Long term Renting? What do you intend to do in the future?

[Mrspitt3]

I'm horrified at some of my friends that have been renting for 20+ years and are in their 40s, and most don't Paul into a pension. I'm mid 40s and got on the property ladder when I was 20 and had a partner (I know prices have changed and I was working didn't have uni fees etc, but had no help from parents). I'm curious to know how long term renters intend to keep a roof over their head when they can no longer work due to age??

When people retire and they are still renting then they will have to hope that their state retirement pension and their occupational pension ( if they have one) are enough to still pay their rent. if not they will have to downsize and rent somewhere cheaper / smaller. if they are below a certain income then they will get help form housing benefit but as a couple or single person would only qualify for the one bedroom rate of local authority housing rate.If you still have kids living at home then obviously they will have to chip in with the rent too ! if you've never managed to buy but have significant savings then you won't get housing benefit and would be expected to use your savings to fund your rent until your savings drop below a certain limit. We are fortunate , we lived like paupers when our kids were young, overpaid the mortgage and it is now paid off. One of my biggest worried was housing insecurity or losing our house so we made it a priority and were lucky enough to have reasonable paying jobs which allowed us to. We are also lucky that our jobs are secure, neither of us have ever been made redundant and we haven't gone through a divorce. Neither of us have had to give up work to care for elderly parents ( yet !) or through illness , although mu dh has a long term illness which may mean he needs to retire earlier than normal.

Another thing to point out is that if people now become ill and unable to work ( I see this a lot in my job) say in their 50's or early 60's and they still have a mortgage, from April next year there will no longer be any help to pay the interest on your mortgage as there currently is. Well you will get help but it will become a loan which will have to be paid back when the house is sold . So really anyone still paying a mortgage could be hit hard by this change in the benefit system. so if you become long term ill or unable to work and still have a mortgage you at in trouble really. At least if you rent then you get help from housing benefit. I see a lot of people in my job who have never saved, live beyond their means, a lot on interest only mortgages, and when they get ill and can't work they really struggle.

Baby, yes I was just reading that the pensioners help with mortgage payments will be stopped from next year. I had absolutely no idea the government paid out on that.

I think a lot of long term renters think there will be some help in the future but I'm not so sure there will be

I don't know anyone who thinks this.

Most people don't rent out by choice but out of necessity, but this comment suggests that they are deliberately putting themselves through hardship to take advantage of future handouts.

Or is you question 'why aren't long-term renters scared about their future?' Because the answer to that, in most cases, will be that they are, but crying about it isn't going to change things.

Be thankful that you're all sorted and butt out of other people's business.

I suppose if the government weren't paying the mortgage interest for pensioners they would be paying housing benefit instead so either pay they have to be housed. I guess the difference now will be that all that interest paid by the government will have to be paid back from equity either when that person dies or sells up. I guess the government thinks that many pensioners will choose to sell up then they will have a sum of equity meaning they are not entitled to any housing benefit so it's win win for the government.

so long as I have something to leave my kids (which I do, in the form of investments, my business etc) I'm not stressing about my own long term future

I don’t understand this. When you stop earning them I assume you have a big enough pension to pay for your rent through retirement? You can’t see how it’s dead money and the money you’ve paid in rent over the years could have been an investment in property which would have escalated in value? And you eould no longer have to pay rent into retirement?

I also don’t understand how you think buying a house is funding someone’s retirement, but paying a private rent for years on end, isn’t ?

In fact your whole post makes no sense.

What scares me more is that we all depend on "the government'" to help us pay if we can't afford our accommodation, but the way things are going with Brexit and the welfare state, all the help is being gradually taken away and actually as a country we may not be able to afford it. It is proper scary and the government should be planning that.

I don't know what I will do in the future. It's terrifying. Shared ownership still means paying large amounts of rent and service charges each month that I wouldn't be able to afford on a pension. I'm mid-40s, and it's a constant worry. I wish i could have got on the property ladder earlier, but I couldn't. People judging me for this doesn't help - i'm as horrified as they are about the prospects. I may not be able to live into old age as a result, and that's a scary thought, but it's what some people in my circumstances have to consider.

Picklefish - You would get help in the form of housing benefit if you could no longer afford the rent part once you retire.

brexit may well lead to a drop in property prices such that owning and renting are both more affordable

surely as renters you ARE currently funding someone’s ‘comfortable retirement’?

Not so much. The owners of our property are already extraordinarily wealthy. Our annual rent probably pays the water bill for their bidets. It’s a rounding error in their empire. Clearly, house buyer or renter, your money is going to somebody you may or may not deem worthy of it. My point has more to do with value for money, which our landlord is providing. We pay a reasonable amount for a fantastic place to live. We’re lucky in that regard. We wouldn’t be happy paying today's greatly inflated, dare I say cheeky prices for poor to ordinary accommodation. That, to us, would be dead money.

We wouldn’t be happy paying today's greatly inflated, dare I say cheeky prices for poor to ordinary accommodation. That, to us, would be dead money
I agree, buy a place now and you could be buying at the top of the market, when the bubble bursts you will lose a large portion of your investment

We've never looked at a house as an investment. We think "will we be happy here?"

I'm mid 40s and got on the property ladder when I was 20 and had a partner (I know prices have changed and I was working didn't have uni fees etc, but had no help from parents).

Well bully for you

You've answered your own question. You had a partner and no uni debt.

