Persuade me that I should buy a flat

[Gwenhwyfar]

I'm middle aged and now is the first time that I think I MAY have enough earnings and savings to buy a small flat. I keep reading on here things like 'nobody would choose to rent if they could buy', but my problem is that I understand the arguments about money down the drain, having somewhere to live in your old age, etc., but don't actually want to buy.
I don't want the stress of renovations etc. and I don't want the commitment. I'm not in the Uk and I would have to stay at least 5 years in any home I buy no matter what happens in my life or pay back a huge stamp duty discount. Legal fees are enormous here so buying is a huge responsibility.
My colleague suggested going to a mortgage broker to see what I could get, citing the example of her aunt having to move into a tiny studio because she doesn't own her home.

You don’t have to buy if you don’t want to. The question is will you be able to afford to rent somewhere when you retire? If the answer is yes then it’s fine.

Who wants to spend a big chunk of their pension on rent?

Yes, I know.
But also, could being an owner in old age tip me just over the limit for additional benefits?

We don’t know about the benefit system where you live.

Neither do I for pensioners. It's generally more generous than the UK but more contributions-based. I could be retiring in the UK though.

We don't know what the benefit system is going to be like in the UK in 10/20/30, years' time either. There will be increasing numbers of retirees who will be renting. Maybe provision will be made. Maybe it won't. I guess OP you just have to make a decision that works for you now in the knowledge that you can't predict the future. One thing I do know though is that the leasehold system does have a tendency to hammer people who own flats in England with all the charges, whole block refurbs and the like. If you're going to take on hundreds of thousands worth of mortgage do it on a freehold basis at least.

It's hard to comment when you're subject to different laws

you mention renovations, what sort of things are you thinking of?

I am in a block built in 2000 and have done no renovations, neither did the previous owner.

in England, I would say don't factor in benefits, but do factor in how much rent will increase. Perhaps the same is applicable where you live?

I don't think the leasehold system is the same here, but I still here of people sometimes have problems with the management companies.

cross post
yes but at least when you own the place, there's other things not to worry about. Mostly mgmt companies just want their fee - but mine were actualky very kind when I was ill and offered to drop shopping in, so you never know.

Don’t buy a home, you obviously don’t want to.
I am pleased I did, I bow have the option to free up some equity by downsizing or moving somewhere cheaper. I like the idea of renting somewhere in different country or continent each winter for a few months with the equity I’ve built up.

Oh I see. I guess what you really need is a resident (possibly bilingual) financial/mortgage advisor familiar with the UK regime for long term what-ifs should you need to relocate (tricky post brexit!) who can explain clearly to you the financial and practical implications of anything you might take on. I wouldn't enter into any kind of long term financial arrangement in a different country without expert advice - contracts etc are difficult enough to interpret even in your own native land but there's another level of obfuscation outside it, even in an English speaking country.

Renovations would be because anything I would be able to afford might need them and because of forthcoming 'green' laws that will require improvements to many homes, for which I believe loans will be available.

As for rent increasing, if you stay at the same place here, rents can only increase with inflation and wages also increase with inflation. Rising rent would be a problem if I wanted to move and in old age I suppose if I'm forced to move, as happened to my colleague's aunt.

"for long term what-ifs should you need to relocate (tricky post brexit!) who can explain clearly to you the financial and practical implications of anything you might take on."

I am thinking of going to see a mortgage broker who would at least be able to explain the Belgian situation to me.
I know I'd have to keep and live in the flat for 5 years. I don't see why I wouldn't be able to relocate back to the UK after that though as long as I was able to either sell the flat or rent it out.

"Don’t buy a home, you obviously don’t want to."

Well, I'm interested in exploring it, just scared to jump right into something I might regret.
I also don't have some of the usual renters complaints. I've always been allowed to do light decorating if I'd wanted to and I'm not particularly interested in that kind of thing.

What's the security and cost of rental like where you are?

People in the UK are adverse to renting because it is expensive and insecure - you can be kicked out on a whim, and there's lots of fees to move, as well as rent that is usually more expensive than what the mortgage would be to buy the property.

Whereas in other countries, renting is a lot more affordable and secure, so there's a lot less of the pressure to buy.

You can compare the cost of paying rent with interest on a mortgage, both is 'dead money' but it facilitates you having somewhere to live.

