Is it better to rent or to buy your own home?

[MerryXmasMrsHenry]

DH and I have been discussing whether to go back onto the property market while we still have a deposit or to just go all Continental and rent long-term instead.

We've only been renting for 6 months and would love your opinions on the pros and cons of renting and buying.

TIA!

Have reached that should say!

I doubt they'll go lower though, is the point. There is certainly a shortage of properties in some areas but I don't think if people wait 12 mnoths or a 2 years they will find prices are 30% lower although a few supposed experts think so.

I think by next xmas we will be back down 20%.

Possibly but I doubt it. The economy is looking up a bit, although there will hopefully be a huge load of public sector useless quango people laid off over the next 2 years - virtually all new jobs in the N and Scotland over the last 10 years have been in the public sector but there is still a shortage of property which is what seems to be keeping prices up and compare the 12% interset rates I was paying with the 3% or whatever I now pay and it's very very very cheap at present. It's as good a time to buy for the long term now as any in my view.

We will have to agree to disagree then!I think QE and low IR are just a band aid to get labour through the election.Post election and once those funds are withdrawn prices will begin to fall and multiples become more realistic.i personally think we could see the bottom further down than early this year.Have spoken to 5 estate agents this week who all agree and they usually talk it up!Lets see.obviously if you are looking for a home and its affordable thats a different story to an investment

True and most people are looking for a home not an investment. Things have got quite busy though with a lot of businesss and I haven't had as much work for seven years and where my daughter works is very busy too and the pound is low which is helping a lot of exports but we'll see. If we get massive inflation and higher interest rates then I suppose that extinguishes my debt although that would be harder to fund. If we keep low interest rates then I gain there. I would prefer the stabilith of the lower interst rates and no house price inflation as that's easier for people then to buy but it's hard to know what will happen. I still think over any lifetime for all kinds of financial and other reasons if someone can afford to buy their home they will find that a very wise choice.

Well i thought my property developing days were over and I have been surprised to see lots of sales at over the odds prices in the last 8 weeks.there is some cheap money arond and tht has stopped approx 60k repossessions this winter.However inflation is on its way which for some like yourself will erode the debt where for others it will cause chaos.It is all uncertain although to ever get 1st time buyers back in the market prices need to fall

cyber invites noddy to Xmas dinner (vegetarian and non-alcoholic menu available).

I rent.

The house I live in was for sale before we moved in for £500,000 (london prices for a small 3 bed).
If I was to pay that sort of mortgage it would be £2900pm (ish).
I pay £1300pm.

That, to me, is a no brainer.

If we owned we'd be financially crippled.
As we rent we get to live in a lovely house at a cost we can afford.

I'll stick to renting.

tigerbear - ahhh, so it's actually a story about the joys of making crap housing decisions! What a lovely ending

You know, much as I at Xenia's apparent smugness, at her (over?)confidence (I think that's what comes across as smugness) and, let's be frank, her financial success, I have to say that she's the most positive (and, therefore, persuasive) poster on here. You can't be British, Xenia, surely?!! You don't have that fatalistic, defeatist attitude which says 'my life is never going to change' - and though it pains me to agree with you, if I really wanted to earn more money to take control of my situation I would do the things you suggest. It's easier for you to commit more time to your working life than for me, though, as your children are adults - mine are aged 3 and in the womb. They are my priority first and foremost, money simply has to come second at this stage in my life.

I do agree with Buddy80, though, that for the present time the best option for us is to rent in a good area (good schools, etc) and consider buying much later. We could always invest our deposit money in a cheaper property in the NE - but then that would turn me into a loathed property developer pushing ordinary folks out of the market! Gaaaah! What comes first - values or financial stability???

Working hard is putting your children first and giving them an example of woman as high earner having fun and being happy than woman as male servant without pay.

I certainly think that for all parents of both sexes having children under five is the hardest stage of your life ever, nothingi s harder, not teenagers' agnst, moving house, even I suspect death of both my parents in the last few years nor even divorce. Being woken every 2 hours for 5 years every night, holding a baby between 1 and 3am which is screaming knowing you have to get up at 7am to get other children to school, nothing is as hard as that. It's a torture around the world to do sleep deprivation and getting used to taht change in your life of having the first child too is a massive change but you have all that whether you work or not. It's just much easier if you work too.

Anyway people should be more positive whether they're enjoying bliss as housewives (having been hynotised by the Stepford wives myth) or happy in their work. There is too much moaning in the UK. As far as I know I'm English.

Anyway as children get older and before they are born it's easier to work harder, definitely. Most of us want to be with our children.

It is morally good to invest in a capital economy. It is only the wooly thinking of the left which thinks investment is wrong. But I am not sure the NE is a good place to invest at the moment (and I'm from there). This recession is turning into worse in the N and better in the S.

Makkapakkaswilly - feel a bit weird writing that! Yes we do s similar thing, rent in a lovely area with great schools and have cheap rent relative to other properties in the area and no way would we be able to afford to buy.

BUT are you able to buy if you wanted to?

That is what I worry about as it would take us 10 years to save up a decent deposit. I do worry about security for my dds and as someone else said on here, a lot of people don't want to make money from their house - we certainly wouldn't - they just want a place where you can, i don;t know, keep chickens if they want, paint the walls, put up shelves where ever they chose and have a place the children can always call home and come back to later on.

I am always positive though and believe that we will be able to buy sooner or later and i do believe at the end of the day it is better to have your own property.

saramoon - no, we can't afford to buy.
At least not in this area. We can afford to buy a long way out of london - but if we did that, the cost of commuting would degrade our quality of life and our jobs (which we love) are here.
Plus the time spent commuting is time away from the children, each other etc.

As it is I live 20 mins from work, DH 40 mins.

If we wanted to buy, we'd need to buy either VERY small in this area, or about an hour further out for a similarly sized house.

We DID own. We had a 3 bed house, small garden, driveway, in Reading.
Our mortgage was £800pm. Our commute (for both of us) was about £900pm. DH spent weeks of free time doing minor repairs. We had no time, no life. Then the roof went and we couldn't afford to fix it up. Then the market crashed and whilst we avoided negative equity, we weren't far from it.
So we cut our losses, sold up and found a 3 bed rental house in london for £1500pm. Negotiated to £1300. The house is beautiful, the landlord does the repairs, we live in a gorgeous area, never been happier. Just signed for another 2 years here.
So yes, our rent costs more, but our commute is less, our time together is more, and our lives are much, much better.

Renting can work. Mortgages can work. I think it depends on so many factors, none more so than having a good landlord and we are lucky.

That sounds a lovely set up. The average wage ios £20k in the UK. That doesn't buy much in London - £60k if you go by the 3x earnings average. Thus many people can't buy.

My solution has always been to earn more.

I was just reading today's FT which was surprising - house prices up 91% over the last ten years. I assumed at my divorce almost 7 years ago my ex got his money from me at the highest peak but may be I'm wrong.

Property prices peaked Spring 2007 and the lowest prices were being achieved in December /Jan 2008/9.Since QE and artificially low IR they have recovered and are currently at peak less 5% as an average.The bulk of the rise % wise was in the years 2005-7. Generally in property it is thought that prices will hold for the first quarter 2010 where they are followed by a lull in the market around the election mainly due to uncertainty and then sharp falls over the next few years as inflation rises interest rates become more realistic and more houses become available.