My obsession with not buying in UK - Prove me wrong

MobileSaver

RobHT said:

The landlord loves me, I always pay in time,

Of course your landlord loves you, every month you're paying his mortgage for him! LOL

onylon

RobHT said:

onylon said:

RobHT said:

Probably you don't get it well.
If you lose your job, you lose your house too.

Or you get another job, invest the redundancy money and come out considerably better off. It's not always doom and gloom.

The redundancy package in UK is ridiculous, it's just about your last salary (which is due anyway), plus one week worth of salary capped at 500 pounds, which means 5y of work = 2500 pounds...

Reading the website right now, it slightly changed:
If you were made redundant on or after 6 April 2021, your weekly pay is capped at £544 and the maximum statutory redundancy pay you can get is £16,320. If you were made redundant before 6 April 2021, these amounts will be lower.

Source: https://www.gov.uk/redundancy-your-rights/redundancy-pay 

These are coins in the London zone and surroundings, up to Birmingham just as an example...

Forget about redundancy mate.

You haven't factored in the contractual notice period which would typically be paid off as part of the redundancy package. For a mid level IT role that would be 3 months pay tax-free + the statutory payment, before any negotiation. It can be considerably more, especially since many companies mess up the redundancy process and end up in a poor bargaining position as a result. For sure job loss can be very stressful, but it's often a significant net-gain rather than the disaster you are worried about.

Are you in a particularly precarious position? Can you mitigate the risk by up-skilling or getting more qualifications?

Sistergold

RobHT said:

Sistergold said:

Just as a by the way real life example. In the last recession(Northern Rock 2008) straightaway my husband lost his job. Luckily our mortgage was such that you could withdraw with the click of the button any money paid towards capital. So if the original loan was £230k and balance was now £190k you could withdraw up to £40k to bring it back to original loan of £230k. Anyway as I was only one working from time to time if I was short of money to pay mortgage for instance I would withdraw necessary amounts of money from the mortgage to pay the mortgage or buy food or meet other direct debit. It was a tough 4yrs for us as a family(4 children) as was on one income. Not once did I need to talk to the bank about my mortgage and no we did not lose the house and no I did not need to miss payments despite not enough income. I could withdraw modest amounts to pay bills when I got desperate. 

There are so many different mortgage products to suit different people but I am not sure what products or arrangements there are in rental? 

Most homeowners and renters are sensible adults who know that you need to pay to stay. This again is not to say there will be no repossessions or evictions. Also repossession and evictions have been happening even without recession. Hard times do just hit sometimes I guess with what’s going on now hard times will be widespread. 

Interesting, but what you mentioned is unknown to me.
Certainly there are many mortgage products, but you know, I'm not lawyer or a professional real estate lawyer that can check all these things, plus in my country for example this would be seen as a attempt to trick the bank, with bad consequences because the bank still owns the house and you can't trick them .

In any case, no bank or financial institution in UK told me such thing before, so yours is one of a kind...
Thanks for the tip though, I'll try to find such mortgage, I'm pretty sure is much more expensive or it has some other weird downside.

I was never under the illusion that I was tricking them. Whenever I made withdrawals from the mortgage my repayment went up as it had to recalculate so that I can pay up the mortgage at the end of the agreed term. When times were good I also overpayed on the mortgage. A mortgage truly gives me financial freedom as I can reduce or increase my roof of my head payments as finances permit by increasing term, reducing term, overpaying, payment holidays, withdraw equity etc. all within reason and common sense. 

BUT! You are probably right and have it all worked out. 

Once you have the winning formula stick with it! 👋🏾

Sistergold

MobileSaver said:

RobHT said:

The landlord loves me, I always pay in time,

Of course your landlord loves you, every month you're paying his mortgage for him! LOL

Yes the ideal tenant! 

Elliott.T123

RobHT said:

Elliott.T123 said:

I think we can all agree from a financial position only buying beats renting over a long period of time for 99% of people.
Yes there are situations where it doesn't and if you are a very conservative individual who is scared of any form of risk then buying a house is not for you.

