Buying is £124 a month cheaper than renting

Cuckooclock

If we hadn't bought when we did things would be very different now for us, my husbands pensions didn't pan out as it was suggested. Remember all that with the pensions some years ago, if we had to pay rent now we would have a very frugal life style. Ok we have maintenance but that is not that much, also it allowed us to move where we wanted when family circumstances changed.

MaxTheCat

MrRee wrote: »

You will be surprised ...... in 10 years time you should be able to overpay - thus reducing the time substantially.

I do hope so ..... it's great being free of a mortgage and rent!

In 10 years time interest rates won't be as low as they are now so it's debatable wether overpayments will be possible given today's extremely low interest rates.

Twiggy_34

Soleil_lune wrote: »

As for the rest of YOUR post, you started buying in 1991, which was almost a quarter of a century ago. I said it's not worth buying THESE DAYS! Maybe you should read posts thoroughly before you start spouting stuff.

Mostly it's all down to personal circumstances, good planning, and a spot of luck as well as personal preferences of course.

My DP & I rented until around 18 months ago. We moved from a 2 bedroom flat into a slightly smaller 2 bedroom flat, but in a quieter/nicer location and gained outdoor space which we didn't have previously (in the form of a roof terrace). The mortgage repayments are £120 less than what we had been paying in rent, the monthly outgoings are about equal and the mortgage term is only 20 years. We are fortunate to be in a position where we can already overpay our mortgage, but this still comes to £50 a month less than our previous rent was and should decrease the term of the mortgage by 4 or 5 years. We had to spent around £4k in the first year and apply a ton of elbow grease to bring the flat up to a decent standard but in doing so, as things currently stand, we've increased the value by £20-£45k, and we still have improvements to make.

In 3 years at the old flat we spent almost £20k on rent. Something we will never get back. The way I look at it, at least any money spent on this place for maintenance or improvements is an investment rather than going down the drain - or more specifically lining someone else's pockets.

With regard to that last remark, don't think it means I'm against landlords, due to unfortunate circumstances (the passing of my dad just over a year ago) my sister and I found ourselves inheriting a 3 bed house. Circumstances dictated that the best thing to do was to let it out; this too cost in excess of £4k to set up and deal with maintenance issues since, but we're still in profit and are very lucky to have lovely tenants.

My view is that buying is the way to go IF circumstances dictate that it's a viable option for you. Instead of being dependant on the government it means that you should have a degree of security for years to come, even if it it's necessary to sell and buy something smaller, more affordable or whatever. It is also something which can be left for your kids (if you have any) to inherit.

[Deleted User]

MrRee wrote: »

What utter, utter, tosh ................... ha ha ha ha ha ... NOW the rent lovers wheel in that IF you bought APPLE shares in 2002 rather than buy a house you would be RICH!!

I'm not a "rent lover", I plan to purchase my own property in the coming months and don't have any intention of renting forever. I am however someone who understands where the value in renting lies, renting has given me opportunities I would not have had if I had bought a couple of years ago.

MrRee wrote: »

Ha ha ha ha ha ...... OK, let's play the silly game - IF you had invested in the 90% of other companies who went bust since 2002 ... you would have lost all that money AND thrown all that other money away in rent!

I don't see your point. There is the undeniable fact that there are situations in which someone can use renting to their financial advantage. There is the undeniable fact that putting your entire net worth into an illiquid asset is not the best financial decision for everyone. Sure, for the "average" person in a stable job who has no plans to ever move or change their life in any significant way and is focused on security over financial gain purchasing their home is a very good decision... but that doesn't mean renting is stupid or wasting money or a bad decision.

If you don't want to accept that there is more to it than the raw monthly cost so be it.

Anatidaephobia

I can see the appeal in renting. I did rent for several years and it felt easy and cheap, particularly when things went wrong and needed replacing and I didn't have to pay for it.

A few years ago, I would not have been able to buy a 3 bed house in my area because the prices were too high for me. The recession has worked in my favour, in this respect, because the prices fell and I was ready to buy at the right time.

Judging from the houses to let on rightmove, it would cost an additional £330 - £350 PCM to rent a house similar to mine in the same area. I am happy that I bought when I did but I do sometimes envy the freedom of renters to move around more easily.

jules888

Soleil_lune wrote: »

I agree with some people on here; the report in the OP is a load of bolleaux.

When people ramble on about how much better off you are buying if it's eg; £100-£150 a month less than renting, they always totally, totally forget all the maintenance and repairs and upkeep of the property. And there are so many things that you cannot do yourself now, as it often invalidates the insurance if it's not done by a registered professional.