What if you didnt have a partner and did postgrad education that there is no funding for? Couldn't afford to buy alone and then property prices became unaffordable in London.

I'm close to 40 and choose to rent a house worth 750k for about 5 years now. I could have bought with a 50% mortgage if I cashed in all my invesments and savings, but I wouldn't be much better off overall. Property isn't the only way to save for retirement.

There is dead money in buying too. Tax, interest part of the payments, legal, marketing, your own time, ongoing maintenance, insurance etc. And cost beneifts to renting, especially if you live in a fully managed, well furnished property.

A deposit reinvested in the stock market, would beat unleveraged property in most cases. People say stocks are risky, but leveraging up on property debt adds risk too. I do not think there will be a crash in housing, but at the same time, I doubt stocks will crash in isolation to property either. If there is a general crash, I'd rather be in stocks so I can get out quick.

I rent in a prime area and yeild is quite low, just over 2%. Prices are fairly flat too. The papers are full of stories of rich folk preferring to rent instead of buy. I'd agree the sums are a bit different sub 250k.

I'm hoping to retire at some point in the next 10 years. And will probably switch location. I don't want to risk not being able to sell my house due to slow markets etc. I value liquidity.

There is value in having flexibility and liquidity, in case you need to move for work or personal reasons. I work in business so having spare cash to invest is always handy. Thre freedom is worth paying for my in my case. The idea of having to possibly needing wait 6 months to move boggles my mind. But not everyone cares about this of course.

I might buy a property in the next few years, but not solely for financial reasons. I could retire without one. Brits have a bot of a fetish for property!

@lassingd 👏🏼👏🏼👏🏼👏🏼

Yes to everything you’ve said. I might not own a property but I have invested any left over money in to a decent share portfolio and plan to save to invest in early stage start-ups (risky but potentially worth it).

I also second what you say about some rich people renting as my best friend and her husband sold their house last year, the amount of money they would have paid in stamp duty alone on a new property at £2m+ covers 3 years of rent at about £5,000 a month. Their rental house is GORGEOUS and they’re in no rush to buy back in to the property market as they see London prices falling over the next 5 years or so. I’ve also had a few friends in negative equity (outside of London) which is a position no one wants to be in.

In answer to the OPs question though - the state will have to intervene so we don’t have old age renters becoming homeless and living on the streets. If you’re horrified at this prospect now, you wait till my generation (where I suspect a greater percentage will end up long term renters than home owners) retire, then we’ll have a real crisis on our hands.

I should answer the question too!

I think we will likely see much better rights for renters in future. Many countries enjoy renter perks like rent control, 5 or 10 year tenancies. And I think it likely UK will follow suit. Germany, Switzerland etc all have much stronger culture of renting and Brexit paradoxically will I think hasten our alignment.

Also basic income is increasingly a hot topic. There is talk of an NHS style coverage for other basic human rights such as housing and internet. AI is likely to make or break this.

Back to me.... I don't have a pension myself. Or a house! So OP must be fuming. But I just don't have a great deal of hope in either in either property or pensions in my familie's particular case.

What Jimbob said. The undercurrent is there no matter how much you deny it, you're as easy to read as a open page with the 'I didn't have holidays abroad' and secondhand cars comments. I'd have more respect for a poster who just came right out and said they wonder because they feel like they'll be personally ripped off by renters in retirement and think they're in that position because of lattes and foreign cruises rather than beating round the bush under the flimsy pretext of altruism. Bullshit stinks.

expat I had tried to be polite but you've nailed it 👏🏻

Never one being as smart as you, if only I was as old as you.

I'm about ten years younger, and I earn a good salary. I can't afford it buy a property without giving up my job and moving elsewhere. Something I'm not likely to do - it'd involve a pay cut too.

I am furiously saving for a deposit large enough, but house prices don't stop increasing.

I don't understand why a lot of renters on here come across so defensive and angry. And go in about not judging when the most judginess on here has been directed at the OP...

Renters are offered a steady diet of condescension and patronising advice, harebrained government schemes that inflate prices further, and clueless ramping stories in the media that are somehow supposed to make them feel better. I can’t imagine why they’d be angry.

JOJO
I've stired emotion, I accept that, I'm really fascinated by all the responses about what future plans are thou so thankyou for sharing your plans. For the record I'm not sitting here gloating like some suggest. I'm broke too due to my life decisions, I also dealt my life cards as and when they arrived. I'm proud that I prioritised paying a mortgage and kept a roof over mine and my sons head whilst being a single mum, I signed away any rights to my ex husbands future (sizeable) pension due very soon so I could pay him slightly less than than his 40% equity. I did what I thought was best at the time, house prices could have gone the other way, all sorts of factors could have made my decisions into bad ones. After my divorce I was earning 15k part time and paying £700 month mortgage I just prioritised paying that. I totally understand the housing market has changed and people make life choices to live and work in the capital and rent. I chose to plan for the future rather than the current who knows I may pop my cloggs and not benefit from an easier retirement. Swings and roundabouts of life I suppose.

I don't think homeowners have thought about maintenance and repair of their properties in their old age- how will they get paid for? No housing costs and a pension of say, £1000 a month, how are you going to replace the windows at £5k (today's prices) how will you replace the boiler? Get a new kitchen? Replace the roof/ render? New driveway?

I'm a homeowner who doesn't have an answer to this btw

I do agree the govornment needs to do something, private landlords are getting richer at the expense of a future Phenomenal HB crisis