Thanks all for your contributions to this thread. I've just re-read this post and wanted to warn you at the beginning that it's long and hopefully not too waffly, and hopefully thought-provoking in parts. If not, well, at least I tried.
I'm amazed that not one person has mentioned the glaringly obvious insecurity of buying. Within a 12 month period DH and I experienced the birth of a child (bringing in the necessity for expensive childcare payments), plus BOTH of us were made redundant. This all happened a few months before the recession 'officially' started, so goodness knows how many other people were similarly affected once our economy hit the fan. I found it extremely hard to find work; DH started his own biz and so we were earning very little compared with pre-baby. Luckily for us we were able to use our redundancy compensation to pay our mortgage, as well as making use of a mortgage holiday. We then sold up a couple of years later and are now renting.
I still remember the headlines about home reposessions from the last financial crash, and I daresay there have been a fair few of those this time around. If the bank reposesses your home, I assume they also take your deposit, leaving you pretty much in the shit, right? So how does this make home ownership more secure than renting with a good landlord? I haven't even mentioned death of a partner, sudden illness or accident, flooding or other 'act of God' - and insurance companies aren't guaranteed to pay out when we need them, now, are they?
So I'm unconvinced by the argument that renting is more insecure than buying - I think if you are wise and choose your landlord carefully (and ABD has given me useful advice about this in the past - cheers, mate!) you are in a better position as regards security than if you don't choose your landlord carefully. As far as the security of renting vs ownership...I'm not sure one can say for certain as it appears to be a question of perception rather than fact.
The investment issue is more significant, and on the one hand I agree with expat when she wrote that the basic human necessity of shelter has, in UK culture, been turned into a money-making venture. There are so many ways in which we as humans have become commercialised in the post-War years, and I see so much in our society that is rotting as a result of that. Typically, we say these days that if you can make money out of something that is enough to legitimise it. But when we take that argument through every aspect of life where people make money (loan sharks, sweatshops, drug trafficking, child prostitution - I really don't need to expand here, do I?!) we see that this argument on its own is puerile and devoid of all thought.
On the other hand we live in one of the most expensive countries in the world, and we need to be realistic about financial management for our future as well as for the present - and, in the light of the recession, we realise all the more how prudent we have to be in our choices of where we place our money. Investment in property is more likely to pay off in the long term than investment in a company. Unless, of course, with the inevitable deterioration of the global climate, we find, like the people of Cockermouth, that all of a sudden the flood damage status of our home has changed and it no longer becomes sellable.
To come back to the issue of the morality of how we make our money, clearly buying a home is not on a par with drug trafficking! I don't have a problem with people buying a home for themselves as an investment (I have a serious problem with people who do this purely as a money-spinner, because they price 'normal' folks out of the market, seriously restricting their ability to put roof over their heads). So the investment issue is a significant consideration.
ABD - I like your approach to calculating costs. We're in the SE, so buying property is expensive, and I daresay that renting would give us a better home for less money than buying. We are currently renting a 3 bed house for just £100 more than our previous 1.5 bed flat in London - with a good landlord. I shall work out the figures your way!
So to sum up (if you haven't already got bored!) so far I'm torn between renting at potentially lower cost with a good landlord and buying with the potential for no housing costs plus a good lump sum at the end.
My goodness, has anyone actually ploughed through all this lengthy waffle?