Then there are the additional insurances, and all kinds of hassle that you don't get with renting. You're far more tied down with buying too, and if you have a horrid neighbour all of a sudden you can forget being able to sell! And also if you suddenly become unemployed, you're screwed, because DWP will NOT pay your mortgage, and there's always something in the small print that prevents the insurance company from paying the mortgage, and even when they do pay it, they don't pay it for long.

Buying is not the best option: not these days. I have heard numerous nightmare tales from friends and acquaintances this past few months alone. One friend moved into a house at the age of 52, and took on an extra £150K mortgage just to get a bigger house in a 'better' area, and within weeks, she had to fork out £3K for a new boiler. Another friend of mine has a mortgage and regularly has to pay out a thousand pound a time to have drains underneath the house unblocked and cleaned out, as she is at the bottom of a row of 12 houses and all the houses toilet waste comes to her and stays underneath her house. And the third one this year alone: another friend's husband has lost his job suddenly with no redundancy, and the insurance company have a 90 day waiting time before claiming (I mean !!!!!!?!) So he can't claim til the middle of June! So any savings they had (and there are little,) are going to go to pay the mortgage for the next 3 months. (Unless he suddenly finds a job of course.)

Like I said, buying is NOT the best option these days. I have done both: buying and renting: I choose renting every time. I have seen so many people who are buying, on the verge of a nervous breakdown.

OP, you're living in a different world to many other people. Your situation is NOT typical of the vast majority of people, and I don't know where the hell you live, or what kind of house you live in, but where *I* live, rent is around £500 a month, and that is for a 2 bed in a good area or a 3 bed in an average area. There's no horrible areas where I live, but in a 'rough' area about 10 miles from me, you can get a 3-bed house for £450. And a 4-bed for £500.

As for not having to pay anything when the house is paid for (and that will be when most people are pensioners!) People who rent will get housing benefit anyway at the age of 60 or 65, so it won't cost them anything either. So your 'argument' holds very little water.

Sorry not our experience at all!
Hubby and i have never rented.Bought 1st house at 21,next at 26.
Mortgage free by 40 and able to buy forever house for cash last year at 45.
Yes we"ve had to spend 11k on it up to now and have a new boiler still to get but we got 10k knocked off it anyway and arent getting chucked out of a rented flat in our 70s like my parents in law!

Jonbvn

Soleil_lune wrote: »

As for not having to pay anything when the house is paid for (and that will be when most people are pensioners!) People who rent will get housing benefit anyway at the age of 60 or 65, so it won't cost them anything either. So your 'argument' holds very little water.

Do you really think like this? If everybody did, we would soon be up sh*tcreek without a paddle.;)

BTW, we paid off our mortgage when I was 40.:p However, this is purely anecdotal like the rest of your post.

Pixie5740

It very much depends on your personal circumstances. The flexibility of renting has allowed me to move for jobs early in my career and gave me my personal freedom when I was younger and couldn't afford to/didn't want to buy (that was during the New Labour years when house prices were rising fast and my friends got on the ladder using Northern Rock's 125% mortgages).

Now I'm looking to buy but waited until I could afford a detached house as I don't want the hell of noisy neighbours I can't easily get away from.

The stigma attached to renting seems to keep many adult children home as they don't want to move out and "waste" money on rent yet don't want to buy a 1 or 2 bedroom starter home either. They want a house like their parents. I feel sorry for the parents.

chucknorris

Pixie5740 wrote: »

It very much depends on your personal circumstances. The flexibility of renting has allowed me to move for jobs early in my career and gave me my personal freedom when I was younger and couldn't afford to/didn't want to buy (that was during the New Labour years when house prices were rising fast and my friends got on the ladder using Northern Rock's 125% mortgages).

Now I'm looking to buy but waited until I could afford a detached house as I don't want the hell of noisy neighbours I can't easily get away from.

The stigma attached to renting seems to keep many adult children home as they don't want to move out and "waste" money on rent yet don't want to buy a 1 or 2 bedroom starter home either. They want a house like their parents. I feel sorry for the parents.

Of course personal circumstances can mean that renting is more appropriate, for example renting in London during the early part of a career when you don't have long term plans to stay there. I think the OP would accept that, I consider that this thread is restricted to the economic argument of renting v buying without such external factors favouring renting.

MrRee_2

I rented for 4 years - because I had to, but it did give me flexibility.

That said, I hate throwing money away, so hated renting with a vengeance .... and I'm sure most who rent would rather buy, whatever they say.

When in your 20"s that is OK ..... but, as you hit your 40"s and the mortgage is paid off - then it becomes a problem renting.

When you retire, and your pension goes on rent, its not nice ...... worse is when the council puts you in its worst flat in the worst area - that's just tragic IMO