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!

Yes, but if you buy, then your payments go towards something you end up owning.
If you rent, you are often paying for someone else's mortgage. And you will never own the property. You could end up paying more overall than you would if you bought.

But some people prefer to rent. It suits their lifestyle.

Of course its not the whole story, its a snap shot of the last ocuple of years for zone 2 for the 'average' price, incorporating all types of properties

The picture of the last decade is still an 8% rise year on year, averaged over that time. That is a substantial increase.

For me the bottom line is this though, even if the property price remained the same, no one can tell me how to decorate it, no one can tell me who I can have living there, no one can tell me whether I can have pets and then once I have paid off the property, its mine, no one can take it away from me, no one can give me notice, but more importantly I dont have any monthly payments to make. That money that I was paying in mortgage I will never have to pay again, I could retire earlier, I can spend my income on prostitutes and coke and then waste the rest, I can go on a lifetime cruise etc etc etc, blah blah blah.

The freedom I felt when we paid off the mortgage was amazing.

People have been saying this since 2001. I remember watching a new report on it!

We bought our house in zone 2 a couple of years ago. The price has probably dropped but it still makes sense for us to have bought. We have dcs aged 3 and 7 and it's reassuring for us to know that it's their home for their childhood, and we can plan the layout and refurbs to suit their needs as they grow. I like that they are building memories here and they will always be able to easily get to their school which is a 5 min walk away, and not potentially have to move to a different house which would be further away or even have to move school. We can think ahead to secondary and transport routes without doubting whereabouts in London we might be in 4 years.

Financially I'm not concerned about the house price now as we have no plans to sell for at least 15 years, and we had a big deposit so a lot of the rent vs mortgage comparisons don't apply to our specific situation. However, I agree that other asset classes are outperforming property right now so although we have a good chunk of cash, we have opted not to overpay the mortgage but we are investing in equities instead.

I have really no idea or interest in London rents but I do know that the majority of elderly people I know who are elderly renters get help with rent.
And the home owners often struggle with upkeep and repairs to their places so swings and roundabouts isn't kt

Actually when I bought my first place it was commonplace to have an interest only mortgage with a separate endowment.

I remember watching a news report on 2001/2. People had sold their homes and were renting as they were certain a crash was coming and they would cash in. Would love a follow up and no meaningful crash happened. 2008 stalled things a bit but that’s it

Feel the need to make one more point. On my street there is a house for sale and one for rent. Very very similar houses (same number of bedrooms, same style, similar garden). Assuming a 15% deposit on the “for sale” house I’m getting mortgage figures of between 1300-1500. Rental house is up for 1800 a month. Buying normally pays in long run

I'm glad my parents had their own house as I benefitted in the run lol.

Long term.it gives you security. No landlord is ever going to want their property back, leaving you without anywhere to live.
You can do what you want to your house, but have to ask a landlords permission.

Hahaha.

Hm I see your point OP. It’s retirement that would worry me. But everyone is so different in their circs that maybe you have a plan?

I agree being a council tenant is really good- secure tenancy etc. Lots of my family live in CH with no intention of buying. I agree it’s best for them.

I get it, some people don't want to be tied down to place for x years or responsible for maintaining a property. Nothing wrong with that at all.

It's rare in my family/ friends though, the only renter I know has a safe modern flat from the council. He's looked at buying but has such a good deal with the property he's in.

For me though, I'd not like to be at the mercy of private landlords, especially once we retire.

I know at least 4 people who applied to buy their London council flat last year - they all put in the applications before last November when the discount was drastically cut. It's their last chance to secure the discount £136k (it is now only £16k) which provides some protection against a drop in prices. From their pov, giving up the security of a secure tenancy is worth it for the freedom of being able to sell once the discount repayment period is up, and then they have the chance to buy a bigger place further out (they are all currently in zone 1 or 2). The councils (all different boroughs) are taking months to process the forms as they've been inundated with applications from savvy tenants making sure they grab this last chance of a decent rtb discount.

https://www.bbc.co.uk/news/articles/cwyxp280dxwo

I think someone has Reform algorithms or read to much DM. London is great. Unfriendly as ever, expensive as ever but great still.

