Buying vs Renting (warning long post)

jonewer

mike_the_bike wrote: »

On balance buying that property at 23 was the best financial thing I managed to do.

One serious question..what exactly is "generation rent" going to do when they can no longer work?

Well done on not being born 20 years too late to be able to afford to buy a house.

Your serious question is indeed serious. It makes you wonder why the government is throwing yet more tax payers money at making houses even more unaffordable.

Cornucopia

jamesmorgan wrote: »

If mortgage rates are 5% and maintenance costs are 1%, then mortgage interest + maintenance = (roughly) rental costs (at 6% yield). The buyer is also paying off capital and has higher moving costs. This means for the early years, the renter pays less each year than the buyer so can contribute to savings. It is only once the buyer has paid off some of their capital, do annual costs for the buyer become less than the renter (in my model this is after approx 8 years). By this point the renter has already saved approx £50K. Even though in later years, the buyer's annual costs are less then the renter, the buyer never gains ground on the savings of the renter.

Fairly consistently in the SE where I live, rent and mortgage payments have been similar - over a period of decades.

Also, I never had a repayment mortgage. I just used accumulated equity to eventually get to be mortgage-free.

I guess that's another model entirely.

Lord_Baltimore

paddyrg wrote: »

Uncanny - what colour are my eyes and kids names?? ;-)

Two blue, one brown. !!!!!! and Dom . You shoulda bought a house instead of ruining their education through your nomadic lifestyle.