Buying Cheaper Than Renting Everywhere except London

Entertainer

IveSeenTheLight wrote: »

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.

I'll answer that for you. Two years ago, one bed flats around here were £140,000 and rented for £500 a month = rental yield of 4.28%. So it was cheaper to rent than buy. Now, the same flats are £110,000 and rent for £500 still = rental yield of 5.45%.

HAMISH_MCTAVISH

abaxas wrote: »

Just done an interesting calc.

Assuming a standard 5% mortage rate, 3% inflation and 3% after tax saving rate.

Over 25 years, we would lose £137,252 in the process. Ie worse off.

This figure doesnt take into account maintainence or any other ownship costs.

Can you expand on this with the numbers you used please.

System

the_ash_and_the_oak wrote: »

Look we know about the capital growth. But this question isn't about capital growth - it is about what is cheaper right now.

I'm lost, why does it matter? Surely it takes a special kind of idiot to base their decision on whatever's cheaper? If rent is £500 and a repayment mortgage is £510, does that make renting better? Aside from all the reasons Cleaver has mentioned, that extra £10 a month seems money well spent when you end up with an asset that's doubled in value at the end.

mewbie_2

Joeskeppi wrote: »

Surely it takes a special kind of idiot to base their decision on whatever's cheaper?

Hello. I was looking at stuff today, comparing prices and being a bit MSE. Then I thought - why does it matter - after all it's only x amount of money compared to y. So I just clicked away and put it on the credit card.

Thrugelmir

Entertainer wrote: »

I'll answer that for you. Two years ago, one bed flats around here were £140,000 and rented for £500 a month = rental yield of 4.28%. So it was cheaper to rent than buy. Now, the same flats are £110,000 and rent for £500 still = rental yield of 5.45%.

So still overpriced. :rolleyes:

System

mewbie wrote: »

Hello. I was looking at stuff today, comparing prices and being a bit MSE. Then I thought - why does it matter - after all it's only x amount of money compared to y. So I just clicked away and put it on the credit card.

Yes now try reading the rest of my post.

tek-monkey

Joeskeppi wrote: »

I'm lost, why does it matter? Surely it takes a special kind of idiot to base their decision on whatever's cheaper? If rent is £500 and a repayment mortgage is £510, does that make renting better? Aside from all the reasons Cleaver has mentioned, that extra £10 a month seems money well spent when you end up with an asset that's doubled in value at the end.

And who in their right mind wouldn't pay a tenner a month for a house? Assuming a steady mortgage rate thats 3k to not have to pay rent again after 25 years. Its still not cheaper though, as in right now.

carolt

Joeskeppi wrote: »

Yes now try reading the rest of my post.

Did it ever occur to you you might be posting this on the wrong site?

Why spend ages faffing to get your car insurance cheaper, use those grocery codes, or whatever...just so you can blow it all on the mortgage.

Maybe your sentiments would go down better on MoneySpendingExperts, instead, that well-known site? :rolleyes:

mewbie_2

Joeskeppi wrote: »

If rent is £500 and a repayment mortgage is £510, does that make renting better? Aside from all the reasons Cleaver has mentioned, that extra £10 a month seems money well spent when you end up with an asset that's doubled in value at the end.

Ok then, tut, I've read it now.

Ten pound a month? That's not much of a home decorating and maintenance budget. Might buy a blind this year. Maybe a quarter of a living room carpet next year. And so on.

Decorating maintaining a property is a new level of expense, which until you encounter it, you would not believe possible.

silvercar

Decorating maintaining a property is a new level of expense, which until you encounter it, you would not believe possible.

But can you put a cost on being forced to live with nothing but magnolia ( & shabby magnolia) for years on end.