Buying vs Renting in London in your 20s

[Chickensaladandchips]

Read so much on here about how people “bought their first flat in their early 20s”.

But for many people buying aged 23 or 24 in any major city doesn’t make sense. For others it will. Do you think it’s better to rent or buy in your mid 20s?

Kind of a moot question. What was right for a different person at a different time might not be the same today.

In a pure financial sense the decision has rapidly flipped over the last few years.

At 0.25% interest rates, owning a property was cheaper than renting.
At 5% interest rates, renting a property is cheaper than owning.

This is before the non-financial benefits to owning. Not being kicked out is a plus, but that really depends on personal mobility, projected time of tenure and availability of alternatives.

If you're asking the question today at the current prices, then no (specifically referring to London). But with different parameters the answer could be yes.

Depends how settled and secure you are in your life and your job.

If you have a long term partner in your current location, can afford to buy, plus a job which you love or a clear career ladder with plenty of local options ahead of you, then buy.

If you might want to move elsewhere in a a couple of years for career or personal reasons then probably better to rent.

There aren't many 23/24 year olds who have any chance of buying in London. Affording rent is hard enough, let alone saving for a deposit.

I think even with interest rates, mortgage would be mostly cheaper than rent in London but compared to 20 years ago (when I bought in my 20s), it's near impossible to save the kind of deposit required.

I think when you’re young, building a career, and aren’t necessarily sure what turns your life is going to take, the flexibility renting offers has many benefits. I did buy my first flat in my early twenties and there were points where it was a millstone: when my first graduate job let me go because it turned out that it wasn’t the right role or industry for me and I struggled to pay the mortgage; when it needed major works which depleted all my savings and I had to borrow the remainder from my parents, because I still didn’t earn a lot; when I met my first serious partner and we decided we wanted to leave London - but I couldn’t find a buyer for the flat (because recession) and the bank wouldn’t give permission to let. It was also pretty far out and in a part of London MNers still call a stabby shithole (though I liked living there) so my friends didn’t visit that often.

It all worked out in the end, and being childfree I’ve still got all the same freedoms and carefreeness I had in my twenties - but people who want a family really only get the opportunity to be young and carefree once, and if you don’t take the opportunity then to rent in parts of London you’ll probably never afford to buy in, and don’t have the freedom to change jobs, take a sabbatical, chuck it all in to travel the world for a year etc because of your mortgage, I think that can be a loss.

We bought as newlyweds in London in our early 30s, about 12 years ago. Financially we could have bought earlier but it wasn't the right time for our life stages, there were other factors involving visas, employment and our relationship on top of the finances. When we did buy we had a large deposit as we'd been saving individually for 10 years, some of it had been invested so it had good returns. When we were renting, part of that time was renting a room in a houseshare so not as expensive as renting an entire flat, and some of that time was in a very cheap rental so the usual comparison of rent vs mortgage didn't apply.

It's worked out well for us, 12 years on we're now in a 4 bed house in zone 2, we have 2 dcs so we're happy to stay here until they leave home.