My obsession with not buying in UK - Prove me wrong

RobHT

I know it's provocative, all over again here , but here it is, I'm convinced that buying is worst here if the current prices will be maintained over time (as well the increase considering the last 10y), so this is the assumption of this post, now let's break it down.

House cost: 350k
Interests: 350 * 1.3 = 105k (it may be between 105-150k). For my calculations, I consider the minimum, therefore, 455k total house cost.
House maintenance: 20k
Reconstruction: 50k (wanna be home owners need to reconstruct the house)
House insurance 30y: 7.2k (I don't pay it if I rent)

If my rent remains the same (1k), I'll pay 360k in 30y...

Obviously, I need to make other assumptions:
1. I didn't consider inflation, but that will impact the mortgage most probably, not the rent prices, it's not that easy to increase. For example, in the last 2y of pandemy it didn't increase
2. Interest rates can vary a lot, but I considered the lowest in my comparison
3. Home owners are supposed to live there for the rest of their life, but for how long? Me at 70 would look like someone with the need of intensive care most probably...
Let's assume I'm 25, 30y distance means I'll be 55, let's consider even 10y more otherwise the comparison can't stand (without considering my pension), I'd spend 120k more.
Let's add 120k more for other 10y, so I'll be 75 and then straight to intensive care, assuming I'm not dead.
So it's 240k more.
360k + 240k = 600k rent

Expenses with renting an house: If I consider the inflation, I may finish to spend even double than that, let's assume 1M.

Expenses with buying an house: 350k + 105k interests + 50k reconstruction + 7.2k house insurance + 20k regular maintenance = 532k.


Someone would say "well man, you replied to yourself".
Well, actually not.

How shall I feel great above owning such level of debt that could bankrupt me? I could lose also all my equity, plus the bank has to approve the sale of the building, you totally depend from the bank.

Staying always in one place and one country? No thanks.

Owning one big asset and put all my money in it? Yes, the house insurance could pay out, but it won't sort out the short term financial shock.
It also depends what the insurance will pay, reconstruction or pay out, in case of the first, good luck to reconstruct an house that went in fire.
You also need to pray that the insurance will pay, there are certain conditions where it doesn't pay...
What about the gap insurance? I'm not so sure it will cover than scenario after 20y for example.

With the rent I'm free, out of troubles, not in debt with the bank, free to take work opportunities where I feel more comfortable, ready to downsize if needed.

In all that, I add the following:
1. I own critical illness insurance (75 pounds, it covers a lump sum of 150k)
2. I should own a permanent disability or illness insurance too, that can guarantee a regular income, I'm sorting it out. (aprox 25 pounds)
3. ACS insurance (50 pounds, it includes also the unemployment insurance, though all of them cover only for 12 months)
4. Permanent Health Insurance (5 pounds, it covers just common things)
5. Life insurance. Company benefit. I won't benefit from it though .
6. Private health insurance (PHI). Usually every company offers me that, otherwise it would cost me probably 150 pounds as of today, in 10y distance even double...

Sad part of renting
1. You will never get what you want, most probably
2. You can't modify your building, make extensions, making the garden and other things
3. Garage eternal issue - It seems that in UK the garage is a privilege, as well as a decent sized house, no comment on that or I'll be banned.
4. In less than 20y, the place where you live will become... well ... a drug selling point...
It happened to me in 3 locations I've been in only 3y... Several crimes etc, like ambush etc, unbelivable, all reputable locations built only 10y ago, can you believe it? I DO, I LIVED IT.

Nice part of renting long term
1. Possibility to retire in a more appropriate place for pensioners, maybe seaside locations and not UK, but UK will reduce my pension (why not )
2. Moving due to the job demand, that's the most important things. As a renter and no cover from parents, I depend from the job, full stop.

I add the who buys an house has to consider the re-mortgage payments quite frequently, but I also need to re-consider the possibility to be kicked out many times, so I consider this as pair.

Over to you, prove me wrong .

