Cost of Owning vs Renting

HAMISH_MCTAVISH

Gigglepig wrote: »

but I haven't got a clue how much we would need to save in order to have a reasonable amount available for bigger repairs.

Maintenance costs are not typically as much as people think, but they do vary vastly by property type and condition.

I moved into my current house (a 100 year old stone build 3 bed terrace) in 2007, and since then have spent only a few hundred pounds, including preventative maintenance.

In my other house, we spent around £10K in 20 years, but that included new kitchen and bathrooms, many sets of redecorating, roof repairs to flat roofs, upgrades to heating, etc etc etc. And it's a larger detached property.

You can certainly minimise the chance of major repairs by choosing a property with everything in good condition, with a good maintenance history. Much like a car in that regard.

What type of property are you looking at?

franklee

As you're including one off costs what about stamp duty and solicitors fees when buying?

HAMISH_MCTAVISH

This handy rent versus buy calculator may help as well.

http://www.greengem.co.uk/Rent_V_Buy/rent_v_buy.php

As a sample calculation:

House price = 162,000 (current average)

Mortgage rate = 5%

Deposit = 20%

Rent = £690 per month (current national average)

HPI at long term average of inflation plus 2.9% (so 4.9% based on todays inflation target)

Rent increasing at 4% per year. (current rate)

After 10 years you'd be £112,267 better off with buying than renting.

After 25 years you'd be £595,915 better off with buying than renting.

After 40 years you'd be £1,670,683 better off with buying than renting.

Obviously those figures will change over the course of decades, but the point is clear. The sooner you buy, the sooner you start saving.

HAMISH_MCTAVISH

franklee wrote: »

As you're including one off costs what about stamp duty and solicitors fees when buying?

And the costs of moving every 6-12 months in rented..... Application fees, deposit deductions, credit check fees, moving costs, disruption, time off work to look at new places, etc etc etc.

shortchanged_2

By the way gigglepig if you didn't already know HAMISH MCTAVISH is one of the most infamous property rampers on this site. He has VI's in high property prices so you will not get an impartial opinion from him.

LandyAndy

I'm sure I read somwhere that for a typical house you should put aside 1 - 2% of the purchase price/ market value per annum for repairs. That doesn't mean you'll spend that every year but is an average over a long period. That feels about right in my experience.

HAMISH_MCTAVISH

shortchanged wrote: »

o you will not get an impartial opinion from him.

And you're one of the most notorious crash rampers on the site, so they'll not get an impartial opinion from you either.

Besides, the figures are what they are.

It is VASTLY cheaper to buy than rent over any decent length of time. And that's beyond dispute.

Gigglepig

franklee wrote: »

As you're including one off costs what about stamp duty and solicitors fees when buying?

That is right, I have already looked at the costs of purchase including fees, stamp duty, surveys etc. but I am unsure of the ongoing costs of owning. I think there may be many hidden costs (maintenance, higher bills etc) in particular since we may move to a bigger property if we were to buy.

kford224

If you think you can afford to buy, then buy. I've rented as a student and for a few years after, but would never ever choose to rent if there was a chance I could get a place of my own! There is nothing like having your own place

Niv

As others have pointed out, saving a set amount for wear and tear/maintenance is very subjective and varies wildly. I shall give you my two examples:

First house - Modern 1980's - 2 bed - I chose to replace carpets throughout house and kitchen at the cost of <£2k. No other mainteneacne was required in the 4 years I lived there (although I chose to spend ~£100 in the garden.

Second house - 100 years old - 3 bed - about twice the size as house 1 and a garden about 10times bigger - I chose to redo bathroom at a cost of ~£500, painted a few rooms ~£200 and am in the process of redecorating living room/new fireplace ~£400. Those are all choices not required. I also detected a small leak on my flat roof and it has cost be the grad total of £50 and an afternoon to put right.

You pays your money you takes your choice. I personally do not think owning a house necessarily costs a huge amount in maintenance excluding the urge to redecorate.

The biggest/most common arguement I hear on here for renting is 'at least if my boiler breaks it is fixed for free'. Counting everyone I have known well enough to know including all family and friends and my own home owning experiance, I have only ever known 1 emserion heater to have malfunctioned in over 20years. So dont believe all you hear about owning a home is expensive on maintenance, it depends entirely on the house you bought and how you look after it so you only need preventative maintenance which is often very cheap/free but takes a little of your time.

Niv