Is renting madness?
Discussion
Me and my girlfriend are looking at renting a place, and everyone is telling us "Oooh, you're mad for not buying" etc, but unfortunately it's easy to say when you're not the ones that don't have to cough up for the deposit!
Is it really the financial suicide that we're being led to believe? We're looking at renting with a view to save up to buy, but it'll take a while!
Is it really the financial suicide that we're being led to believe? We're looking at renting with a view to save up to buy, but it'll take a while!
If you don't have a deposit then you don't have many options I'm afraid. That is the practical issue.
If you rent you have a fixed 'cost' of living. If the roof leaks or the central heating fails you don't pay. When the house needs double glazing you don't pay.
The 'scales' are surprisingly equal overall.
Unless the scales are in your favour - you have a decent deposit and you get a good interest rate, then there are benefits. If not, then renting is the better option.
If you rent you have a fixed 'cost' of living. If the roof leaks or the central heating fails you don't pay. When the house needs double glazing you don't pay.
The 'scales' are surprisingly equal overall.
Unless the scales are in your favour - you have a decent deposit and you get a good interest rate, then there are benefits. If not, then renting is the better option.
Nolar Dog said:
t84 said:
Is it really the financial suicide that we're being led to believe?
Not at all. You are paying for a roof over your head. The same as buying. I don't know why "we" are so hung up about property ownership.What is your current position? Just, if you and your OH are living with parents, are you paying them rent which would be less than you would otherwise pay a landlord? If so, then surely it is better to save up a deposit whilst living with your parents so you can then buy.
I always look at renting as paying off someone else's mortgage for them..........
I always look at renting as paying off someone else's mortgage for them..........
Just take a look at the properties out there to buy, and then compare the same type of property that are being rented out, and in lots of cases the rental is not much difference to an interest only mortgage repayment.
With rental the landlord is responsible for all remedial repairs, property insurance etc. If you fall out with a neighbour, landlord or get a job relocation, then with rental your move will be not only a lot quicker but also a lot cheaper.
I
With rental the landlord is responsible for all remedial repairs, property insurance etc. If you fall out with a neighbour, landlord or get a job relocation, then with rental your move will be not only a lot quicker but also a lot cheaper.
I
A mortgage is an excellent savings tool and will force you (assuming capital and interest mortgage) to put the money aside to buy your own home. Later in life, this will offer great peace of mind.
However, if you want to do the calculations, you'll probably find that it makes sense financially to rent while simultaneously saving... eventually buying a house with the savings. The main problem is being disciplined enough to actually save that money.
People in the UK seem to think that owning your own home is a no-briner but that's not always the case. When I bought my place, plenty of people would say "it'll be a great investment". I felt like saying "how the funk do you know what kind of investment it will be". It's just a default position that involves no thought - buy a house, it's great!
However, if you want to do the calculations, you'll probably find that it makes sense financially to rent while simultaneously saving... eventually buying a house with the savings. The main problem is being disciplined enough to actually save that money.
People in the UK seem to think that owning your own home is a no-briner but that's not always the case. When I bought my place, plenty of people would say "it'll be a great investment". I felt like saying "how the funk do you know what kind of investment it will be". It's just a default position that involves no thought - buy a house, it's great!
Edited by mcbook on Wednesday 30th June 13:36
hornetrider said:
Nolar Dog said:
hornetrider said:
Simply put - if you buy there is a time when the payments will stop.
Quite. Nowa add up the total cost of those payments.I'd rent thanks.
Another problem with renting is that you never live in your own house. This might sound silly, and is probably a symptom of my rapidly advancing age, but having recently goot out of renting I can't say it was a good experience - it never felt like home to me. Your experience might differ of course, and as other have pointed out, it depends on what stage you're at in life as well.
I think renting will be fine for you - if you can afford to rent and save at the same time. It all depends on what you want from somewhere really. There are advantages and disadvantages to both. I would always rent with somebody first before buying with them, purely on a practical level of you don't truly know somebody till you live with them (this was certainly true for me and the boy!). I think it's interesting how we place so much emphasis on buying in the UK. Personally I am now at the stage where we have been renting and now want to buy - for us its a case of it really being 'ours' but I'm not sure what part of that is social conditioning!
hornetrider said:
...
...Also if you buy the payment stays the same over time, whereas rents increase with inflation.
