Are we mugs buying homes or should we rent

[Wolfman]

In many European countries people tend to rent where they live instead of buying

Apart from the fact our home rents are crazy in this country would it not make more sense to rent in this modern time ?

When you are old they force you to sell your home to fund your care in a care home, if you have no property as an asset then the government funds it

So although I nearly own my home and my mortgage is about 50% of what rent would be it does make you think if I started again maybe I would rent and not buy perhaps
Seems to be in this country if you own nothing you get looked after, if you have assets you get zilch as support !

 

[SwingsitlikeHogan]

Rental seems a sensible option - but in say Germany folk will rent the same place for 20+yrs. And I'm sure what the owners let those renting do to the property will be different. And if you think about it - why spend say £30k on an extension to a house you own and go through all that hassle, strain and cost - when you could just move to a bigger rented property.

 

[Rooter]

I recall reading that something like 90% of Germans rent their homes.. how is their economy compared to ours?

interesting topic, i am no financial guru so will be reading with interest! but for the record, i own my house but have a huge mortgage! but i am still relatively young...




Wow, found the article i read over 2 years ago! the 90% was in Berlin, they have massive variations by city...

http://www.theguardian.com/money/2011/mar/19/brits-buy-germans-rent

 

[SocketRocket]

It's correct that rent contracts tend to run over decades in Germany offering the tenant a degree of security, the quality of properties is also very high. Many of the people I know in Germany have tended to build their own houses, there are also house building groups that collectively buy a plot of land, allocate building plots and share the building work between themselves.

 

[Alex1975]

Rent and Mortgage are about the same price per month now days so not point renting.

 

[Wolfman]

it would cost be £1800 per month to rent the same size 4 bed house which is crazy, my mortgage is only £700 per month but if I added up the costs of selling 6 previous homes and house maintenance it makes you wonder.

My parents came from the own is best era, but today I think renting maybe the future just wish the government would cap the very high rents which leads to even more buy to let situations

 

[jimbob.someroo]

I rent (albeit in London) and detest it.

I pay just shy of £600 excluding all bills for a room in a 3 bed house. The house rent per month is £1700 which means we pay £20400 in rent a year ... £20k ... TWENTY THOUSAND POUNDS!

I get the idea of the OP and maybe this would work outside of London but our house is probably worth around £300k in the current market which means the mortgage would be fully paid off in 15 years or so.

The idea that I could live in a place for three years and pay £21k+ with nothing to show for it is horrible. If I were to be able to live with relatives and save that money I'd have a deposit for a small flat (or decent house out of London). As it is, nout.

 

[bluewolf]

Rent and Mortgage are about the same price per month now days so not point renting.

Unfortunately, the barrier to young people now is not the cost of the mortgage. It's the deposit needed to secure that mortgage. I remember buying 2 houses at the same time when I first got on the property ladder. I was in the process of buying the first when the house next door came on the market, so I bought that one as well. IIRC, the deposit for both was less than £4k.

 

[Wolfman]

My first terraced house had no deposit 100% mortgage 5 year low start etc etc, cost me £21000 later sold it for £60000 2 years later !

Renting costs have been left to get out of control as people saw the potential to buy houses and rent them out to fund the mortgage, then buy another one etc etc result seems to be rents that are twice as high as they should be in my opinion

 

[jimbob.someroo]

Renting costs have been left to get out of control as people saw the potential to buy houses and rent them out to fund the mortgage, then buy another one etc etc result seems to be rents that are twice as high as they should be in my opinion

Nail on da head.

IMHO mortgages were too easy to get hold of in years gone by which led to two issues.
1) the above in which people bought multiple properties easily and rammed the rent prices sky high
2) some people took on mortgages which they couldn't afford to pay back (even with no deposit) and caused all sorts of issues for future potential home owners

 

[GreiginFife]

Having done both in the last decade it's swings and roundabouts. For anyone, like me, that has a mortgage you don't "own" the property, think of it as renting from the bank, until that last payment is made.
Renting comes with the advantages of more freedom of movement should you wish (no need to sell), repairs... oh the repairs how I miss thee...
Place I rented the boiler packed in, one call - fixed next day, no cost
Here, boiler went few months back - that'll be £5k please... :mmm:

 

[Wolfman]

Having done both in the last decade it's swings and roundabouts. For anyone, like me, that has a mortgage you don't "own" the property, think of it as renting from the bank, until that last payment is made.
Renting comes with the advantages of more freedom of movement should you wish (no need to sell), repairs... oh the repairs how I miss thee...
Place I rented the boiler packed in, one call - fixed next day, no cost
Here, boiler went few months back - that'll be £5k please... :mmm:

i agree but paying a mortgage means you should of have value in the house assuming you purchased it before prices fell

For me the buying a home concept comes from our parents i.e you have property to leave your children when you both die

Also gives you options to sell up and rent abroad when retirement approaches

The renting idea I like a lot, I just do not agree with the inflated rents that has become too common

 

[SwingsitlikeHogan]

When we eventuially get around to moving (see Do You Like Where You Live thread) in about 4-5yrs time we will almost certainly rent at first - and not sell our own place but rent it out. Help us to decide the area to look to buy in - if and when we actually decide to buy. Rental of our Surrey home should easily pay for the rent of a place in South Yorkshire or Derbyshire - with maybe even a bit left over. And as already mentioned - we could decide to change a rental place in these areas for one in Spain or Portugal - even if just for a bit.

