Rent is the real Financial Millstone.....

chucknorris

Procrastinator333 wrote: »

Long term I have never seen an argument for renting being financially better than purchasing. For the reasons you note and many others.

But delaying purchase can bring the point of ownership around much more quickly under certain conditions. And for me those conditions are present at the moment. We ahve already saved a fortune by delaying and I think there is probably another 12 months to run on that particular gravy train. But time will tell.

Then we are not disagreeing are we?

Procrastinator333

chucknorris wrote: »

Then we are not disagreeing are we?

I don't think so. The medium of text on a forum has confused things.

I disagreed with Interest being better than rent as it is a path to ownership because renting can also be a path to ownership.

But having not represrented my point you disagreed that a lifetime of rent was better than a purchase.

But I don't think either of us disagree with either point. Almost unheard of for a forum. :beer: to us.

Orpheo

chucknorris wrote: »

What you said does not make sense! Because you are including a capital repayment element within that £1,940 which you should not, because the capital repayment is an investment (ie paying off the house) not a cost.

If you are not including a capital repayment then you are assuming a mortgage rate of 8.95%! (£1,940 x 12/£260k). You are also concentrating on year one, my point is that over time paying mortage interest is better than paying rent, not in year one. Or if you are not then you need to inflate the rents by say 2.75% annual inflation, so the comparative rent would be:

1.0275^19 x £1,600 = £2,679/month

I am aware of the numbers. The difference between the mortgage interest and rent at £260k is £300PCM, at £290K it is £150PCM. The more expensive your house gets, the less attractive becomes the option to mortgage. I too do not disagree with you in principle, but not all circumstances are equal.

chucknorris

Orpheo wrote: »

I am aware of the numbers. The difference between the mortgage interest and rent at £260k is £300PCM, at £290K it is £150PCM. The more expensive your house gets, the less attractive becomes the option to mortgage. I too do not disagree with you in principle, but not all circumstances are equal.

If you are saying that you also agree that in the long term mortgage interest is much more advantageous than paying rent.

BUT in the short term you think prices will not rise and therefore there would not be an inflationary advantage to gain, then I would not disagree with you. My arguement is that OVER TIME mortgage interest is cheaper than rent.

leveller2911

RenovationMan wrote: »

I doubt very much that many landlords are concerned with the energy efficiency of their BTLs because there not paying the utility bills.

If annual maintenance is slapping a bit of paint around the house and having the central heating serviced each year, then I would struggle to hit £4500 to be honest.

A major problem with BTL landlords is generally speaking they don't do any maintenance properly or for the long term.This in many cases can bite them in the backside a few years down the line.I've worked on a fair few BTL houses and they all have fairly major works needed purely down to bodged maintenance work carried out by their owners.
One of the major faults is not addressing the problem of damp, they think slapping a coat of oil based paint on the walls will cure the problem, then a few years down the line they need new floor joists,floor boards, and completely re-plastering the ground floor.

A little bit of knowledge is a dangerous thing..;)

leveller2911

chucknorris wrote: »

BUT in the short term you think prices will not rise and therefore there would not be an inflationary advantage to gain, then I would not disagree with you. My arguement is that OVER TIME mortgage interest is cheaper than rent.

Does this also apply when renting Social housing? given the low rents.

chucknorris

leveller2911 wrote: »

Does this also apply when renting Social housing? given the low rents.

Probably not but social housing is not available to many that could could afford to buy, so it is not reasonable to consider it as an alternative to buying (for most anyway), possibly would only affect those buying their social housing, and that too would be at a discount (I assume you can still buy at a discount, it is an area that I know very little about)

MonkeySaving?

THE_GHOULISH_CODPIECE wrote: »

Yes food, like rent, is dead money because if you bought your own dream home with a garden you'd be able to grow your own veg, fruit, nuts, and berries and farm your own meat. Try doing that on your landlords premises and you'd sooner be out on your ear.

LMAO, are you the same ***** I owned in that last thread about renting, the one where you didn't believe we rented a house worth 300k for £595 a month? Want to grow berries, fruit and nuts? Get an allotment lol...
I'm starting to like you

THE_GHOULISH_CODPIECE

MonkeySaving? wrote: »

LMAO, are you the same ***** I owned in that last thread about renting, the one where you didn't believe we rented a house worth 300k for £595 a month? Want to grow berries, fruit and nuts? Get an allotment lol...
I'm starting to like you

No idea what you're talking about but I'll wager that the only thing you own is a rent book and a shorthold tenancy agreement.

MonkeySaving?

THE_GHOULISH_CODPIECE wrote: »

No idea what you're talking about but I'll wager that the only thing you own is a rent book and a shorthold tenancy agreement.

Only in the UK