From this thread I think we can make a fair assumption that RobHT is very risk averse, he has mentioned he has a fairly high income and high level of savings but is still worried about the risk of losing his house if he were to buy it. This leads me to assume either he is in a career that has a very high turn over rate, is unwilling to take on lower paid work if he were to lose his job or is risk averse.

So rather than trying to convince him that his obsession with not buying is incorrect I think we should be saying that in 99% of situations people should buy (if only looking at it financially) but in his particular situation no he should not buy as emotionally it is the wrong choice for him personally.

You got an important point, high pay jobs have high turnover.

I explained above what you would lose if you need to sell for emergency, all your customizations and improvements would be gone.
If you had to sell in the first few years, you are done, it's the majority of your equity.

Being a recruitment consultant with 15+ years focusing on jobs paying £80-200k (I do the occasional role paying above that, my record was a base salary of £956,000 with bonuses taking the role over £2M) I can assure you not all high paying jobs have a high turn over at all. I very rarely work with a candidate who has a career gap on their CV of more than 1-2 months maximum and as a generalisation most people I work with have been in their current roles for at least 4-5 years. Of course there are the occasional individual who has been out of work longer but that is the exception to the rule.

I do agree with you, some people in some situations will lose out but there are so many ifs and buts on that...

1. It will only happen IF they have stretched themselves on affordability, if they bought a house at the low end of their budget they have lots of flexibility
2. It will only happen IF they are out of work for an extended period of time, it is also a fair assumption to make that anyone capable of getting a "high paid job" is capable of finding a new one in a reasonable timeframe even if they need to take a bit of a pay cut
3. It will only happen IF they refuse to get a lower paid job
4. It will only happen IF they have only recently bought the house and have minimal equity in it
5. It will only happen IF house prices in the area have either fallen or only risen a small amount

Also I agree divorce is a factor that needs to be considered and can change circumstances significantly very fast but as this thread is about you and you have said your single I wont go down that rabbit hole today.

I am sure there are plenty of other ifs and buts I could find but I think you have to take a step back and say to yourself, do I believe that all of these things are going to happen to me? if you think the answer is no then financially you will be better off buying.

lookstraightahead

I really don't understand this paying the landlord's mortgage issue. When I first rented out my flat (years ago) all of the income went on interest as rates were high, and when I sold the flat I made a loss.
im not saying that's the situation now as rates are low and house prices have gone up, but being a landlord is a job so effectively you're paying for a service.
a good landlord spends hours a week on a property which could be spent on other work. 

There are millions of people in jobs where they are effectively making lots of money for their employer and just taking a small cut of it.

do we not all furnish the pockets of others for our lifestyle? It just depends what we want to spend it on.

Elliott.T123

lookstraightahead said:

I really don't understand this paying the landlord's mortgage issue. When I first rented out my flat (years ago) all of the income went on interest as rates were high, and when I sold the flat I made a loss.
im not saying that's the situation now as rates are low and house prices have gone up, but being a landlord is a job so effectively you're paying for a service.
a good landlord spends hours a week on a property which could be spent on other work. 

There are millions of people in jobs where they are effectively making lots of money for their employer and just taking a small cut of it.

do we not all furnish the pockets of others for our lifestyle? It just depends what we want to spend it on.

Fully agree on this, although I don't think (at least from my perspective) people are using that phrase as an argument against landlords, its not a complaint that they don't deserve the money (in most situations, although there are definitely some who don't!). There are some brilliant landlords out there who look after their tenants very well and totally deserve the money they receive. I think the point people are making is more focused on the tenant, that the rent they are paying covers their landlords mortgage and is an expense to the tenant that comes with no financial gain, if however they paid that money onto their own mortgage it would give them equity in a property that over a period of time will be an appreciating asset and that expense would give a gain in the future.

RobHT

onylon said:

RobHT said:

onylon said:

RobHT said:

Probably you don't get it well.
If you lose your job, you lose your house too.

Or you get another job, invest the redundancy money and come out considerably better off. It's not always doom and gloom.

The redundancy package in UK is ridiculous, it's just about your last salary (which is due anyway), plus one week worth of salary capped at 500 pounds, which means 5y of work = 2500 pounds...

