Should we get a Mortgage or start investing?

jimjames

taracauc wrote: »

Thank you to everyone who has commented. I understand the point about rents going up vs mortgage going down. (I also this BTL is a different strand to this linking as someone else covers the mortgage in a BTL.)

Here are a few articles:

dailyfinance.com/2014/07/19/the-worst-investment-you-can-make-buying-a-home/

jamesaltucher.com/2013/08/five-things-you-need-to-know-before-buying-a-house/

nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0&abt=0002&abg=0/

Are you in the UK?

If so those US articles are not particularly relevant? The property market is very different here to there as well as vastly different social security and pensions systems not to mention that here mortgage is likely to be less than rent rather than being more in the USA.

fairleads

jimjames wrote: »

How many people use their investments to pay rent in retirement vs how many live in their own property not paying rent.

I'd suggest the vast majority who are paying rent have no investments.

The OP is in the fortunate position of having options and choices, whereas many don't, therefore confirmation bias has no bearing on the OPs question, whereas hindsight /experience does. I'm just highlighting one option based upon experience.

ViolaLass

If houses renting for 3/4 of the mortgage payment were generally available, a lot more people would choose to rent, wouldn't they? Our mortgage is 2/3 of what it would cost to rent, for example.

kangoora

fairleads wrote: »

The OP is in the fortunate position of having options and choices, whereas many don't, therefore confirmation bias has no bearing on the OPs question, whereas hindsight /experience does. I'm just highlighting one option based upon experience.

Well, I'd much rather own a home free and clear - which could be used for equity release if I so choose.

I wouldn't want to be in my 70's or 80's and be at the mercy of a landlord and, potentially, have to up sticks and move house every couple of years at that age because successive landlords decide they want to sell the properties.

kidmugsy

Is this any help?
http://monevator.monevator.netdna-cdn.com/wp-content/uploads/2011/12/real-house-prices.jpg

P.S. The Tel had an article the other day that pointed out that the frequent airy assumption that rents have kept going up in recent years is wrong. Simply, as a matter of fact, wrong. I dare say people get fascinated by rents in the more desirable parts of London and ignore everywhere else.

twisterzzz

I think OP is right, especially if you look at the current climate. Property prices are at its peak [if not near peak]. I would usually NOT agree with the statement that buying a house is poor investment but you really don't want to buy when prices are at peak.

Personally at this time I would not invest in a property in London, governments are/will do everything to bring the property prices down and when that happens, you can easily go in negative equity.

Same thing goes with stocks or any type of investment for that matter, you need to buy low and sell high.

AndyT678

twisterzzz wrote: »

governments are/will do everything to bring the property prices down

Really? I don't think I could name a single policy by any recent government designed to do that.

atush

If anything they seem to want to help them go up.

twisterzzz

AndyT678 wrote: »

Really? I don't think I could name a single policy by any recent government designed to do that.

Well, that so called "help to buy" kind of schemes are designed to do that, weather they're working or not, that's a different discussion.

With the property prices going through the roof [especially in London] the pressure to bring the prices down to a realistic level will mount. For that reason now is not a great time to buy IMO and sooner or later the property bubble will burst IMO.

However, from a long term investment [~25 years plus..] point of view, may be you shouldn't be that concerned as over a long term graph property prices will keep an upwards trend [most likely]. However even what that said you really should AVOID buying when prices are at peak. So if you really want to maximize your profits you should wait for market to cool down.

That's just one side of argument from investment point of view, however if you really want to own your own place and not too worried about short term noise about price peaks and drops, just go ahead and buy it and over the long term you'll be better off and like others have said you'll have a place to live.

Waldorf_Statler

whether the weather be hot

or whether the weather be not

i'll weather the weather, whatever the weather

whether you like it or not