Benefits of buying?!

InhaleMood

Hi All,

We have been having a discussion at work about the benefits of buying a house over renting.

To be clear, I currently own a house (bought last year). I do love it, but I'm getting slightly itchy feet. The thought of being tied down here is slightly stifling!

So, I was considering selling my house, putting the money into an ISA and then renting - is that crazy?!?!

d70cw6

why do you feel you cant move house if you own it?

InhaleMood

I can, but obviously with the buying costs, it would be expensive to buy everytime I got itchy feet. So, I guess I'm thinking of getting off of the property ladder, as everybody else is trying to get on.....

samba

I don't think your money pot will grow as quickly in an ISA as it does paying a mortgage. 10 years ago when we bought our current house we had a deposit of £60,000, now we are looking to move and if we sell for what we paid, our deposit will be just over £100,000. Add to that the fact that we should be able to sell for around £20,000 more than we paid, and it seems like a no-brainer.

Additionally, our mortgage payments are half what our rent would be for an equivalent property, so we're even better off than we would be if we were renting.

fairy_lights

It's expensive to rent every time you get itchy feet too, you need the deposit and first months rent up front plus all the agency fees so that's easily a couple of grand.
Plus if you rent you can't decorate, can't have pets without permission, and have to put up with inspections.

teddysmum

and may get one of those landlords who doesn't do repairs etc..


The landlord could, also, sell up or be forced to sell, requiring you to move.

JimmyTheWig

tanyasharma wrote: »

So, I was considering selling my house, putting the money into an ISA and then renting - is that crazy?!?!

I think it would be crazy to sell up before you were ready to move.
Once you want to move then the obvious thing to do is to sell.
Whether you then buy again or rent is then the question.

For most people, in most areas of the country, it is significantly cheaper over the longer term to buy rather than rent.

But I accept that buying and selling is a long drawn out, stressful and expensive process.

If you are the sort of person who wants to move house every year then I would suspect that you would be better of renting.
Paying solicitors costs, stamp duty and estate agents fees every year would almost definitely (*) drown out anything you made on house price inflation and the difference between mortgage interest and rent.
(*) i.e. unless house prices shot through the roof


Would you be interested in becoming a landlord yourself?
If you kept your current place but rented it out you would be protected from house price inflation but still be free to move when are where you wanted.
But it's a lot of work, so not for everyone.

samba

tanyasharma wrote: »

So, I was considering selling my house, putting the money into an ISA and then renting - is that crazy?!?!

Just as a comparison, my brother had built up a similar amount of equity in his house as we had around 10 years ago. For various reasons (not financial) he had to sell up and ended up renting. Despite being in work, his savings have dwindled to almost nothing, so yes you are crazy in my opinion.

varghesejim

tanyasharma wrote: »

Hi All,

We have been having a discussion at work about the benefits of buying a house over renting.

To be clear, I currently own a house (bought last year). I do love it, but I'm getting slightly itchy feet. The thought of being tied down here is slightly stifling!

So, I was considering selling my house, putting the money into an ISA and then renting - is that crazy?!?!

There is no financial sense in renting when you can buy, provided you do buy sensibly. When I say you buy sensibly-it means you don't buy a new build house at an over inflated price and you buy a nice enough house in a nice enough area.

8-of-us

Could you let out your current house and still go and rent somewhere else?
From my current position I would say you are slightly crazy (just to use your term, I'm not actually saying you are) renting is so unsecure and expensive too.

Lord_Baltimore

You could always buy a tent. Is it the responsibility of house ownership that is stifling you or the (mistaken) perception of being tied to living in one place?

Some renters present their circumstances as a happy-go-lucky-born-to-be-wild lifestyle choice when it is sometimes truer to say they really have no choice.

You do. Choose carefully.