Why do people prefer to rent rather than buying a house?

[Cocktailglass]

Genuine question, AIBU to not get that in the long run you pay off mortgage, own your home to pass on to your DC and rent, especially with the high rates now, is dead money?

I do of course understand getting a mortgage is harder now and house prices, I'm talking about people who have been renting all their lives.

Unless having rent paid for on benefits, I don't get why anyone working hasn't got on the property ladder, less to pay every month with a long term mortgage, eventually nothing to pay unlike rent.

As I said, not talking about now, but decades ago. You showed your earnings, were offered the best deal of what you could borrow, bought your first home within these means, a starter home with the intention of paying far less for payments than rent, property goes up in value, you buy your next home without too much of an increase, still less than renting. So the upgrading continues and initially you just get what you can afford to get on the ladder.

Renting does give you the benefit of any problems being the responsibility of the landlord but all depends on how good they are! With council properties in a much better position as houses are upgraded and issues dealt with (hopefully) more quickly.

Plainly speaking, you work, give a significant part of your income to someone else just to live in their house, pay bills and CT. What's the benefit of this rather than knowing you're paying straight into a loan for your own property, a financial asset, it's yours? Xxx

They don’t - people who say they do are saying it to make themselves feel better about not being able to afford to buy.

Cheap-as-chips properties are not generally in nice, welcoming, family-friendly areas. That's just a fact. So yes, the vast majority of cheap properties will be in areas that are shit holes. Why are you refusing to accept this widely known piece of knowledge?

There is an economic arguement that capital tied up in house you are living in is dead money that can only be realised when you downsize, with an aging population there is a risk that eventually the number of people downsizing will exceed the number upsizing, so prices will fall.

Makes sense @Somersetbaker ^

There are positives to renting for some however those positives run out very quickly when you retire. Ticking time bomb, people struggling to pay rent and everything now when working, when retired they definitely won’t be able to afford the rent and won’t have any asset. Those on benefits will be ok but those with any savings will have to exhaust those savings before they get help. At least if you can buy you have some security, it’s very hard though.

So every time you've moved home in your life, you've kept the previous home because of an emotional attachment?

How many homes do you have now?

There's no evidence to suggest that's a real risk. Lots of areas are forward planning and building accommodation for older people looking to downsize.

How is improving your home “dead money”?

We're back to entitlement again.
Terraced houses in cheaper areas used to be classic first homes. You bought one, got on the ladder, then bought what you really wanted a few years later. Before you had children.
Newsflash: if you want your first house tk be a three/four bed in a better area, it will cost you more. It was ever thus.

Even with a “fuckload” of interest (my rate is all of 0.75%), it’s still a hell of a lot less than a “fuckload” of rent would be for a property similar to mine.

Don’t the people who consciously choose renting (privately) over buying if they could buy, ever worry about paying the rent when they’re 75? That was the thing that scared me most about not buying a property, the never ending rent.

You keep saying back in the day, talking about the past. Lucky you for buying a house back in the past. I bet lots of renters today would love a time machine to pop back and buy a house cheaply.

They did exist - and caused a whole heap of trouble during the 2008 recession.

I’ve lived in 2 homes, my childhood home that I live in again now and the other home I lived in for over 20 years, and I had memories there but no emotional attachment. Hence why I’m back here!

I understand that people in care homes don’t need another home but it’s not always that simple in reality

Well in that case they will have to go back to buying a less-than-perfect house in a cheaper area and do so before having children then, won't they?
It's comparing apples with pears

@Zov thats not entirely true though - North England, national park area certainly not a shithole where i am and im comparrison to what i see down south we are ‘cheap as chips’, there are shit holes within the region yes but then the prices are cheaper than the average prices i indicated

There's plenty of McCarthy Stone type rip off properties to move to, but who is going to buy your 6 bedroom detached with a large garden? The point remains that you have a lot of capital tied up, that could be producing an income for you in excess of any rent you may be paying and benefiting the overall economy. A further argument is that property ownership reduces mobility in the labour market, if you rent you may be willing to move for a better job, if you need to sell a house then buy another it's not as attractive a proposition, particularly as you may find that you actually don't like the area you've moved to.

This is very interesting..for me, buying and locking down my mortgage at £1250 (£150 service charge) a month is what enabled me to raise a child in London. Tiny 2 bed apartment but we are only having 1.

I think if we were higher income and had more assets and larger savings and wanted a big family home we would do what you do in London cos a decent house in my area is £1.4 million (as opposed to 400k for my flat) which atttacts 80k in stamp duty plus mortgage interest. Only costs 4k to rent. On the other hand my flat costs 2k to rent. If we had a second child and stayed where we are it would probably make more sense to rent (due to the larger space we would get for our money)and later buy a small 2 bed flat to retire in (no rush as prices arent going anywhere).

It is.

