Just an observation - Renting VS Buying

PasturesNew

sinizterguy wrote: »

Renting in most cases is less expensive than a repayment mortgage.

That varies, by area.... in some areas you can buy something smaller than renting, in others you can buy the same size of home, in others you can buy a bigger/better home.

Every town's different.

Graham_Devon

Niv wrote: »

Excluding London / individuals that move around the countryregularly due to work I really cannot understand how renting works out cheaperthan buying.

In very general terms, it doesn't.

However, if you rented in say 2006 and bought in early 2009, you could have saved quite a lot of money. Same at the end of the 80's, early 90's.

A lot of it really depends on the state of the market at the time.

Theres also other factors to consider, such as buying costs (stamp duty, solicitors fees etc) which can, in some quite average circumstances pay rent for around 6 months alone.

But overall, renting never works out cheaper than buying if buying and stating in that house for the longer term. For a couple I know, who never sem to be happy, they would have been far better off renting, having moved 3 times in 5 years, paying fee's over and over again....but these people are outliers, not the norm.

Niv

Graham_Devon wrote: »

In very general terms, it doesn't.

However, if you rented in say 2006 and bought in early 2009, you could have saved quite a lot of money. Same at the end of the 80's, early 90's.

A lot of it really depends on the state of the market at the time.

Theres also other factors to consider, such as buying costs (stamp duty, solicitors fees etc) which can, in some quite average circumstances pay rent for around 6 months alone.

But overall, renting never works out cheaper than buying if buying and stating in that house for the longer term. For a couple I know, who never sem to be happy, they would have been far better off renting, having moved 3 times in 5 years, paying fee's over and over again....but these people are outliers, not the norm.

Totally agree with you regarding your friends you mention.

The problem with this:

'However, if you rented in say 2006 and bought in early 2009, you could have saved quite a lot of money. Same at the end of the 80's, early 90's. '

is that it can only be realised by looking in retrospect and therefore imo it serves little purpose beyond academic interest, as you acknowledge if you buy, and stay, over a long term buying is cheaper overall.

Regarding buying costs, you are of course right that there are some, however, this can also be balanced with some of the renting costs; deposit (theoretically you get it back - but you still lose it during the rental period), moving costs, renewal fees, professional cleaning fees, costs due to disputes with LL (last two I got from looking at threads on this site). I can assure you, for the example I gave at least, the costs were not even close to the equivalent of 6months rent - much closer to two.

CLAPTON

Graham_Devon wrote: »

Secondly, if that's the advice for those who can't afford places in London, where are London going to get the lower end workers from? Those who serve you in shops? Those who empty the bins? Those who make the beds in the hotels?

if there was a genuine shortage of workers in London at whatever level, then the price of their labour will rise until the jobs are filled or the work deemed un-necessary or new technology takes over.


it's really that simple except in the public sector where a there will be a long delay with much hand ringing before pay rises are agreed.

IronWolf

You know we had this exact same thread a few months ago, that included a calculator to work out which was cheaper

https://forums.moneysavingexpert.com/discussion/5029462