Should I rent or buy?

kissingthepink

This is a no brainer as far as I am concerned. BUY and stop wasting your money on rent. Don't wait - after all prices could go up and you could have to pay more for the same property in the future.

m00m00

Prices COULD go up, but in the short term they are vastly more likely to stay flat or reduce.

the cost differential between renting and buying in many areas weights the decision very much in the direction of renting in the short term. However, there is no 'one size fits all solution' for everyone. The notion that rent is 'wasting' money, is usually espoused by people how have no real grasp of compound interest, and how mortgages actually work.

tr3mor

kissingthepink wrote: »

This is a no brainer as far as I am concerned. BUY and stop wasting your money on rent. Don't wait - after all prices could go up and you could have to pay more for the same property in the future.

You must have put a lot of thought into that! :rolleyes:

Prices aren't going to go up by any significant amount this year.

One year's rent is going to be a lot less than one year's mortgage payments. The OP can pay the difference into a regular saver account. Then when s/he comes to buy they'll have a bigger deposit.

Romani_Ite_Domum

jules9 wrote: »

Looking to seek out flat/small house early next year.

Best advice I can give is to look at the market in your area between now and early next year. Get a feel for the real market. List properties that would be contenders and track them. This way, in a few months, you can gauge if your market is going up down or sideways.

If it is down or sideways then the best option would be to rent and continue to track your market and also what it happening with interest rates and economy.

Renting is only wasting money if HPI is positive. In my area, renting only becomes more expensive overall if HPI is +2-3% YOY at current IRs.

beingjdc

kissingthepink wrote: »

This is a no brainer as far as I am concerned. BUY and stop wasting your money on rent. Don't wait - after all prices could go up and you could have to pay more for the same property in the future.

Are you being ironic? Rent at the moment for the same property is way less than mortgage, lawyers, stamp duty, etc almost everywhere in the country. Plus if you rent you're not landed with an asset which most experts believe is currently falling in price.

kissingthepink

tr3mor wrote: »

You must have put a lot of thought into that! :rolleyes:

Prices aren't going to go up by any significant amount this year.

One year's rent is going to be a lot less than one year's mortgage payments. The OP can pay the difference into a regular saver account. Then when s/he comes to buy they'll have a bigger deposit.

But they are at the point where they are ready to buy. Why wait, save and pay rent forever?

kissingthepink

beingjdc wrote: »

Are you being ironic? Rent at the moment for the same property is way less than mortgage, lawyers, stamp duty, etc almost everywhere in the country. Plus if you rent you're not landed with an asset which most experts believe is currently falling in price.

No, I am not being ironic, just dispensing advice. I have been hearing about this impending property crash for the last ten years and was hoping to be able to buy when prices had corrected. Did this happen? Of course not....prices continued to rise. There is no gurantee that they will not rise further.

beingjdc

kissingthepink wrote: »

But they are at the point where they are ready to buy. Why wait, save and pay rent forever?

This is something of a myth.

If you pay a mortgage at greater than the interest you eventually pay it off, but the same is true of rent - if you can afford more than the rent (and given that it's so much lower than a mortgage, most renters who could buy can), and you put that in your savings, then eventually the interest on your savings will be more than your rent.

There is no guarantee that house prices will not rise further - and I'm sorry you've been waiting ten years, it was pretty clear in 1997 that house prices weren't going to fall further, they'd already collapsed! But switch on the BBC news. Chartered Surveyors say they are falling.

WTF?_2

kissingthepink wrote: »

No, I am not being ironic, just dispensing advice. I have been hearing about this impending property crash for the last ten years and was hoping to be able to buy when prices had corrected. Did this happen? Of course not....prices continued to rise. There is no gurantee that they will not rise further.

Absolutely :rolleyes: - They will go on rising like they have, forever and ever and everyone with property will be RICH! Rich beyond their wildest dreams. Muahahaha.


Meanwhile, in the real World, the house price boom is petering out. Maybe the government can stimulate it again like they successfully did in mid 2005 but that's unlikely. The 'best' outcome the housing market can hope for is stagnation but most likely it will decline to some extent. All in all, not the time to buy.


The only way it would make sense to buy now is if the government decides to pursue a fiscal policy that allows strong price inflation in order to stimulate growth (and assuming growth is stimulated) like they did in the 70s. In that event, I concede that buying a house even now, might make sense.

kissingthepink

beingjdc wrote: »

This is something of a myth.

If you pay a mortgage at greater than the interest you eventually pay it off, but the same is true of rent - if you can afford more than the rent (and given that it's so much lower than a mortgage, most renters who could buy can), and you put that in your savings, then eventually the interest on your savings will be more than your rent.

There is no guarantee that house prices will not rise further - and I'm sorry you've been waiting ten years, it was pretty clear in 1997 that house prices weren't going to fall further, they'd already collapsed! But switch on the BBC news. Chartered Surveyors say they are falling.

The problem with this savings plan is the tax element. You are giving at least 20% of ithe interest away, or a staggering 40% if you are a higher rate tax payer. When I consider the amount of tax you would pay out I think I would be even more tempted to rather buy a property than to save. And you have to be extremely disciplined to keep the savings up for a long period of time. How many renters actually do this in practice?