Does it? If you're on a fixed rate mortgage for the term perhaps. Otherwise the fluctuations can be frightening....Also if you buy the payment stays the same over time, whereas rents increase with inflation.
Also, general maintenance costs on houses are not to be sniffed at. Especially for older properties.
I would guess that for the majority of people, the costs of renting or buying over a 25yr period would be close when ALL costs are considered, and will largely depend on location and the value band you're considering.
If you're the sort that moves frequently, I would guess renting would be considerably cheaper.
(I own now btw. Rented for a fair few years though when the circumstances suited it).
I've always rented.
I pay £1650 a month for a beautiful 2 bed flat on the Thames.
Interest only mortgage on the same place £3000 a month.
Here's the roof terrace.
No service charge to pay
No repairs to pay
Anything breaks I get a new one free
Place is decorated once a year, and new carpets every three, all free
If the neigbours p155 me off I can move in six weeks
If I have to go abroad to work I can go at the drop of a hat
Downside is that I don't get a capital gain if the value of the flat increases, but so what.
Renting is usually derided by people at dinner parties who've clobbered themselves with a massive mortgage and then watched their value drop.
If I could I'd live ina hotel. Who the hell wants a millstone round their neck?
I pay £1650 a month for a beautiful 2 bed flat on the Thames.
Interest only mortgage on the same place £3000 a month.
Here's the roof terrace.
No service charge to pay
No repairs to pay
Anything breaks I get a new one free
Place is decorated once a year, and new carpets every three, all free
If the neigbours p155 me off I can move in six weeks
If I have to go abroad to work I can go at the drop of a hat
Downside is that I don't get a capital gain if the value of the flat increases, but so what.
Renting is usually derided by people at dinner parties who've clobbered themselves with a massive mortgage and then watched their value drop.
If I could I'd live ina hotel. Who the hell wants a millstone round their neck?
Edited by Soovy on Wednesday 30th June 13:53
Murph7355 said:
I would guess that for the majority of people, the costs of renting or buying over a 25yr period would be close when ALL costs are considered, and will largely depend on location and the value band you're considering.
I don't think anyone is arguing against this point too much.The main point is that at the end of that period, the renter has nothing, the owner does.
Nolar Dog said:
hornetrider said:
Nolar Dog said:
hornetrider said:
Simply put - if you buy there is a time when the payments will stop.
Quite. Nowa add up the total cost of those payments.I'd rent thanks.
hornetrider said:
Soovy said:
I pay £1650 a month for a beautiful 2 bed flat on the Thames.
Interest only mortgage on the same place £4000 a month.
Market value on your place Soovs? Why is the rent so low? Sounds like you are in an exception rather than the rule.Interest only mortgage on the same place £4000 a month.
About £700k.
Ive been renting for 3 1/2 years now in Herts and Surrey. Lots of the older generation say 'Your mad not to buy' however what lots of people fail to realise is that housing costs have risen dramatically since 'our parents' could buy a house at the drop of a hat.
I currently rent a 2-bed new build in Surrey for £1150pcm, the house next door (the other half of the semi) sold 2 months ago for £310,000.
In the very best situation id need 10% deposit (31k) more likely though 20%. I’m 25 and my wife is 26 we are both 'Professionals' but won’t be in a position to buy for a few years yet. Therefore we rent a nice house, in a good area, ok we could save money and live somewhere cheaper but id like to have wheels on my car when i come down in the morning.
In addition, with the volatile job market at the moment, we are on 1months notice to leave.......gives you much greater flexibility until you are settled and ready to stay long term.
I currently rent a 2-bed new build in Surrey for £1150pcm, the house next door (the other half of the semi) sold 2 months ago for £310,000.
In the very best situation id need 10% deposit (31k) more likely though 20%. I’m 25 and my wife is 26 we are both 'Professionals' but won’t be in a position to buy for a few years yet. Therefore we rent a nice house, in a good area, ok we could save money and live somewhere cheaper but id like to have wheels on my car when i come down in the morning.
In addition, with the volatile job market at the moment, we are on 1months notice to leave.......gives you much greater flexibility until you are settled and ready to stay long term.
Soovy said:
hornetrider said:
Soovy said:
I pay £1650 a month for a beautiful 2 bed flat on the Thames.
Interest only mortgage on the same place £4000 a month.
Market value on your place Soovs? Why is the rent so low? Sounds like you are in an exception rather than the rule.Interest only mortgage on the same place £4000 a month.
About £700k.
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