Nah. I bought in London at 26. 2 bed 1930s flat. Most london ftb buy this. 400k with 58k deposif

6 years before i got pregnant and had my child..we have had pay raises, overpaid my mortgage by 30k etc. We would never be able to move and i remember telling my manager when i bought it i could never move unless it is to buy another flat. But chains break down all the time so i have decided against that kind of stress.

Still having a £1250 mortgage in London is pretty good and we arent having more kids. Still most people wouldnt like to be tied down like that. I fixed till 2031.

We rented for 14 years prior to buying 18 months ago.

We preferred the flexibility it gave us, as neither of us had the most secure jobs ever.
Ultimately, we were priced out of the rental market. The flat we had was very affordable when it was £525 a month, but much less so when it was £850...
We were very lucky, and had a good nest-egg of money that my parents had squirrelled away and invested well for many years, plus an offer of a substantial cash gift, that was waiting for us when we ultimately made the decision to buy.

Unfortunately, most people are not that lucky.

I rented for 20 years, by choice, in three different countries.I rented in London in my 20s, a lovely little garden flat. I could have bought it for 65k, but I didn’t, although I could have afforded it . Got married and had a baby so wanted a house, we moved to Ireland and rented a four bedroomed house and started looking to buy. We could have borrowed an absolute fortune and house prices were zooming up every month. Thankfully we took a step back and didn’t and six months later the property market crashed, house prices dropped by 50%! So many people lost everything, there were a lot of suicides. We thanked our lucky stars we didn’t buy, especially as my husband lost his job in the recession. After a year or two of that we emigrated to Australia and rented a beautiful house near the beach. We stayed there a few years to make sure Oz was the place for us, and then bought a house, a four bedroomed house near the beach with a pool. I’m bloody glad I didn’t buy anywhere before, although last week when the dishwasher died and the retic sprang a leak we did say renting had its advantages! I am very happy to be a house owner now, but before we moved here renting was the right option. Not everyone wants to put down roots early, personally the thought of buying a house in my 20s would have been awful!

I rent a council property. I’ve never had a high earning job and I have been a single parent for over a decade, so the only income has been from my wage. It would have been impossible to save for a deposit, meet my bills and care for children. Even if I had been able to get a mortgage I would never have had a buffer big enough for property repairs.

The benefit for me is that this house is as close as owning a home as I’m likely to get. I don’t have to move unless I choose to (or cause a nuisance) and I can decorate and make it my own but with the big stuff dealt with through the housing association. Having used the mortgage calculators you find online the max mortgage I could get on my income is about £90k which isn’t going to be buying much! I don’t trust the shared ownership schemes as I can’t see what the advantage of them is. You have to pay rent and a mortgage and service charges and all the property maintenance.

The disadvantage of renting is I will have to pay rent forever and I have no assets to leave my children.

My daughter and son in law have now lived in four different countries since they met and expect to move around again every few years. They have never considered buying a property seriously, partly because of this. The proportion of home ownership is also much lower in the other countries they have lived in than here. If they were to move back to the UK for a long period of time, it would be to London where it woukd be difficult for them to afford to buy. They are also strict Muslims and so would not be able to have a conventional mortgage; although Islamic mortgages are available here they are not commonplace. And at the end of the day, they will inherit our house, which will leave them comfortable for the rest of their lives.

I married at 22 (no student loan debt). Lived for a year in germany with dh who was doing masters. Moved back with dh at 23.

Lived with MIL until 26, dh was 29. Bought 2 bed flat in London in 2019 at 26. 58k deposit for a 400k flat. We saved 60k in 3 years.

No cars (to this day there are no cars).. we never travelled except to see family in asia but post pandemic (we bought in 2019), we travelled intensively for 2 years until i fell pregnant, spent around 20k. Sounds a lot but a 2 bed flat in my area is 400k..a house in london or anywhere in neighbouring areas is 800k to well over a million. Moving to a 500k property (a slightly larger 2 bed flat) would attract 15k in stamp duty. A 500k house in a commuter town basically means 3 hours of commuting ans 10k in season ticket costs, how do you do that with a child and no backup childcare.

So my 2 years of fun is basically equivalent to just stamp duty. I have my 1 child in my flat and i bring him to softplay so he can have more space to crawl around. Much cheaper than moving and paying stamp duty and higher mortgage..also got zoo membership for extra garden space.

The reality is property is so expensive that anything you do is basically a saving compared to it and it is what makes our flat work. London is my garden in addition to our communal garden. We would never be able to afford to move to anything larger than a 2 bed flat. But we do have a £1250 mortgage which is the equivalent of renting a room in London due to our 30k in overpayments and 40% equity.

I was able to save to buy but my flat wouldnt work for most people (families with 2 kids) or present a large downgrade to their standard of living. So i can see why so many people dont bother to do what i did.