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capital0ne
Posts: 872 Forumite
A friend of mine's son is 21, take home pay is about £1500/month.
He pays £300/month to his mum, gets a lift to work with dad so no other outgoings
He's renting a two bed cottage in a few weeks at £695.
Looking around where he lives you can buy a two bed apartment of terrace at about £80k
Checking the Halifax mortgage calculator with a deposit of £4k and the rest as a mortgage of £76k the repayments are £400/month.
Why pay £695 to rent?
Get a lodger and rent a room out (tax free) and that's your house for free!
Like the title says - no brainer
He pays £300/month to his mum, gets a lift to work with dad so no other outgoings
He's renting a two bed cottage in a few weeks at £695.
Looking around where he lives you can buy a two bed apartment of terrace at about £80k
Checking the Halifax mortgage calculator with a deposit of £4k and the rest as a mortgage of £76k the repayments are £400/month.
Why pay £695 to rent?
Get a lodger and rent a room out (tax free) and that's your house for free!
Like the title says - no brainer
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Comments
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Maybe your friend's son doesn't want to share with someone else. Perhaps he would prefer to live in a cottage rather than an end terrace. He might want the flexibility of renting over home ownership or to test the water living on his own before committing himself to a mortgage for decades.
At 21 he's big enough and ugly enough to make his own decisions about his living arrangements without some friend of his parents, who does not have all the facts, making out like he's a dafty for wanting to rent.0 -
He is a friend's son, so nothing to do with you in any shape or form. He has his reasons, and if he wishes to ask for your advice then give it to him. If he hasn't don't stick your nose in.0
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He is a friend's son, so nothing to do with you in any shape or form. He has his reasons, and if he wishes to ask for your advice then give it to him. If he hasn't don't stick your nose in.
Obviously the people who actually build houses know that there is no longer an army of people like your friends son, just itching to sign up for bubble sized debt at the lowest interest rates in history?0 -
As its going to be his first time living away from parents, its a good way to learn without being stuck with a purchase you regret.
He will be able to learn what things he likes, what things he doesn't. This will help him should he want to purchase in the future.0 -
Ah, sorry, he is only paying 80k if he buys, my bad...so how about splitting the rent and paying less than the mortgage at the lowest interest rates in history (his mortgage is going to go up over the term?)0
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May I add another view?
Many years ago, as a newly wed, we were in rented property & really looked forward to the day we could buy our own house. The problem then - and I suspect just as valid now - was getting the deposit together. After a couple of years we were lucky in being able to get a 90% mortgage on an older property (quasi-semi rather than terraced). The repayments were only fractionally above what our rent had been. However, we failed to factor in things like the cost of house insurance, repairs & maintenance and mortgage rate increases. In the 1980's, with a house that did need money spending on it, this turned out to be a very real problem. We did manage to keep our heads above water, but it was a stressful few years.
Perhaps a 21 year old who is currently single doesn't want, or need, the responsibility that comes with home ownership, or a lodger.
On the positive side, he is lucky to be living in an area where buying a house of his own is a real possibility in the future.0 -
Perhaps he hasn't got the deposit, perhaps he's not planning to stay in the area long term, many possible factors.0
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HouseMouse wrote: »Perhaps a 21 year old who is currently single doesn't want, or need, the responsibility that comes with home ownership.
Home ownership is no more onerous than car/motorbike ownership, and comes with considerably less responsible than dog ownership. Given many 21 year olds seem to take on these responsibilities, I don't think home ownership will be beyond them.0 -
For all those in favour of renting rather than buying.
Make sure you factor into your sums paying a lot more into your pension so that when you retire you have enough pension income to carry on paying rent until you die.
Of course if you buy a house, it will all be paid off by the time you retire so you won't need as much pension income, or will have a better standard of living in retiirement.0
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