no one wants to go to .. Its inevitable.

What are the examples at the moment of price drops in zones 1 and 2?

Hmm it depends. If you are planning to work all across the world for different stints and no clue where you will end up there's not much point buying

I guess people that think a crash can’t or won’t happen are either very young, or haven’t seen it happen before. I have seen and been victim of property crashes in early 90’s and 08. Property goes in cycles. In this economic climate anything is possible, although I really hope the market doesn’t crash, it causes a lot of misery for people. Overall property always rises long term, renters just line landlords pocket, have no long term security as a private tenant. Nothing is without risk, but buying over renting is the option I prefer.

Here it is in fact, down 15% from 2022 and down 16% frm last year.

Which means prices over the past few years went up, then down again

If the average is around 900k now, and anotther drop next year of 15%, means that same average price would be around over 100k less, quite a significant difference in borrowing

Zone 2

https://www.rightmove.co.uk/house-prices/zone-2-93814.html