New research on buying versus renting at present

merlinthehappypig

This makes interesting reading in light of the recent threads about buying versus renting at present.

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=426278&in_page_id=8

Their conclusion is that the financial benefit of buying a home rather than renting over a 25-year period has tumbled by 75% over the past year – with tenants better off than owners in half the UK's regions.

sarkin

but at the end of 25 years you own the house while a renter will still have to find money each month. Maybe house prices need to come down a bit, but after 25 years it's better to buy than rent.

abaxas

sarkin wrote: »

but at the end of 25 years you own the house while a renter will still have to find money each month. Maybe house prices need to come down a bit, but after 25 years it's better to buy than rent.

That would depend on how well you invested the money saved from renting.

Who knows, u may be better off in the long run despite paying rent.

IveSeenTheLight

abaxas wrote: »

That would depend on how well you invested the money saved from renting.

Who knows, u may be better off in the long run despite paying rent.

Its a good job that there are a load of BTL's in your area to keep the rental prices down.

abaxas

IveSeenTheLight wrote: »

Its a good job that there are a load of BTL's in your area to keep the rental prices down.

I prefer to call them 'employees'. Keep working slave to keep a roof over my head.

pinkshoes

abaxas wrote: »

That would depend on how well you invested the money saved from renting.

Who knows, u may be better off in the long run despite paying rent.

True, but given our spend spend spent culture, the UK population aren't the best at saving and investing!

It's not about being financially better off after 25 years, it's about having security DURING the 25 years, and knowing that when I reach retirement, I don't have to worry about paying any rent. Plus it's MY property, and providing I pay my mortgage, no one can kick me out or force me to move, or bump my rent up, or deny me painting the walls etc... I wouldn't swap that for renting!

IveSeenTheLight

abaxas wrote: »

I prefer to call them 'employees'. Keep working slave to keep a roof over my head.

Do you mean the BTL LL's are employees?
Only very innefficient LL's maybe.

My rental yields cover the mortgage and a bit to spare which more than covers insurance, agency fee's, standard periods of unleased property months, maintenance etc.

I provide a very good service and in return I generally get good tenants who are paying the mortgages

Its the tenants who are working to pay off my BTL's.

abaxas

IveSeenTheLight wrote: »

Do you mean the BTL LL's are employees?
Only very innefficient LL's maybe.

My rental yields cover the mortgage and a bit to spare which more than covers insurance, agency fee's, standard periods of unleased property months, maintenance etc.

I provide a very good service and in return I generally get good tenants who are paying the mortgages

Its the tenants who are working to pay off my BTL's.

Paying someone to work for someone else. Doesn't that mean he is an employee?

Also he works on the side too, just to make sure he can afford the mortgage. Poor lad

nobblyned

"The homebuyer would own their property at the end of this period and according to the study they would be almost £6,000 better off than if they had rented."

So you are £6k better off on average over the 25 years, and you have a house.

That has to be good, no?

You are going to be significantly better off than the renter over the following years, that's for sure!

beingjdc

nobblyned wrote: »

So you are £6k better off on average over the 25 years, and you have a house.

That has to be good, no?

No - you misunderstand.

Say at the end of 25 years the buyer has a house worth £300,000, and £10,000 in savings.

What they're saying is that the renter would have no house, but would have £304,000 in savings.

Right now, I'd rather have the cash than a depreciating asset.

RabbitMad

This "research" is flawed as it doesn't take any account of HPI. Although some will argue that their is about to be a crash etc over 25 years you'd expect the house price to increase some what.
Then there is the issue of removal costs as the different LLs turf you out every 6-12 months.

All that said I think that for the short term now, if you don't already own renting might prove to be the correct way to go but it all depends upon peoples personal circumstances.