The thing that people don't seem to realise is that if you're renting a council/ha property, you probably can't afford to buy. I know I'll probably never be in a position to buy but am so lucky to be renting from HA. Not everyone can save thousands for a deposit

Depends what your priorities are.

if it is exclusively about return on investment then yes maybe you can make more divesting and researching before choosing investment opportunities etc. in the past honestly nothing has returned profit like property but who knows about the future 🤷🏻‍♀️ could continue, might change.

But our rental market is pretty shit and unpredictable. If you value stability, the chance to build your own home and make it how you want over a period of years, keep your kids in the same school etc then buying has huge value that cannot be measured in £££ alone.

Ive seen you post here before I recognise the wording. You’re happy with your choices so why worry what other people say, there’s must making throwaway comments based on their own life and priorities. You’re happy and thriving and making good money by your own account so try not to let it get to you 🙂

What makes u think that?

My parents did the same, as they didn't recieve support with rent they actually ended up paying more than the value of the property over the years (even if you account for the sub-standard repairs carried out). Ita a shame they don't have a property to pass on- the big driver for us buying as soon as we could was so it was an investment of sorts for DS as well as obviously being somewhere to live.

I'm someone who prefers to rent. Much, much better for me, suits my lifestyle, budget and particular life stage.
I just wish that renting didn't have such a bad name in the UK, in many other countries it's a perfectly normal choice.

We bought properties when I was younger, and married with small children. Went along with the "security, it's an investment, don't throw money away on someone else's mortgage" idea. Hated it. Always worrying about the mortgage payments, every time something went wrong (storm, chimney fell off, water leaks, plumbing problems) it was always down to us to sort out. Also, we could only buy in areas we could afford to, not live in the sort of house which would have been more beneficial to us and our children. It didn't seem much of an investment then, high mortgage payments just seemed to be propping up inflated bankers' salaries.

After my divorce I resolved never to buy again. I have never regretted my choice. I would rather keep my money to spend on what I want. I consider my rent to be money spent on providing a roof over my head; to my mind that's what I earn it for.

I have lived in all sorts of beautiful places which I could never have afforded to - even, at one point, the wing of a country house. It was beautiful and worth every penny I spent, every month, for 7 years.
Renting, I'm not responsible for the fabric of the building. Most of the rentals I've had I've been free to decorate, re-carpet or do the garden as I wish....these places do exist (although possibly not in London?)
If I want to move, it's easy, I don't have to go through all the selling/marketing/exchange stuff, I just give notice and go. All the places I've rented have been secure and long-term.

I don't worry about retirement...I am retired now. Been in this place 5 years and expect to stay here - unless I change my mind, of course. There are plenty of beautiful rentable places which carry a lower rental price for over 60 year olds anyway, so I can afford to live here on my state pension. (And yes, it's private not HA, lovely converted country house with grounds, quite idyllic). I'm not worried about when I get senile/die....no-one will have the problem of selling a property like my sister and I did when our mother died....it was a nightmare.

I personally have fewer worries renting than I would if I were in a house I owned. Absolutely love it.

afforded to buy, that should have said

@SeasaltPuppy

I hate the argument that rent is dead money. "

eh? Of course it is. How could it not be. You are paying the landlords mortgage. Not your own.

When I bought my first place it was common to do that, but I didnt do it, as I said, only an idiot would and many got stung

Because the market goes up and down but in my experience the general trend has always been up. So people have worried about negative equity but this gets wiped out and forgotten as time goes by. The person who puts their money into property will always be better off than the one who rents.

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.

It really depends, loads had them in the past & it worked out well for many. I know some one who has a 1m interest only mortgage. They wanted a bigger home but didn't want to commit the full amount as they had other commitments eg school fees, renovations. They did put down 1m deposit though & this was pre covid. Their reasoning was they can sell & buy outright elsewhere if needed, it's similar to renting but they will benefit from any house price growth.