Do nothing ! -- Makes you think

tcall

wolvoman wrote:

So 7 grand a year in rent versus buying a house losing 7 grand a year. Then there is a mortgage to pay. Even an interest only mortgage will be about the same as rent so another 7 grand a year.

So you'd rather pay £14K per year to buy a place you could rent for half that amount......?

Just because the value of the house goes down by 7 grand a year doesnt mean you are paying an extra 7 grand a year. If you decide to sell, every other property has also decreased in value not increased or stayed static.

So £7 grand in rent vs £7 grand in mortgage repayments is no contest to me.

ag359

tcall wrote:

Just because the value of the house goes down by 7 grand a year doesnt mean you are paying an extra 7 grand a year. If you decide to sell, every other property has also decreased in value not increased or stayed static.

So £7 grand in rent vs £7 grand in mortgage repayments is no contest to me.

That's irrelevant. If every property had decreased in value, then you would have gained even more by renting.

tcall

ag359 wrote:

That's irrelevant. If every property had decreased in value, then you would have gained even more by renting.

How exactly?

You may think you've gained by buying the house for 7 grand less, but you will have paid out 7 grand in rent by the time you get round to buying.

lisyloo

How exactly?

You cannot make a straight comparison between renting and interest payments. There are differences namely

1) Home buyer pays for buildings insurance, renter does not
2) Home buyer pays for on-going maintenance, repairs and deocration, renter does not

Also transactional costs need to be taken into account (if buying or selling).
There can be quite large.

tcall

lisyloo wrote:

You cannot make a straight comparison between renting and interest payments. There are differences namely

1) Home buyer pays for buildings insurance, renter does not
2) Home buyer pays for on-going maintenance, repairs and deocration, renter does not

Also transactional costs need to be taken into account (if buying or selling).
There can be quite large.

I'm not trying to make a straight comparison. Yes, a home owner has extra costs, however at the end of their mortgage they own a property. A renter doesn't ever own their home and will continue to pay rent. Putting off buying is just putting off living mortgage free as far as I'm concerned.

meanmachine_2

tcall wrote:

I'm not trying to make a straight comparison. Yes, a home owner has extra costs, however at the end of their mortgage they own a property. A renter doesn't ever own their home and will continue to pay rent. Putting off buying is just putting off living mortgage free as far as I'm concerned.

That's only true of the 75% who take out repayment mortgages.

For those on I/O you're really only renting from the bank, while shouldering all the other myriad expenses.

In a flat or falling market, with below market value rent, the figures certainly do support renting, not buying - in the shorter term anyway.

In a rising market then all bets are off.

nelly_2

We're flirting about £500 a week into the bank which, and as you repay double what you borrow on a mortgage, (often more than that),it's like a real saving of £1000. So for a couple of years we are miles better off paying rent. By the time we buy will will have massive deposit or wait 4 years and pay the lot off in 1 hit. Now I cant see how that cant be worse than buying, dead money my @rse, its doubling each week.