Should I sell or Rent?

POORBUTHONEST

Hmmmm, have been doing the end of year personal finances etc. and have also thought about selling up and taking the money.
My mortgage is nearly £1100 monthly, yet I can rent an identical house to mine in the same street for £650 month.
Or I can move out into the country (which is what we would like to do) and live in a farmhouse for about £800 month.
Would make approx £25k from any sale as we have not been here very long.

I have no dependants to leave a property to when I shuffle off this mortal coil, and I'm beginning to wonder what the attraction is of paying for a property that I will eventually own outright when I'm in my late 60's.
At present I have a lucrative job, and I could save £££ if I wasn't paying the Mortgage.

Should I stay or should I go?!!

PBH

A_Nice_Englishman

PBH - Will you be able to save enough (either in cash or in your pension) before you retire to pay the rent for the remainder of your life?

greencat_2

A couple of additional points

1. Don't forget to take into consideration buying and selling costs.

2. The benefits or not of renting vary according to the local market. In a lot of areas - rents are static (mine hasn't changed for nearly 4 years now).

My approach for the last year or so has been to Save and Rent. But I'm lucky - my rent is low (I typically save 5X my rent each month) and house prices are very high. In the space of a year and a half I've managed to get myself into the position of my savings' interest paying for the rent.

Sure I'd prefer to buy - but not necessarily in this area (or even this country). Besides which I don't think I could afford it without guaranteeing the missus and I will both stay in well paid work for the next 25 years (wage inflation isn't that great for either of us). So no real safety net. On balance I don't think it's worth the risk.

POORBUTHONEST

Thank you A Nice Englishman for your sage advice. I will ponder on this matter further!!

PBH

lynzpower

I had a discussion like this when I first joined MSE back in march. I was convinced that house prices would take a battering and come down in my area, so with that in mind I marketed my place in October, Im SSTC at the mo and going into rented.

However, whether Im doing the right thing or not financially will remain to be seen. Prices are still rising here by all accounts, and the market is pretty bouyant.

As it is though over the year my circumstances have changed dramatically and renting is certainly a good idea for me & OH, he has a dog that my current flat cant accomodate and a cheaper rental place will. Additionally, Ive expereinced some pretty poor health over the last year and if ( not that I want to) I later have to go onto benefits then keeping the mortgage isnt an option- whereas housing benefit might contribute to my shelter if Im too unwell to work. However, Im in much better health now, so I feel less convinced its the right plan.

Theres only one way to find out isnt there

Ps my selling costs are in my sig. That includes a complete repaint & house dring. selling CAN be done on the cheap.

lypsey

Hugosp

You say "Plus, interest rates won't stay high - there isn't the long term economic growth to sustain them."

I wouldn't take that for granted , if you take a look at what most economists forecast this time last year you will see they forecast LOWER rates and they have in fact risen
You will also see that countries such as Japan and India are not just prospering but are booming , the days of cheap TV , ipods , videos are going to disappear . If you take 5 mins to scan the financial pages of the BBC you will see that inflation is rampant all over the globe . Why do you think the US and even in "euro" land interest rates are climbing. We have as i stated before been below the "average" for a decade. At some stage or another rates WILL rise

THE most important factor for inflation and interest rates NO longer is the UK , we are now part of much more important "global" market. You should look further afield

FaTB

STR'ing seems to be a growing trend, but can't help feeling that those who did it maybe 2 or 3 years back will definately end up worse off.

I have no doubt in my mind that house prices will drop back at some point, but when and by how much is the more important question.

I would consider STR'ing a very high risk strategy.

space_rider

PBH, I would go. I moved to a rented house then put my house up for sale. I was pondering on just renting and keeping the equity which was a tidy sum. I have 4 children but I thought I would just get large amount of life cover so they would have that when I die. After looking at the figures and knowing that I would get tempted and spend the money over the years I decided to buy again. If I could trust myself I definetly would have carried on renting. the house I rented,I could never afford to buy.

chant1l

STRing is an absolute lottery imho, you have to time it just right selling at the point at which selling is possible at a high point and buying in the trough, gauging either is almost impossible.
Look at https://www.singingpig.co.uk there is a constant debate on there as to how prices will go argued by property people - with no fixed conclusion or agreed ground!
If you look at the long term picture you asset will increase with small fluctuations and flat points over many years, not as exciting as jumping in and out of the market, but a whole lot more manageable and dependable.