Why do people pay such high rent?

Callie22

When we rented, the amount that was deemed affordable in monthly rent was far higher than the amount that was deemed 'affordable' for a monthly mortgage payment. We were able to rent nicer properties in a better area than what we were eventually able to buy, and that was a bit of a factor in why we rented when, on paper, we could afford to buy.

There are also other reasons - you can (generally) get out of a rental contract much more quickly, cheaply and easily than you can sell a house, so if your employment isn't that steady or you think you might want to change jobs or move area then it's easier to do that when you're renting. For us, we also rented because we knew that in order to afford a home one day we would have to leave London, so it gave us a chance to change jobs and try out different areas before committing. I also think that (particularly for London) generally all of your contemporaries are paying massive rents and it's just normal, and you don't really see what you can get for the same money elsewhere. It was certainly a huge eye-opener for us when we started looking at rentals out of London and realised that for less money than we were paying for a one-bed flat in a grotty area, we could have a three-bed semi with a garden and parking in the 'better' part of town.

lookstraightahead

caprikid1 wrote: »

I paid off my first house of 5 years ago, the Mortgage was never higher than the rent.


At no point did having a house reduce my flexibility, I went to Hampshire, London and could have gone to other parts of the world to live, I just had lodgers or rented it out.


I can now live rent free if I wish in that location.

I bought at 21 keen to pay off my mortgage early. At 30 I had a lovely house and a small child. At 32 I had an acrimonious divorce, ended up with negative equity, no job and unable to pay the mortgage as a single parent and ended up in lots of debt. I wish to god I hadn't had a house to deal with in the first place, I would now have been a lot better off. Thankfully that's all over now but the house ownership was a chain around my ankles.

Crumble2018

caprikid1 wrote: »

Your forgot to add, 2 decent holidays a year, 2 city breaks, 2 nice cars on lease and a meal out once a week.


"We just aren't able to save a deposit due to our rent being so much !"

Gosh this forum can be so judgemental sometimes!

For us, we have some debt (down to my overspending during a period of poor mental health) and we have car finance, but we haven't had a holiday in 12 years, eat out about twice a year, don't drink or smoke or have expensive hobbies. A big part of the reason we cannot afford to save a deposit is that we live in the South East, but don't have high earnings.

lookstraightahead

Crumble2018 wrote: »

Gosh this forum can be so judgemental sometimes!

For us, we have some debt (down to my overspending during a period of poor mental health) and we have car finance, but we haven't had a holiday in 12 years, eat out about twice a year, don't drink or smoke or have expensive hobbies. A big part of the reason we cannot afford to save a deposit is that we live in the South East, but don't have high earnings.

You don't need to justify yourself. I think some people think they are more successful when they own and there is a stigma attached to renting. It's not necessarily the most savvy decision to buy, for all sorts of reasons.

I'm in a position to buy again now with a lot of equity to invest (relatively). I'm in no rush and might not ever do this, haven't really decided yet. Lots of my family rent privately out of choice.

Crumble2018

lookstraightahead wrote: »

You don't need to justify yourself. I think some people think they are more successful when they own and there is a stigma attached to renting. It's not necessarily the most savvy decision to buy, for all sorts of reasons.

We are in the middle of the buying process - I hate renting, but thats because I want control over my own home instead of being beholden to a landlord.
But sometimes people make poor choices and mistakes - it's not all because we are out socialising and having expensive holidays!

lookstraightahead

Crumble2018 wrote: »

We are in the middle of the buying process - I hate renting, but thats because I want control over my own home instead of being beholden to a landlord.
But sometimes people make poor choices and mistakes - it's not all because we are out socialising and having expensive holidays!

In my case (as per previous post) I was beholden to my mortgage company, massive interest rises and a housing crash. Not saying there's not as many risks with renting, but at the moment I would rather invest in things other than property (having been bitten before). I didn't make any mistakes really except marrying the wrong person (lol) it was stuff out of my control.

I'm really enjoying renting, but maybe that's because I do have choices now.

Voiren

We have the deposit, but wouldn't be able to afford to buy where we currently live in London and would have to go much further out. (And because we've been here a while and not had regular rent increases, we are still paying quite a bit under current market rent). And we don't really have the time or inclination to house hunt properly... Should do eventually, but we're comfortable.

It has only been recently that we've both been on permanent contracts too, rather than continuously-renewed short term ones, which adds uncertainty.

And yes, it would mean we couldn't suddenly decide to get jobs elsewhere in the country.

lookstraightahead

Cakeguts wrote: »

Some people just cannot save money. It doesn't matter how much they earn they will never have any savings.



We let property in an expensive area. If our tenants moved 2 miles away they could rent a property for around £200 per month cheaper. In the years that they have been renting in the expensive area they could have saved enough deposit to buy a house in a less expensive area. Some of this renting at high rents is down to choice of area to live in.

Your tenants sound like we were. We rented in a really expensive area through choice and because we could afford it (in the same way people buy more expensive houses). Our landlord probably thought the same. We didn't buy because we knew after a few years we would be completely relocating as we have done now. We could never have done that if we had bought the same house we rented. Nothing is budging. It's actually empty now, had been for months.

shortcrust

lookstraightahead wrote: »

Can I twist the question? What if you asked "why do people tie themselves into 25 years of buying earth instead of giving them flexibility to see the world" (no one needs to justify their reasons it's just a choice). Renting isn't a lesser choice it's equally as valid.

That’s true but renting is a choice that can cost you hundreds of thousands of pounds in the long term and requires a much bigger retirement income if you never buy. I wonder if anyone has ever thought “oh I do wish we’d rented!” as they made their final mortgage payment.

I bought in my 40s and don’t regret all the years of renting. I simply wasn’t ready to buy before. A lot of things have to come together at the right time to give you both the opportunity and inclination.

lookstraightahead

shortcrust wrote: »

That’s true but renting is a choice that can cost you hundreds of thousands of pounds in the long term and requires a much bigger retirement income if you never buy. I wonder if anyone has ever thought “oh I do wish we’d rented!” as they made their final mortgage payment.

I bought in my 40s and don’t regret all the years of renting. I simply wasn’t ready to buy before. A lot of things have to come together at the right time to give you both the opportunity and inclination.

I really really wish I hadn't bought at 21 and it cost me so much in the long term.

I think buying in your forties is a good idea actually. I cringe when I hear people saying "buy as young as you can" or "live for multiple years with mum and dad when you're an adult so you can save" or "buying is do much more secure". All things being equal and looking at finances only then yes, it might work out better. But life ain't like that most of the time. I don't want my daughter to come back and live with me after uni purely so she can save money. I want her to rent with her mates, make good sound career choices with flexibility, travel, move around, make mistakes etc. I don't want her to buy some cement and ground so that when she's 50 she can retire.