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’d hate to pay £££££ a month year in year out to not have anything to show for it. Also the uncertainty that the landlord wouldn’t want it back at some point. The feeling when I paid off my mortgage in my 50’s was just brilliant.

Imagine having to up and move with a month's notice and find a new rental age 80. People are less willing to rent to you if you don't have a high income.

That housing benefit may not cover all of the rent. I would be really surprised if there’s any pensioners who are getting their entire private rent paid via HB. It’s £900 per month to privately rent a one bed flat in my average part of the north west.

Ive never yet found a rental property with rent lower than the interest on a mortgage of a similar property.

It did used to be more of a thing, where there were landlords who owned a lot of properties outright, but these days more are owned heavily mortgaged by landlords who need to return enough in rentals to pay an expensive btl mortgage and turn a profit on top. The math ain't mathing.

I remember holding out for the crash. Didn’t want to buy a two bed flat in Brighton for £60k because the crash was coming.

When?

in the 90s prices went down and stayed down for 10 years

what if you lose your job during those 10 years and can’t pay the mortgage?

you can’t sell up, it’s worth less than your mortgage and even if you could drop the price there’s no buyers.

My parents are in a council house, and have never wanted to buy.
To them, secure housing, rather than an investment, was more important.

My DP is mid 50s and still rents. He has moved all around the country so never really set down roots. Can't afford to buy now anyway.

So because a crash didn’t happen when you thought it would there’s never going to be one ???

If you keep waiting prices will just keep going up anyway. I’m not saying there won’t ever be one but there has been talk of one for over 30 years. Long enough to buy a house and pay it off.

Only to the local housing allowance rate which almost NEVER covers your rent.

Find out what it is in Kensington and Chelsea for example and show me some rents it would cover?

In 1999 I bought a flat in London for 220,000k.

People told me I was mad, that there was a crash coming, that’d I’d lose money.

It’s now mortgage free and worth £1.4m

Glad I didn’t wait for the crash

If a mortgage would be £2k and rent is only £1k then yes absolutely buying in a falling market is mad.

But if they're both £2k then some of that mortgage payment is capital. At that point you're gambling on how much the market is going to fall and whether it is worth chipping away at the capital.

And if rent is more than mortgage then you're completely mad because you are paying a premium for unsecure housing. Which is bonkers.

It will happen. Especially now there is a Labour government.

Perfect.

I know people living in different European countries, and each one is so unique. It would take ages to write about the best and worst aspects of their rental legislation.

Compared to a third-world country, I know people in Brazil who live in rented flats, and their rental legislation is far more advanced and well-organized than ours. For instance, tenants have numerous rights that protect them in situations where we lack similar protections in our country.

Renting in zone 1 thought is incredibly costly……it would cost me about £3800 to rent my flat, whereas my mortgage is £1500……of course variables such as deposit, interest rate etc….but I actually couldn’t afford to rent where I live! Especially in retirement….

If you loose your job you find another job, any job that pays so the mortgage can be paid.
There is always buyers, even when house prices are high people are still buying

I’d most worry about affording it when I reach pension age. Spending monthly on a mortgage rather than someone else’s mortgage alleviates that concern.

Yes, so the only direct comparison I could find in my area without searching and calculating all night is a 4 bed house for 260k, assuming a 10% deposit, repayments are around 1270 a month with Barclays (first search result I found). The same property is being advertised at 1200pcm to rent

So fairly even stevens except that of course you're paying equity off and acquiring your asset and you dont need to worry about being moved out

I also saw another property nearer me (I had to expand the search for rent out quite a lot beause there are literally no houses to rent within a mile radius of our house which is another problem with renting, you have a limited pool), and the rent was 1500pcm, but there was a minimum income requirement of 45k a year. Very limiting.

When I rented, the landlord turned up whenever he wanted to do random jobs, he'd knock on the door when he was passing to tell me to weed the path and I was forever worried that he'd sell it next week.

25 years later 😅 I now just pay a few hundred a month in bills, can choose to cut my working hours to enjoy life more, have had spare money to help with the uni years. I wouldn't like to think that I had to pay unpredictable amounts of rent for the rest of my life, especially with pensions forever at risk.

Im not confusing anything. I saw you refer to interest but only an idiot would get an interest only mortgage on a property they live in.

The interest on a repayment doesnt stay the same in any case, it goes down as a proportion of your payment each month so you pay off more capital.

If only all the people who had their properties repossessed in the 90s had known it’s so simple……

Why would it be different if you lost your job and you rented?
You will still need to find a new job to cover your expenses and living costs regardless.

Yes this annoys me! I've got a three storey, three bedroom house. I'll be living here alone once the last teen flies. I'm mortgage free and enjoying life. I have the cash to maintain and do what I want to the house.

But everyone wants to know why I have stayed in the same house, wouldn't I prefer to be detached, don't I want a bigger garden...

I hate the argument that rent is dead money. Oh sorry, having a roof over your head is wasted money? How?!??

I’m not quite sure that those statistics paint the whole picture… there’s a huge increase in subdividing leaseholds and a rolling replacement of new build flats.

Terraces and other freehold houses remain exceptionally desirable and continue to rise/sell v quickly!