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!

Because your forever paying someone else’s mortgage, surely it’s better to pay your own mortgage and end up with an asset at the end of it

I don't get how they are going to keep paying more and more housing benefit for renters who retire. It's going to become unaffordable when generation rent get to this point.

Things have changed since the 90s. The very obvious solution if anyone looses their job is to go get another, it doesn’t have to be whatever field someone works in it can be anything that pays. I’d of thought that be what anyone does who looses a job… find another 🤷‍♀️

Buying is almost always cheaper than renting; renting is money wasted if you have enough to buy a property.

Property prices will always go back up. They’ll never drop much to make renting the better option.

I also know people who bought flats post Brexit and sold them for the same price post covid or less. If you add in services charges, stamp duty they will have lost money. And that's before inflation; a 500k flat bought 5 yrs ago needs to sell for 630k ish now to keep up.

So naive.

It’s not just interest you pay (as long as you don’t choose that option) - you’re paying off the loan to purchase the property which will then be YOURS.

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

mortgage lending is quite different now, less 100% mortgages, interest only mortgages, self certifying, etc

But you OWN your property at the end.

Having a mortgage is not renting from the bank 😂

I don’t understand why people who can buy don’t buy. I was not able to buy for years so rented and bought the moment I was able to. I don’t think anyone plans for the future I agree

I know a couple in their 40’s with kids who have no decent pension as in and out of self employment, they rent, have a few cars and rent a business premises (so don’t own that either) and technically have zero assets, just spend what they have. That’s nice now but what about later on?

I don’t know why people try to claim paying interest to the bank makes purchasing less positive, renters still pay the mortgage payment and the bank interest and the cost of repairs and then profit for the landlord on top.
Landlords are always the going to be earning profit on renting out the property, no one is making a loss.

You don’t get out of paying interest or repairs, it’s all rolled into the higher monthly payment which reflects more than the total price of owning over the years.

For me, now that I'm in my 50s and on my own, it will hopefully give me the opportunity to go part time way before my official retirement age.
It's not something I considered at the time of getting on the property ladder, but something I constantly think about now.

People really can’t understand that I’m 26, can barely afford rent and can’t afford a mortgage because my salary is so low.

My parents are happy having me at home. I do all my own shopping and cleaning etc., have my own life, while living at home. People can’t understand that this makes us all happy and why it works for us.

My mortgage is less than £700 a month. To rent my property would be in excess of £2,000 a month.

Buying is always better OP if you can afford it.
Get rid of that chip on your shoulder, save up and buy. You’ll have security and own that property one day.

People just cannot fathom this!

The reason to buy is because one day you will own outright. I was mortgage free at 49, how? Because I bought a zone 4 flat in 1995, which I then sold (before prices went crazy) for a house elsewhere in the U.K., which I then sold 3 years later for a house in another city (all job moves) then finally sold that due to divorce, I then bought with my now dh a much more modest house than we could have bought based on income outright 50/50. It’s simple now, our monthly expenses are only a few hundred so retiring early is going to be possible

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)

Really @Allisgoodtoday ? You can afford this privately rented home and your possible future home with a lower rent with only a state pension coming in? No savings, no benefits, no private pension?

I think the main issue is that here tenants have very little security, you can be a perfect tenant paying the rent on time and looking after the property and still the landlord can hoik the rent up significantly or decide they want the property back

If there was rent control and more security for tenants then I think more people might look at property the way you do, particularly in a climate where prices are stagnant or falling in some places

Oh I agree.
I would never buy a flat . Leasehold properties are a nightmare

Like anything else in life, you are free to make choices depending on your priorities, but I think a lot of people value the security and permanence that home-ownership brings. I've seen so many threads on here from renters who are genuinely shocked and aggrieved when their landlord gives them notice, like it never occurred to them that this day could come. "This has been my home for X years, how could they do this to me??" etc. Of course some people have no choice, but if you could afford to buy and choose to rent I would assume you're someone who is comfortable with potentially having to up-root yourself fairly regularly at a couple of months notice. Many people would find that prospect hugely daunting especially as they get older.

Because if you bought a flat for £500k and sold it for the same value a couple of years later you will still have been financially better off owning vs renting in that time period even after accounting for selling fees.

Buying flats has always been riskier than buying houses. Houses generally sell more quickly than flats, and of course you’ve got leasehold issues and yearly increasing service charges, which need to be paid for all the time you’re living there, as well as paying for maintenance. I would never buy a flat, regardless of location and price.

But will they have lost more money than they would have paid in rent?

That seems totally sensible to me!

It honestly works really well. Plus, it means I get to go and experience things now - concerts, holidays, I get to live my life!

In an ideal market the cost of buying (and maintaining) a property would work out the same as renting that property over the years. Renters who behaved decently (paid rent on time, no anti social behaviour) would have the same security of tenure as those who had bought. That is the case in some countries in Europe.

The UK market is distorted - largely because the government has failed to ensure that there is sufficient housing to meet the need. There are too many small landlords who can not offer security of tenure because their business model is wrong and too many people who see home ownership as a form of long term profitable investment.

I think the market is shifting now because many small landlords are leaving the sector as a result of changing legislative and tax requirements ( a good thing if they are replaced by institutional landlords) and many home owners are waking up to the fact that home ownership is very costly in the longer term.

I have a single family member who bought their HA property many years ago. While, on paper, it is worth a lot they picked up all the maintenace costs (expensive and hard to organise), the house is being used to fund care costs (at 2x the rate the LA pays) and when they die (single parent) the estate will pay inheritance tax. As investments go, the long term return is very poor. They would have been far better off continuing to rent from the HA.