 

[GreiginFife]

i agree but paying a mortgage means you should of have value in the house assuming you purchased it before prices fell

For me the buying a home concept comes from our parents i.e you have property to leave your children when you both die

Also gives you options to sell up and rent abroad when retirement approaches

The renting idea I like a lot, I just do not agree with the inflated rents that has become too common

Like what mortgages will inevitably do when interest rates are forced to rise and we create yet another property bubble - it's already starting unfortunately.
I was lucky enough to buy during the initial crash so should have enough equity for the duration but many are not so lucky. I already see 3 bed semi's going for £20-£30k more than they are actually worth - and that's in Dunfermline, god only knows what the big smokes will be like.

 

[Doon frae Troon]

Rent and Mortgage are about the same price per month now days so not point renting.

Quite agree with Alex.

I have owned my house for over 5 years........ after probably paying an average of 7% mortgage rates for 25 years.
If I was renting the house I now live in for free I would probably be paying around £650 a month, even in low property cost Ayrshire.

My house would double in price if I could airlift it to the home counties.

 

[louise_a]

having been a home owner, well mortgagee, for 25 years, I always seemed to be on the wrong end of booms, interest rates etc. I now live in a house share that costs me £335 a month and includes utilities.

I am far better off now than then, do miss a garden sometimes though.

 

[JustOne]

In many European countries people tend to rent where they live instead of buying

Apart from the fact our home rents are crazy in this country would it not make more sense to rent in this modern time ?

When you are old they force you to sell your home to fund your care in a care home, if you have no property as an asset then the government funds it

So although I nearly own my home and my mortgage is about 50% of what rent would be it does make you think if I started again maybe I would rent and not buy perhaps
Seems to be in this country if you own nothing you get looked after, if you have assets you get zilch as support !

Depends what you're doing with the other 50%.




I think we should have mortgages, renting is dead money and people don't value their property (or surroundings) when renting.

Renting is ideal for young couples who don't really know if they can stand living together - a trial for the commitment per se.

 

[HomerJSimpson]

I'm fortunate that I'm buying a four bed detached new build with the kitchen, bathroom and add ons we want and will be mortgage free and that there will be about 25k left to furnish it out as new. I say fortunate but that was the inheritance I got from selling my mums house and I'd rather still have her with me

 

[Slab]

Without getting into the politics, my parents working class generation wasn't about buying. Renting from the council etc was the preferred route with the advantages listed in the thread about repairs etc but in addition the rental value wasn't allowed to get out of hand because it was effectively renting from the government

The council house/housing association rental system worked pretty well from what I could see and really only fell apart with the big council house sell-off, creating an army of private rental deals with none of the controls the council had to comply with

It is a nice concept that buying will provide capitol in the future but very often it just doesn't

As I'm living abroad at the moment I rent both house & car (even seeing the hassles of car repairs etc makes rental a viable option)

So no commodity down the line (although end product not guaranteed as many will have accidents etc and perhaps no insurance pay out because you fall foul of the small print that says you cant add go faster stripes without notifying the insurance company so they can reassess your policy so they wont pay out & you get squat etc etc etc) but no hassles in the intervening years either

 

[Fish]

I now rent and I'm very comfortable with it.

When I closed my businesses back in December I had a good look at everything, the house I owned and lived in, the houses I owned and rented out and came to the conclusion that with their just being me and the wife, no kids to leave anything to, cash was king and I decided to sell everything!

We have nobody to leave anything to so why lock it up in bricks & mortar?

Without being too sinister, but realistic, we both have elderly parents who will inject further inheritance to our cash-flow in years to come or, we could consider moving into one of those property's mortgage/rental free!

I watched my father work all his life and then not be fit enough to enjoy his retirement, they owned their property outright but life changed around them in what was once a quiet cul-de-sac but younger families, screaming kids, dogs barking all day & night they became stressed and ill and the house couldn't yield enough to move them totally to another property in a better area and a mortgage for them was out of the question as pensioners, so, I bought them a bungalow and looked upon it as my future pension/inheritance.

I only had about 6 years left on our 4 bed house I lived in but it was too big for the 2 of us and, unlike many other areas of the city, it was increasing in value slightly every year but the costs to run it was offsetting that slightly. The mortgage was over £1200.00 p/month but the improvements we made to it were never going to get us any more value as the area dictated the prices more, not the standard of the property. So, I found a lovely 2 bed semi at the top of a quiet close in a top area on the outskirts of the city and ironically, this property has a greater value than the large house we sold and yet only costs me £650.00 p/month! This is not only a huge cost saving against a monthly mortgage but the semi is around 30%+ cheaper to run and has been mentioned, no on-costs for any maintenance.

As such I now have far more disposable income and cash-flow than if I owned my property which has enabled me to retire at 53 (now 54) and with my wife going back to work, we have a steady flow of cash coming in also which almost covers everything so I am not draining the pot, so to speak, although I give it a good go

This suits us fine, it may not suit everyone's circumstances but for me it shows how rental can be a good thing and we pay the maximum 12 months in advance to give us some protection.

It has however one minor drawback, should the owners after any period of time want to sell, and the buyer/s not want to rent, we have to move on. Personally I'm not over-fussed about that as I see rentals around here becoming available all of the time so we would stay in the immediate vicinity at the same costs. We have asked the owners their intentions and they have no plans to sell but who knows what changes can arise to alter that decision.