Buying Cheaper Than Renting Everywhere except London

IveSeenTheLight

CLAPTON wrote: »

yes

they are comparing mortgage costs of buying 75% of a property with the full rent

but interesting nevertheless

It is on average though, meaning some areas will be worse and others a lot better.

I know properties now that you can buy and the C&I repayment would be 73% of the rental cost on a 90% 5.95% repayment mortgage i.e. £590 C&I payments versus £800 rent.

Of course you need the £11,000 deposit for the 10% so you would lose interest on that, a whopping £363 per year at a 3.3% savings account (oops not deducted the tax off that interest)

There are lots of areas where property can be cheaper to buy than rent,

IveSeenTheLight

abaxas wrote: »

What a load of tosh.

Anyone who pays the asking rent for a property is stupid.

Your right, what a load of Tosh.

I recently had a change of tenants and the new tenants asked if I would accept a lower monthly payment.

I politely said that I would not be interested in lowering the monthly rent and they said they still wanted to procede but felt they needed to ask just in case.

Not all rental properties are in a location where it is a poor rental market.

There are strong rental markets in which rents have not decreased and voids are low

IveSeenTheLight

Cleaver wrote: »

I love the debates on this forum about the miniscule detail of whether renting or buying is the cheapest. It doesn't really matter that much, both are similar costs when it all boils down to it.

Most people rent, or choose to rent, because of life factors: no deposit, prefer renting, suits their lifestyle, suits their employment, suits their family status at the time, not interested in owning a house, can't find a house they like to buy, don't want to buy an expensive house, enjoy not having to pay for maintanence, going travelling in two years, planning to emmigrate, enjoys living with flatmates, doesn't want to buy a house until they get a job they really like... the list is endless.

People rent or buy depending on hundreds of factors, the finances being just one of those factors. £6 per month here, £52 per month there. Who cares?

It is possible that renting and buying over 25 years is similar.
What about after that period?
Is renting for 40 years comparable with buying for 25?

IveSeenTheLight

carolt wrote: »

There have been points over the last few years when it was only slightly more expensive to buy than to rent, or maybe even approx the same - at that point we were looking to buy, and we nearly did...got let down over various properties for various reasons.

Currently, not looking at all as not sure which area we want to be in long term, due to schools. Once we know that (visit last school next week, then hopefully decide...), we will be in a position to move.

But at current prices, no urgency to buy. Might just rent elsewhere, or stay put, depending on area chosen.

If there were times in the last few years when renting v buying was negligable, then with properties down 20% in your area, would that not mean that it is far better to buy now?
Have rents dropped in your area by a similar percentage?
I would genuinely be interested to know.

Thrugelmir

IveSeenTheLight wrote: »

It is on average though, meaning some areas will be worse and others a lot better.

I know properties now that you can buy and the C&I repayment would be 73% of the rental cost on a 90% 5.95% repayment mortgage i.e. £590 C&I payments versus £800 rent.

Of course you need the £11,000 deposit for the 10% so you would lose interest on that, a whopping £363 per year at a 3.3% savings account (oops not deducted the tax off that interest)

There are lots of areas where property can be cheaper to buy than rent,

Thats over a 9% rental yield which is good in the current market.

You wouldn't get that yield around here on a similar priced property.

Heyman_2

carolt wrote: »

Who on earth said renting v buying for 25 years? I'm not talking about renting for 25 years, you nana

I've reported your post to Abuse, Carol, on the basis that calling someone a nana is completely over the top and borderline racist.*

(*only joking, I've thanked it because it made me LOL when I read it )

the_ash_and_the_oak

IveSeenTheLight wrote: »

It is possible that renting and buying over 25 years is similar.
What about after that period?
Is renting for 40 years comparable with buying for 25?

or renting for 4 years and mortgage for 21 years then selling and renting again for 7 years then buying again

A lot of possible permutations left out imo

the_ash_and_the_oak

Or buying a flat now and selling in 6 years to buy a semi vs renting for 4.5 years then buying semi etc

IveSeenTheLight

Entertainer wrote: »

Wrong, wrong, wrong. Rental yields are around 5.5% where I am and seem to be similar all around the country if you ever watch Homes under the Hammer, except the north.

You are wrong, wrong, wrong .

Been trying to find the link showing the top 10 rental yields areas, all above 7% if I remember.

Found this link from last year showing Nottingham had a 10.9% rental yield, Durham at 9.23% and the average at 7.9% for university towns and an average of 6.4% for other BTL properties

http://www.propertywire.com/news/europe/rental-yields-possible-uk-cities-200808221510.html

Anyhow, with average prices dropped since 2007 and we've not factored in auction property investments (where we are told on here many times how cheap property can go for) this drives up rental yields.

For those that like graphs, this might be interesting



Ah here's one showing the top 10 rental yields, not the same link I rmembered but it has the same data

http://www.investment-properties-for-sale.co.uk/2009/07/02/the-top-ten-buy-to-let-hotspots/

IveSeenTheLight

Thrugelmir wrote: »

Hamish, something I find myself in agreement with you. As markets normalise buying will definately return to be cheaper to buy than renting.

The issue for those buying is raising the deposit, purchase fees and other costs involved in setting up home for the first time.

Not everyone gets a leg up from wealthy relatives.

I find it amazing to know that property can be cheaper to buy than rent.
I first rented a 1 bed flat for £340 per month.
When I bought my first flat, a 2 bed property, self contained, garden front and back my C&I mortgage payments were £300 per month.

Why would anyone in their right mind rent instead of buy?
I had to as I was clearing debt, however it is strange that buying can be cheaper than renting?

Think of any other rent market (cars, tele's (remember when people rented tele's, hire equipment etc), people rent because they can't afford the full payment to buy or choose not to buy as they only wish short term.
In all cases however, over the long term, rental should exceed the buying costs in order to make it profitable for the renting company