Renting v buying the figures are here

barnaby-bear

lynzpower wrote:

I completely agree with you Pbradley, although there is simply no shortage of people buying.

Additionally, the vast majority of potential buyers Im working with at the moment have above 30k deposits

But follow DFW and people saving £10k a year just by not spending it on cr&p and extra jobs and ebaying - follow those principles for 2/3 years and with two people that's £40-50k deposit if they've been doing it longer it's quite amazing the deposits some people have before any parental/inherited wealth thrown in.... Most of them sh&t scared that if they don't pile it into a house it'll hit 40% tax and once in house redundancy etc and benefits entitlements possible.

barnaby-bear

liz545 wrote:

I don't have a mortgage, so I'm not really sure how this works, but why is it better to compare rent to an interest only mortgage - I didn't think these repaid the capital? So isn't it just a question of paying rent either to the landlord, or to the bank? I mean, you'll only own the property if you repay the capital, won't you?

It's not WHO the landlord is - it's the tenure, the bank won't give you notice unless you stop paying them an AST it can be 2 months notice every 6 months :eek: (and they keep the deposit each time :mad: ).

Although you don't own the house it's like a share option - you have the option "buy" the house at 25 year ago prices or you can sell and use the difference between today and 25 year ago prices to buy lollipops or something.

benood

liz545 wrote:

I don't have a mortgage, so I'm not really sure how this works, but why is it better to compare rent to an interest only mortgage - I didn't think these repaid the capital?

An interest only mortgage doesn't repay capital which makes it a better comparison with renting - in neither case do you end up owning the property - ie the assumption is that at some point you sell the property and repay the mortgage which is analagous to moving out of rented.

In the OP's example the renter pays less each month but owns nothing in the end, while the purchaser owns a house - a very different final scenario.

Generali

You're not comparing like with like at all. What about the costs of ownership (e.g. buildings insurance, depreciation on kitchen, furnishings, decor, bathroom, roof, windows etc.)? Also, the cost of having to move more often in a rented place. The variation in rates of interest over time. The interest forgone on the deposit and the repaid amount of the mortgage.

That's before trying to put a monetary value on being able to paint the walls whatever colour you like, to be able to move cheaply if you change jobs to a new area, to have a perceived sense of security that comes from 'home ownership'.

I could go on as Mrs Generali will attest!

ollyshaw

Most of the renting v buying threads seem to have a slight bias in the figures begin presented (either owners or renters). I suggest that anyone who wants to know sits down with a spreadsheet and works it out for themselves. I did and I am confident I am better off renting (but then you should ignore this as I am biased ;-) ).

Olly

fivemice

But owning a house isn't just about money, surely?
It's also about having a place you can truly call home.

advent1122

fivemice wrote:

But owning a house isn't just about money, surely?
It's also about having a place you can truly call home.

Correctamundo.

I live in a home, as long as I pay the huge £167/month mortgage I can live here until my toes curl and I start to smell a bit mouldy.
I do not have the "worry" about my landlord deciding to sell up and give me a few months to pack everything away and move to gawd knows where.
I can paint my living room garish pink will yellow bunnies jumping over a lilac brook if I feel like it.
I have two smelly mongrels (3 if you count the wife) and did not have to ask permission to get them.
Call me old fashioned but I dont care how the numbers stack up buy V rent.
I like my likkle homestead.

fivemice

It's the same for me. I suppose on a moneysaving website it may be appropriate to argue it, but when it's a home you are after rather than a house as an investment there are just too many things that you can't put a price on and therefore cannot make a mathematical comparison.

chrisbunch

barnaby-bear wrote:

- if 40% tax payer you can offset against mortgage rather than pay tax on saivngs
.

Can you elaborate on this, or provide a link to further information?

Thanks,

Chris

barnaby-bear

chrisbunch wrote:

Can you elaborate on this, or provide a link to further information?

Thanks,

Chris

http://personalfinance.money.msn.co.uk/msnpf174.htm
http://business.timesonline.co.uk/tol/business/money/savings/article1294829.ece