Mortgage cheaper than rent?

[limeandwater]

On this forum and plenty of other social media sites to be fair - there are a number of people who state that a mortgage is often cheaper than the rent.

It's not true is it? In fact it is quite a long way from being true.

Obviously, at the risk of being accused of trollhunting, because they are on a windup.

Starmer is a low blow! 😉

IGNORE. I quoted the wrong post!

Where an earth was that?

180k flat and nicking £1500 quid pcm in rent is a 10% yield! That's the stuff of dreams!

Similar to my DC and their DP. They were renting a one bed flat worth about £180K, for £1500 a month. They have bought a house for £325K, and the mortgage is around £1100 a month. £400 less a month, and a property worth almost twice as much.

Yeah this. I know a few people who finished paying their mortgage off at 50-60, and were terribly smug and condesending towards people (roughly the same age) who were renting from the council/a housing association, because they had to keep paying rent - even when when they were retired. (And they - the smug ones - didn't have a mortgage OR rent...)

The smile has been wiped off their face this past few years, after the renters started to get the rent paid via housing benefit when they retired, whilst having absolutely no repairs and maintenance to bother with/pay for.. And even the ones paying rent (because they have an income that exceeds housing benefit payments) are only paying £450 or so a month rent, and again they have no repairs or maintenance to worry about.

Meanwhile the mortgage-free people have been shelling out 10s of 1000s over past 4-5 years for either: a new roof, problems with subsidence, new central heating system/radiators/boilers, new electrics, drainage issues, damp issues, knotweed removal, new windows, new bathroom, new kitchen, new soffits, etc etc. And then ongoing insurances for bricks and mortar and the gas or electric system ..... etc.... (In some cases, quite a few of the above!) All included in the rent when you have social housing.

At the end of the day, many people who own their home at retirement - or thereabouts - are not necessarily better off financially than people who rent social housing!

I wasnt trying to compare them. Im just saying he could no way afford a home in Surrey so he decided to move so he could become a home owner.
A mortgage in Surrey was unaffordable.

But for commercial properties the market rent is the market rent. If the going rate is £15 a square foot in an area than you can’t just charge more because you feel like it. Or rather you can, but you’ll have a void. It’s exactly like the residential property market. Although in fact many commercial landlords will offer a rent free period to make their property more attractive, and to avoid reducing the rent because that might impact their banking covenants. They’ll sometime rent at below ‘market’ so they don’t have to carry the can for business rates either, which is a cost that also sits with the tenant if there is one, like council tax but many multiples of the cost. In some respects a commercial property lease is more akin to buying a house because maintenance and insurance is the responsibility of the occupier…

First 3 months rent free is becoming industry norm now. 6 months if they sign a 5 year lease.

All very true.

Thing it, this all depends on SO many things that I don't think you can categorically say it is true or untrue. When we first bought our house, our mortgage was roughly the same as the rent we had previously been paying (we had been renting a 2 bed property in a very nice village, moved to a 3 bed house in the nearby town). We fixed our mortgage for 10 years, so our mortgage payments continued to be the same while rent will have, I assume gone up in those 10 years. We continued to fix long term, and moved a few years ago with a lot of equity. We have now paid off our mortgage, but before we did, we were paying £600 a month on a 3 bed detached house in a very nice part of town that I suspect would be close to £2000 a month to rent.

So in my experience, buying is much cheaper than renting in the long term. But you appear to be wanting to compare someone buying a near identical house to one they'd be renting, right now, with no deposit at all, and no consideration for what happens in the following years.

Yeah, of course you did

😂😂

You do understand I was being sarcastic right?

Of course i mean increase the rent
When costs of food etc go up this is passed on to the customer ie prices are raised.
Tell me what costs go up that do not cause a rent increase?

There not but home owners especially mortgage free ones should be factoring in things like new boilers, new windows etc as these are essentials long term. I wont be mortgage free till about 62 but we had no alternative to part buy. I got told by my local council we had no chance of getting a house because we worked. At the time I was on maternity, dh had been made redundant and we had no spare money. I had to go back to work early and dh found a much lower paid job. I was appalled at my local councils attitude. They even commented about my lack of abusive language when I spoke to them. Thankfully now working families can get homes in my area again.

Yes much cheaper at first not at all ..now with 1?6% interest it's a couple of hundred bit that will go soon when we remortgage next year

No costs affect the rent going up, it quite simply does not work like that.

Depends on how you look at it. Yes I know people who are renting that get all kinds of work done free & their rent paid etc. I even have a family member that has a beautiful council bungalow & large garden in a really nice area. They now only pay a small rent on it. BUT I own mine & never have to fear being given notice & for ME, that's priceless.

I have only owned two homes. If I had 100% mortgage on them, this would have been cheaper, though not by much, than paying rent on a similar property in my area. Of course I have additional costs as the owner, but I have considerable benefits from that that easily outweigh that cost.

In one of your posts you say you've been a landlord for 29 years.
When and why have you put the rent up?
Did you just pluck a figure out of the air?
Or did you sit down with a calculator and work it out like a financially responsible person?
You are starting to sound deliberately obtuse

That wasn't me that said 29, but it has been many years.

No of course we don't work out rent with a calculator, because quite frankly our costs make no difference to what is market value.

We work with a number of agents and know the areas we let in well. The market will always dictate what we ask for.

I promise I am not being obtuse, but that isn't how the rental market operates. Market rate will always dictate.

I think it's true for London and the area. Our 3-bed flat rent was 1600 monthly and our mortgage on a 3-bed semi is 1300.

totally depends how much deposit you have. A lot of people move area when they buy as well so cannot make a fair comparison. Our mortgage is the same as our rent was but we own a 3 bed house in Sussex, and rented a 1 bed flat in zone 2 London!

But surely if you made an improvement to a property you would increase rent as long as it was within the market rate.

The market rate is a window between £X and £Y
If you're not able to increase after an improvement then you must already be at the top of the rate. Or you'd be under market value

I mean to an extent what you say is true.

If you have a property that lets say for arguments sake rented for £1200 in poor condtion, £1400 in average condtion, and £1600 in good condtion then yes of course you would try and raise the rent if you improved it from average to good.

my Mortgage is £664 a month, 3 bed terrace. Neighbours all rent and average £1400pcm!