The Great Pensions Crisis - Channel 5

Anonymous101

I've owned two houses and rented one.


Maintenance certainly does run into thousands per year. What do you think you'd spend on a house in 25 years? A new roof, windows, front door, a boiler or two, a new bathroom and kitchen, a couple of rounds of decoration, new carpets a couple of times over. That's certainly more than £25k.
How much did you lose in stamp duty when you bought it? What did you pay in legal fee's, estate agent fee's. Its not just a straightforward rent vs mortgage.


All I'm saying is in the case of elderly people which may not be able to carry out or finance maintenance I think that there's certainly an argument that selling their property at a point in time and then investing the equity whilst renting is worth considering.

Malthusian

Anonymous101 wrote: »

But I'm not aware of a private rental situation which overcomes this.

Offer your landlord a subsantial premium over your current rent if they'll commit to a binding long-term tenancy with inflation increases. Unless they're planning to sell up in the near future, and assuming you can show that you have a secure income to pay it (which a retired pensioner should if they can afford to make the offer), they'll probably bite your hand off. Landlords love secure income and hate void periods.

What isn't a solution is to expect a long-term binding tenancy agreement at the same rent as a more flexible tenancy.

Not many people in the UK want to be tied into long-term tenancy agreements because most people with a secure source of income and willingness to be tied down to one property buy one. Those who don't have enough income to make home ownership realistic join the queue for council housing / sheltered housing.

Brilley wrote: »

Assuming the average rent is around £500/ month then this is only just covered by the average state pension with not a lot left over particularly if you are single and not eligible for the max. pension.

If you are single and not eligible for the max State Pension, and have no other income / assets, Pension Credit will top you up to just below a max SP.

Someone with no other income than State Pension would not be looking at renting an average property. They have a substantially below average income and will be looking for a substantially below average rental.

Ganga

Anonymous101 wrote: »

I've owned two houses and rented one.


Maintenance certainly does run into thousands per year. What do you think you'd spend on a house in 25 years? A new roof, windows, front door, a boiler or two, a new bathroom and kitchen, a couple of rounds of decoration, new carpets a couple of times over. That's certainly more than £25k.
How much did you lose in stamp duty when you bought it? What did you pay in legal fee's, estate agent fee's. Its not just a straightforward rent vs mortgage.


All I'm saying is in the case of elderly people which may not be able to carry out or finance maintenance I think that there's certainly an argument that selling their property at a point in time and then investing the equity whilst renting is worth considering.

We have lived in our house for about 27 years now,never touched the roof,had the boiler changed once,had new windows and doors fitted,changed carpets a couple of times and decorate ourseves,i fitted a new bathroom and a new kitchen BUT have not spent anything like £25k on it.

GibbsRule_No3

With this talk about renting and secure tenancies I wonder if there is a gap in the market for BTL properties that can be rented to just over age, say 60+ people? I know there are lots of properties that can be bought by over age people wanting to downsize. If you have had the chance to buy your own property but in later life would like a release of money to enjoy your life or give money to children before they need to pay death duty, it might be something to invest in. My tenancy is assured but it is HA property, that I swapped for a two bedroom property. Win, win for me, I would not want to move again as it is ground floor, group of just 12 bungalows, over age limit on them and close to bus routes, granted it is in Surrey.

Dorian1958

“
I think security of tenancy is the main factor stopping owners changing to renters in old age.

What sort of tenancy agreement is your elderly tenant on? What would happen to them if your circumstances changed and the property was no longer available to rent?
Originally posted by Sea Shell
”

My tenant is on a Scottish private rental tenancy. She has had one rent increase of £15 per month in approaching 3 years as a tenant. The property is mortgage free and I don't anticipate my circumstances changing so that she would need to leave before she elects to do so, and as she is now in her nineties and terminally ill I wont be increasing her rent either.

nigelbb

p00hsticks wrote: »

You are assuming that the majority of BTL landlords have just gone out and bought a fully mortgaged house and immediately rented it out. That simply isn't the case.

Private landlords who have paid cash, owned for a while and paid off most of the mortgage or inherited their properties can charge below mortgage -level rents and still make a profit.

And in rural locations (and elsewhere) you can still find places where many properties are rented out by the historic large landowners, with the tenants having lived there all their lives and having protected tenancies

A quick glance on https://www.rightmove.com will confirm that in general the rent asked for a house is more than the cost of the mortgage necessary to purchase that same house & in some cases much more.

[Deleted User]

There are several uncertainties and the answer depends on “where” and “when” but on average, renting is cheaper.

What many of the comments seem to ignore is the cost of lost opportunity, which is huge. You can buy a 1M house or, if you rent, you can invest 1M. The expected long term real return on a diversified portfolio is large and should not be ignored. It will provide the cash flow which will cover the rent several times over.

People, particularly the elderly, are wired to own a house. That’s fine if they can afford it (I own one) but not a good idea for a retiree to have the majority of his/hers money tied in an illiquid non-diversified pile of bricks.

Brilley

Deleted_User wrote: »

There are several uncertainties and the answer depends on “where” and “when” but on average, renting is cheaper.

What many of the comments seem to ignore is the cost of lost opportunity, which is huge. You can buy a 1M house or, if you rent, you can invest 1M. The expected long term real return on a diversified portfolio is large and should not be ignored. It will provide the cash flow which will cover the rent several times over.

People, particularly the elderly, are wired to own a house. That’s fine if they can afford it (I own one) but not a good idea for a retiree to have the majority of his/hers money tied in an illiquid non-diversified pile of bricks.

..not sure were the £1m comes from in the first place?......do you get a bank loan?

vulcanrtb

To think there are people visiting this site for advice and reliable information.

Robwales

what kind of pension pot would you need to drive £47.5k?


£15,700 minimum
£29,100 moderate
£47, 500 comfortable