JuzaMum

I don't need to prove you wrong. We all do what is right for us.
I bought in 2004 when prices locally were at a high. I lived in the house since then, the mortgage has never been more than rent would be and now is less than the cost of renting a room. We have made changes to suit us as our lives have changed. It has worked for us (family with children) and I have no regrets.

74jax

Why do you want to be wrong (or right)? 
Just be happy with your thoughts. 

TripleH

It depends, if you move around a lot with work then renting can make more sense.

Ownership will mean you have 'no rent' to pay once your mortgage is paid off (reduced by having maintenance costs). My parents were mortgage free by 45.

If you stay static owning does have more longer term security than renting (where you can be moved on at the whim of someone else as it currently stands) if private renting.

The dream to retire abroad depends on external factors you can't preempt. Visa requirements could change for a country, political instability is another factor, although the closer to retirement you are the less impact these factors have.

babyblade41

I won't prove you right or wrong, you do you and what suits .

I have always invested in bricks & mortar since I was 18  ..Rented a couple of times when I'd rented out my own house  due to work purposes and hated it .

Having to put up with someone else decor drove me nuts .

The best part is shutting the door on my home and it's all mine 

Thrugelmir

Your personal choice not to buy. Security of tenure is by far the greatest advantage that renting can never match. 

JGB1955

I wouldn't want to be having to pay rent on my £400K mortgage-free house in retirement.  We paid the mortgage off 20 years ago, in our early 40s.  Current rent would be £18K p.a.  That would be half our current net income.  No thanks!

MalMonroe

I've lived in other countries (hot ones) before and now I'm back in the UK.  What I've learned is that life's pretty much the same wherever you live, you have to work for whatever you want. The grass isn't greener over there, wherever you want to go. I've seen the grass and sometimes it's brown. In hot countries you get endless sun but I found that it was boring, every day nothing but sun, sun, sun. It's also frustrating when you have to work full time because you can't take advantage of the sun. And if you take too much advantage - skin cancer.

Also the insects (many, many insects) and other dangerous creatures plus the extreme weather - tornadoes, hurricanes, electric storms - not too keen. 

I was glad to get back home, see my family and now I appreciate where I live. 

I'm in rented accommodation and it suits me for now but I have plans to own my own property again, as I have in the past. 

You said, "Possibility to retire in a more appropriate place for pensioners" - where's that then? I'm a pensioner and I don't think that there IS an appropriate place for me. We modern pensioners are breaking the moulds. We're living longer and we are staying fit for longer too. I'm not ready for that quiet, boring old residence yet. And don't think I ever will be.

We all have different ideas of what is an ideal life and I've used some of mine to explore the world and find out what exactly it's all about (still don't know). I've had fun learning many things and meeting many people, some of whom are now very good friends. I know not everyone wants to do that but it doesn't matter, we're all different.

Really what I'm trying to say is that there's no ideal and there are no instructions in life. You have your ideas, others have theirs. They won't be the same and they shouldn't be either.

As JuzaMum says, above, we don't need to prove you wrong. Sounds very much to me like you're trying to prove yourself right. 

theartfullodger

With the cost of leaving crisis, were I younger I'd seriously think of moving elsewhere, probably EU.

A tragedy, this bunch of weak yes-men & women in power.

Best wishes to all..

Exodi

I don't think many people can be bothered to argue this, especially as your post is so obviously biased towards renting... I have a little time so I'll play the game (though I have a serious belief you are trolling).

I've read your post a couple of times now, and while I can see (laughable) cost comparisons and assumption but you don't seem to mention the fact you'd actually own a house if you bought? You're working out how much it would cost, without acknowledging that at the end of 30 years renting you'd own nothing, whereas after 30 years of a mortgage you'd own a house...with 30 years of house prices increases.

Actually, I'm not sure I can be bothered to respond to the rest of your post reading your other points about inflation and insurance, completely devoid of logic.

Rent for the rest of your life if you believe that is the right thing to do, I'm sure your landlord is grateful to you for paying his mortgage.

SavingPennies_2

I think some people have got confused with the subject and not read the whole post (as I nearly did), this is not about buying abroad instead of buying in the UK:

My obsession with [renting in the UK and] not buying in UK  - Prove me wrong