Record numbers of young forced to live at home

Hooloovoo

Carl31 wrote: »

You sure?

Obligation to pay that can be stopped with a months notice, or obligation to pay back a vast sum + interest which cannot be stopped, unless you pay it all back in some way or another

should the worst happen work wise, which position would you rather be in?

You're not looking at the bigger picture.

Say your rent is £600 per month today, and you buy a house on a 25 year mortgage also paying back £600 per month at 5% interest.

In five years, ten years, twenty years, the mortgage payment will still be roughly the same except for interest rate fluctuations. Only it will gradually take less of your salary as you achieve promotions and pay rises. Do you think the rent will still be at 2014 rates in 2034?

And if the worst happens, work-wise, you can always take out insurance to pay your mortgage while you get another job. You can't get insurance to pay your rent, and the government wont help you when you've got all those savings you've been building up for your deposit on a house ...

J_i_m

Additionally it's also an argument you can level at renting as well.

If you loose you job... it's not only "How are you going to pay the mortgage?" But also "How are you going to pay the rent?".

I think we can agree that neither mortgage nor rent magically disappears when you loose a means to an income.

I maintain that for me.. a mortgage will be more manageable than rent. My research tells me that in my area on comparable properties a monthly mortgage repayment will be significantly lower than the market rent on that property. This is true of my area, it may not be for yours as I gather London especially seems to have a micro market of it's own.

Therefore.. I'd be better positioned to allocate my income to savings, maintenance etc in the event that if I did loose a job I'd have a smaller shortfall of funds to find.

For example, finding £400 for a mortgage repayment is easier than finding £600 for a rent payment.

Hooloovoo

J_i_m wrote: »

For example, finding £400 for a mortgage repayment is easier than finding £600 for a rent payment.

And it gets even easier still for every year your mortgage goes by, and every year rents go up.

mayonnaise

Carl31 wrote: »

should the worst happen work wise, which position would you rather be in?

On a mortgage of course.

Hooloovoo wrote: »

And if the worst happens, work-wise, you can always take out insurance to pay your mortgage while you get another job. You can't get insurance to pay your rent, and the government wont help you when you've got all those savings you've been building up for your deposit on a house ...

Many mortgages also allow a payment holiday - especially if you made overpayments in the past.

Carl31

Hooloovoo wrote: »

You're not looking at the bigger picture.

Say your rent is £600 per month today, and you buy a house on a 25 year mortgage also paying back £600 per month at 5% interest.

In five years, ten years, twenty years, the mortgage payment will still be roughly the same except for interest rate fluctuations. Only it will gradually take less of your salary as you achieve promotions and pay rises. Do you think the rent will still be at 2014 rates in 2034?

And if the worst happens, work-wise, you can always take out insurance to pay your mortgage while you get another job. You can't get insurance to pay your rent, and the government wont help you when you've got all those savings you've been building up for your deposit on a house ...

Easy bro, i was just saying living with an obligation for paying rent would be easier to manage than undertaking a mortgage

not that renting is better or anything, dont panic

Carl31

ruggedtoast wrote: »

I am a pretty risk averse person, but based on your logic no one can ever buy anywhere unless they are already rich.

I have a mortgage I need an income to pay. I have insurance that will pay my mortgage for a year if I lose my job, and skills that I can employ to get another job.

I dont regret leaving rented for a second. Renting in the UK is awful. Instead of just arguing with the douches on this forum for entertainment you have to actually speak to them in person everytime the washing machine breaks.

that wasnt the point i was making, the poster said that a mortgage is easier to manage than a rent obligation

Worst case scenario, a renter can up sticks at a months notice, and move to somewhere cheaper/home with parents/into a cardboard box, not easy to do when you owe the bank £000's

Hooloovoo

Carl31 wrote: »

Worst case scenario, a renter can up sticks at a months notice,

Can you? Don't you enter into a contract with your landlord for a certain amount of time? I doubt many people are living on one-month rolling contracts.

And I still disagree with your initial premise that rent is easier to manage. Given that mortgage payments are generally lower than rent payments for an equivalent house, and that ratio will only ever improve as rents go up and mortgage payments remain the same, I would say a mortgage is much easier to handle especially as the years go on.

Of course, if the majority of renters really can quit at just one month notice then I will happy stand corrected.

ruggedtoast

Carl31 wrote: »

that wasnt the point i was making, the poster said that a mortgage is easier to manage than a rent obligation

Worst case scenario, a renter can up sticks at a months notice, and move to somewhere cheaper/home with parents/into a cardboard box, not easy to do when you owe the bank £000's

Well, I have never had a rental without at least a minimum 6 month term, usually they want you to keep re-signing for repeat 6 month terms.

Long enough to be properly inconvenient without offering any security of tenure.

Loughton_Monkey

Carl31 wrote: »

that wasnt the point i was making, the poster said that a mortgage is easier to manage than a rent obligation

Worst case scenario, a renter can up sticks at a months notice, and move to somewhere cheaper/home with parents/into a cardboard box, not easy to do when you owe the bank £000's

If you've just taken out a mortgage, and lose your job, then that's tough.

But most of the time, after a few years, there's quite a bit of equity there. If you go to the bank and explain totally honestly what's going on, then 99% of the time they will bail you out perfectly well. It's not in their interests to simply throw you out.

I'd much rather this than have to pay 6 months rent [the usual notice period] when no landlord is going to give you any 'forebearance' whatsoever. You're out on the streets if you haven't yet found a job.

If you become long term unemployed, then you are in the poo whatever.....

Carl31

ruggedtoast wrote: »

Well, I have never had a rental without at least a minimum 6 month term, usually they want you to keep re-signing for repeat 6 month terms.

Long enough to be properly inconvenient without offering any security of tenure.

Ok, i wasnt aware 6 months was the norm, our letting agents 'norm' is 2 months notice from the landlord and 1 month from the tenant, as far as im aware