Renting is Significantly Cheaper in London

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Renting is significantly cheaper than buying in prime Central London. Everyone says that buying is cheaper.

A 1 bed flat in our daughter’s building now rents for £2,800. It includes 24hr concierge and a good gym. The landlord pays the service charge. That means total rent is £33,600 for a year.

To buy, it would cost about £825k. Ground rent and service comes to £8,400 a year. A mortgage on a 10% deposit would be about £4,500 a month.
So £62,400 for mortgage and service charges. Plus any upkeep.

If you buy, you eventually have an asset (and you can sell anytime, usually at a profit).
Renting ensures someone else eventually owns the asset.
It’s a very short term view to decide buying property is not worth the outlay.

Actually, prices have been stagnant since around 2016 in Central London. Aware this is a very particular market. There are many ways to invest and property is not always the best.

In general renting vs. buying is a toss up depending on both housing and stock market. This is IF you invest your excess and not just let lifestyle creep in.

Why a lot of people say it's cheaper to buy is because being forced to invest into their property avoids that lifestyle creep.

Flats in London have been tricky price wise. I wouldn’t buy one now tbh.

since Brexit

Why a lot of people say it's cheaper to buy is because being forced to invest into their property avoids that lifestyle creep.

Good point

Most people buy a place to call home. Renting is for losers in the long run.

Renting is for losers in the long run.

lots of rich people rent and it’s very normal in other countries

Yup agreed. Rent has still been cheaper for us (we are buying a house now for the space).

If someone's in prime central London, they're loaded so can rent or buy and make it work for their own needs and advantage. If saving money was a priority they'd go elsewhere.

Yes he only reason why we (EU Immigrants) even buy here in London is because the renters rights are non existent and private landlords (and their housing stock that rivals 3rd world countries) try to take advantage of you at every point because they can't risk manage.

If we were to move back we would be renting the same house/flat for the rest of our lifes and put everything into index funds.

That is a great snapshot. But there are inflationary elements too. When we bought the mortgage and rent were similar. But the value of the house doubled, rents doubled too. Salaries haven't.
The mortgage went up a bit recently, but is now half the cost of rent. And in a few years will be mortgage free.

So in the rising market of the last 20 years burying was cheaper. A falling market is different though.

If you have the income to rent a 1 bed then your view of the rental market is probably quite narrow.

• a 1 bed for £2800 (no edit function on the app)

Idk why people are so fixated on London when prices across the country have gone through the roof.

I watched rents for countryside houses go up 40% in two years after COVID. I had agents asking me to submit closed bids for rentals, FFS.

Our rent is 1600 for a 2400 sq ft 'luxury' (there are many issues) house, and 18 months later, she is trying to rent another of her houses which is 1300 sq ft (without the the absolutely vast double garage and nothing fancy to boast about) for the same money.

It's not just London that's unaffordable, it is a country wide problem.

Our rental has major flaws and winds us up every single day, but would probably cost 600k to buy, even in the current market.

There isn't even anything nice or useful nearby (but the views are pretty).

are you in west berks by any chance, sounds like a terrible landlord I had once there

This is largely totally irrelevant to anyone just starting out in their careers, relationships or with a young family, because both are completely out of reach. And when you look at what IS in reach, mortgages are cheaper than rent, generally

No, north west, and actually she is an exceptionally good and responsive landlady whose books show 3m + in the bank up by 1m yoy). You don't get that kind of wealth by helping the community out with reasonable rents.

My jaw is still recovering from hitting the floor though. When you include the really valuable garage space, I think the rent works out to be twice ours, 18 months later. And it is really ordinary and boring versus ours which is quite fancy and luxurious to the casual observer (who does not know about all the day to day issues).

I like her as a person (I see her a lot) but the greed is more than a bit distasteful.

• average rents fell in our county last year.