But as a homeowner, you'd be faced with the cost of maintenance etc, although you could have costs as a renter, and these could be significant, eg in Germany for example, I think it's the expectation that renters are responsible for things like kitchen units, but this is a reflection of the security that a tenant has - you can live somewhere as long as you like and be confident that if you install a kitchen, you'll be able to live there long enough to benefit from it.

Renting is very secure where I live. You can't be kicked out. As I mentioned, rent can only be increased according to inflation so it can also work out quite cheap if you stay in the same place for a while. The problem would be if I was old, living on a pension and the landlord takes back my home - you can be evicted with 6 months' notice if the landlord uses the home themselves. Then I wouldn't be able to afford rent anywhere else. Even though tenants are protected here, people are just as obsessed with buying as in the Uk because they consider the pensions to be too low to live on and pay rent as well.
Having said that, I've rented in the UK too and never had problems.

I'm going to phrase this really badly but the movement of wealth is all about assets.

The elite are trying to make everyone else become a world who never own anything and rent constantly.

Music, book, TV, tech, cars all effectively paid for month after month after month and we never own anything.

Rent is just the same but on a far bigger scale and leaves the person renting far more vulnerable. (This is with a very UK perspective when it comes to rent of course)

So buy. Own an asset. You could always sell.

I realise this sounds a bit conspiracy theory-like. It's not meant to.

I just realised the other day that the transfer of wealth seems to be from people who own very little bit pay for it every month to people who own SO much.

People used to buy DVDs (an asset with very little value I realise) but they could then watch the DVD whenever they wanted. Now with streaming movies get removed from channels meaning even if you paid for streaming you can't always watch what you want.

"as a homeowner, you'd be faced with the cost of maintenance etc,"

I'm a totally impractical person so would need to pay people for every little thing. The responsibility and risk of this scares me.
As a tenant here, my kitchen is fully equipped, although not all are, and I don't have the usual boiler maintenance cost that tenants have because I share the boiler.

"So buy. Own an asset. You could always sell."

I wouldn't be able to sell or let it out for 5 years.

Renting is secure here while you work. Once retired it's obviously not as good as owning.

I get your point about owning and one thing that bugs me a bit is how so many old people are actually the richest in society as they own their homes outright, but get all the discounts whereas working tenants have to pay full price for everything.

You could always keep renting and concentrate on building an asset by saving/investing.

I don't know what is available where you are (Belgium?) but in the UK, you could drip feed into stocks and shares ISAs using somewhere like Vanguard and build up an asset that way - even if you can't afford very much, a decade or two of saving will compound and should increase in value. Then it can be used towards a home later or to provide an income.

I get your point about owning and one thing that bugs me a bit is how so many old people are actually the richest in society as they own their homes outright, but get all the discounts whereas working tenants have to pay full price for everything
This is because they bought a property and now own it outright. If you want to be in rich pensioner group you need to buy.

The only way my DH and I have a chance of a (probably low end) comfortable retirement is because we'll pay our mortgage off before we retire.

We don't have a hope of security unless we are able to do that.

My Dad in his 70s still has a mortgage. He'll never pay it off. He'll have to sell and hope to clear the mortgage then.

But he'll have no where to live at that point.

"Then it can be used towards a home later or to provide an income."

I'm middle aged so I think if I'm going to buy, it has to be now or very soon and with a 20 year mortgage.
I have heard of people investing instead of buying a home, but I wouldn't know where to start. Stocks and shares seem too risky to me. Also, there would only be the downpayment money to invest, whereas if I bought I'd be investing in my own asset with every mortgage payment.

May I ask what went wrong with your DF's mortgage? Would he be better off if he had never bought?
I've spent some time in the past on benefits and another worry is that homeowners get nothing towards mortgage (maybe something towards the interest?) and tenants get housing benefit.

Bad advice with mortgages. Second marriage break down. Debt. Bad choices with money in the nineties and noughties.

Carrying an alcoholic second wife which led to debt, then getting custody of their child but no maintenance.

If he'd listened to my advice he'd have downsized a couple of years ago and be mortgage free and securely housed...he doesn't listen to me though!

He'll sell, clear his mortgage and have a small lump sum (getting smaller by the day) and this won't be enough to buy somewhere else. 2 years ago it would have got him a 2 bed flat.