Grrrr If I hear 'renting is throwing money away' from another interest only holder

Former_MSE_Archna

This is the discussion to link on the back of Martin's "Grrrr..... If I hear 'renting is just throwing money away' from another interest only mortgage holder" blog. Please read the blog first, as the discussion follows it.

Read Martin's "Grrrr..... If I hear 'renting is just throwing money away' from another interest only mortgage holder!" Blog

Bossyboots

"what’s this, chopped liver?"

Sorry, I had to quote that bit. Its so quaint and something my grandmother used to say. Had us in stitches as kids.

I am one of those who had qualms about renting. I considered that my son "wasting" hundreds of pounds a month doing this. What could he do though. It is right that he should want to spread his wings and there was no chance of buying.

After a year of renting, they have had all the curtain fittings replaced, a new washing machine, the plumbing attended to on a number of occasions and anything else that goes wrong. Now while it is more than likely that if they owned the flat my OH would have fixed the plumbing properly first time for them, the worry free maintenance of the property has to be a bonus. Their managing agents appear so far to be pretty good which has helped. They are only tied in for a year at a time so it will be easier to spread their wings once he completes his Phd. No worrying about having to sell up if the dream job comes along and relying on buyers to see it through. Problem neighbours are sorted out by the landlord who owns all the surrounding flats.

The more I think about it, the more I am not sure I can even see the advantage of owning a property anymore.

Voyager2002

You could equally well say that eating is just money down the toilet!

immoral_angeluk

We rent.. and to be honest I'm at the stage where I prefer renting to the prospect of 'owning' a property. Mainly because how many 'homeowner's' throw their money away on repairs and maintenance, whereas when you rent the maintenance and repairs are the landlords problem.. so we've in fact saved a lot more money than most realise. Yea ok we don't own the property.. but we're paying for the roof over our heads and I can't see how that's 'throwing money away'.

olly300

An advantage of renting is that you can live where you like or in reality where your job is. Particularly when you are young and starting out. Most of my friends' and I have had to move away from our home city to get jobs that offered proper training and experience. Yes local employers offered the same thing but the pay/training schemes/experience offered was much less.

philhuff

I always fall somewhere in the middle. I rent, and have done for a few years, although I'm now in a slight trap - we're on such a good deal where we are now, that even renting somewhere else seems a lot of extra cash to spend!

And, as has been said, the risk is with the landlord and not yourself.

However, there's something to be said for owning your own place that goes beyond pure finance, and I admit that there's an element of heart over head about it.

If we owned the property and wanted to tear down a wall and install a breakfast bar, we could. If we wanted to fit new windows, we could. If we even wanted to simply repaint the living room, we could. Right now, we can't, at least not without at least eight weeks of phone calls, chasing, permission asking, and so on, and that's actually a far bigger deal than perhaps it ought to be.

Fortunately, I'm not daft enough to accept that house ownership over rides all other thought processes. We can afford a good size house, but we'll be mortgaged to the max, and that's then gambling our entire future. I'm not prepared to do that, however appealing the prospect may be.

inmypocketnottheirs

Don't buy. Rent. More tenants for BTL landlords. Who else is going to provide the properties? Reduced council stock, restricted availability of housing association properties.

quaveriw

I'm renting with my OH, my mum is continually harping on that we're wasting money, but like I've said to her many times we're living comfortably and can afford to 'live' and not have to worry about maxing out at the end of each month. We're living somewhere where we normally would not be able to afford to buy, and we're enjoying village life after living in a flat (which I owned) where the leaseholder never accepted that I was the owner and lost me a large amount of money, but now he owns the flat and is having difficulties renting it out! Revenge is sweet, but that's another story!

Kingron

In Liverpool you can rent a high spec 2 bed apt for £600 pm in the City. To buy it would cost around £160,000. At 5% interest this would be £800 per month. Plus as a tenant you have maintenance and repairs and SERVICE CHARGES to add on!

However anything you do to personalise the property you have to undo when you leave. Rents can rise and are unlikely to fall. Property prices do increase. Historically they have approx doubled every 10 years for the last 50 years plus!

My suggestion is to Buy Buy Buy and then when prices double - sell sell sell and then rent!

slonik

I totally agree with Martin. But at least in the UK interest only mortgages are as bad as it gets. In the US you can get mortgages where you pay back LESS than the interest, so the amount you owe to the mortgage company actually goes UP. I wouldn't be surprised if they introduce that here before too long.

climbgirl

Hurrah, I'm so pleased you've said this. I tried to explain this to my housemate before she rushed into a similar situation - only difference is her mortgage is 100%, she didn't have any deposit! :rolleyes:

She's paying interest only, at least twice what she was paying in rent and can't see that this situation means she's effectively renting from the bank. Her response was 'but house prices will go up so I can sell and buy again'. She didn't seem to get the fact that all house prices will go up if that's the case, not just hers. And that buying her second house will then cost her more....I gave up trying after a while.

There is an obsession with owning property in the UK, seemingly at all costs. I don't think the current situation is particularly healthy...