Is this right? I'm only paying £186 off my actual mortgage?

Gorgeous_George

I'm gonna buy a taxi.

I heard taxis only ever go up.



GG

roswell

Robert_Sterling wrote:

Renting is DEAD MONEY.

Iv never heard of a tenant needing to wonder where the mortgage payment is, never heard of a tenant needing to buy a new roof / guttering / plumber to unblock a drain. Iv never heard of a tenant needing life insurance to protects the banks property and debt if they peg it.

Iv never heard of a tenant having a problem moving area`s at short notice due to better job offers ... its not all bad being a tenant ... it can be a lot worse for the land lord ...

eamon

Renting is not necessarily dead money. If you rent in the social housing sector then it probably is better value i.e. more affordable, better and longer tenancy terms and landlords that will fix the problems that occur. Eventually (assuming that demand for owning propery exceeds supply) the UK will be much like the rest of Western Europe were only the wealthy can buy their home. Those who aren't already on the property ladder will only be able to rent or need to be young enough to facilitate 35 year plus mortages.
Private sector rents are very high but they need to be for all those "buy to let" investors to service their debts and still get a return and in that sense renting one of these properties is dead money!
I own my house albeit I do have a mortgage but I must say many times in the last 15 years I have fancied moving to a different city but have always been put of by my mortgage and the hassle never mind the expense of buying & selling. Whereas if I had been renting who knows! On the surface it seems much easier to up sticks when you rent.

yours

Eamon

talksalot81

eamon wrote:

Those who aren't already on the property ladder will only be able to rent or need to be young enough to facilitate 35 year plus mortages.

Is this said with tongue in cheek?

Brits are far too used and far too keen on moving for this to be the case. In this scenario, the market would slow enormously because there would basically be zero push from FTBs.

jamief

imo Renting is not dead money - there are a lot of people out there who can't or don't want to own their own home, and for them it is perfect. There are other people who value owning their own home far more than having money in the bank etc, and for them renting isn't a viable option.

cupid_s

Starsky72 wrote:

thats a mighty BIG "if" you have used to demonstrate that renting isn't dead money...

Ok here one that doesn't rely on any 'ifs'

There is a 2 bed terraced house not far from me up for sale at £185000. The interest only mortgage on this would cost in the region of £800 per month.

The house two doors away. Identical virtually and not in dissimilar condition is available to rent for £550 per month. So you rent it and save the extra £250 per month. The houses in my city in general are not increasing in price at all, many are decreasing slightly in fact so the argument that so many people come out with: that this house will cost you more in a year than the 3k you've managed to save in that time is not true in this circumstance.

If you can rent a house for less than the interest only mortgage would cost you, it is not dead money. And most places I look at to buy now, you could rent an equivalent house for so much less than the interest alone would be.

Martinslovechild

cupid_stunt wrote:

There is a 2 bed terraced house not far from me up for sale at £185000. The interest only mortgage on this would cost in the region of £800 per month.

The house two doors away. Identical virtually and not in dissimilar condition is available to rent for £550 per month. So you rent it and save the extra £250 per month.

It begs the question:-

How is the landlord renting this place out making any money?

I'm therefore assuming that he would have to have bought the place some time ago otherwise there's no way he would rent out a house for £550 which is costing him £800 on an interest-only mortgage.

The BTL mortgage lender simply won't allow it under their terms & conditions - you have to at least cover your mortgage payments.

To me this points towards the bottom falling out of BTL over the coming year or two...

Bargain_Rzl

cupid_stunt wrote:

If you can rent a house for less than the interest only mortgage would cost you,

and if you invest the difference between the two productively

it is not dead money.

talksalot81

Martinslovechild wrote:

It begs the question:-

How is the landlord renting this place out making any money?

I'm therefore assuming that he would have to have bought the place some time ago otherwise there's no way he would rent out a house for £550 which is costing him £800 on an interest-only mortgage.

The BTL mortgage lender simply won't allow it under their terms & conditions - you have to at least cover your mortgage payments.

To me this points towards the bottom falling out of BTL over the coming year or two...

Come to Northern Ireland, there are a great number of properties where these are the sums: I have found several instances where rental costs are less than 60% of the cost of an interest only mortgage were you to buy the property at market value.

eryn_kathleen

To quote from Martin:

I bought my first home at the age of 32 having saved up for it, so that I've never had a mortgage.

He obviously rented in order to do that!

Also, I know that the rent on our flat costs about half what the standard repayment mortage would cost on a similar flat, because we looked at buying an identical flat below ours. If I had realised that earlier, I would have started saving more for the mortgage a long time ago.