Reading the website right now, it slightly changed:
If you were made redundant on or after 6 April 2021, your weekly pay is capped at £544 and the maximum statutory redundancy pay you can get is £16,320. If you were made redundant before 6 April 2021, these amounts will be lower.

Source: https://www.gov.uk/redundancy-your-rights/redundancy-pay 

These are coins in the London zone and surroundings, up to Birmingham just as an example...

Forget about redundancy mate.

You haven't factored in the contractual notice period which would typically be paid off as part of the redundancy package. For a mid level IT role that would be 3 months pay tax-free + the statutory payment, before any negotiation. It can be considerably more, especially since many companies mess up the redundancy process and end up in a poor bargaining position as a result. For sure job loss can be very stressful, but it's often a significant net-gain rather than the disaster you are worried about.

Are you in a particularly precarious position? Can you mitigate the risk by up-skilling or getting more qualifications?

Thanks, interesting answer.

My notice is one month, but I'm in this company since more than 2y, I don't see anywhere listed as 3 months in case of redundancy... Is this from the law or it should be in my contract?
In any case, my insurance would help a lot, I'm just saying that I don't see how the redundancy payment will support me...

I'm quite skilled, that's not a problem, reason why at a certain level is not that easy to find the next-gen opportunity , due to scarcity or level of competition.

RobHT

MobileSaver said:

RobHT said:

The landlord loves me, I always pay in time,

Of course your landlord loves you, every month you're paying his mortgage for him! LOL

.......
In 2y I'm here:
1. The owner had to fully replace the washing machine (500+ pounds)

2. Fully rebuild part of the things "consumed" by the previous guys, for example brand new carpets, print here and there and so on, probably 2k-5k, it's difficult to estimate, but this happened before I joined.

3. The garage door doesn't have much life time left, just another thing.

4. I also called the agency for a check to the kitchen, the call was paid by the owner but I basically need to live with the little problem that it has, not the end of the world.

5. The kitchen fan is quite noisy, I wouldn't be surprised to see it broken soon.

6. The owner paid also the repair of a water leak from the roof, that was expensive, it required many calls, probably 500 pounds...

7. The owner paid every year the boiler checks, I'm not sure how much it costs, but just saying.

8. Soon they water sink handler should be replaced in the kitchen, again, low quality stuff that need to be replaced.

9. I had a water pressure issue, the agency fixed it, I could have done by myself but the system was not clear at all here, so it required a call and some additional check up from a plumber. I could probably say that it was worth 100 pounds.

10. The boiler had very low pressure recently, I was quite scared, so I called the agency, easy fix and no problem detected, let's say 100 pounds.

All the above was handled by the agency in a matter of a few days.

Emmia

RobHT said:

MobileSaver said:

RobHT said:

The landlord loves me, I always pay in time,

Of course your landlord loves you, every month you're paying his mortgage for him! LOL

.......
In 2y I'm here:
1. The owner had to fully replace the washing machine (500+ pounds)

2. Fully rebuild part of the things "consumed" by the previous guys, for example brand new carpets, print here and there and so on, probably 2k-5k, it's difficult to estimate, but this happened before I joined.

3. The garage door doesn't have much life time left, just another thing.

4. I also called the agency for a check to the kitchen, the call was paid by the owner but I basically need to live with the little problem that it has, not the end of the world.

5. The kitchen fan is quite noisy, I wouldn't be surprised to see it broken soon.

6. The owner paid also the repair of a water leak from the roof, that was expensive, it required many calls, probably 500 pounds...

7. The owner paid every year the boiler checks, I'm not sure how much it costs, but just saying.

8. Soon they water sink handler should be replaced in the kitchen, again, low quality stuff that need to be replaced.

9. I had a water pressure issue, the agency fixed it, I could have done by myself but the system was not clear at all here, so it required a call and some additional check up from a plumber. I could probably say that it was worth 100 pounds.

10. The boiler had very low pressure recently, I was quite scared, so I called the agency, easy fix and no problem detected, let's say 100 pounds.

All the above was handled by the agency in a matter of a few days.

In the meantime, how much have you paid in rent in that period? How much has the property appreciated in value?

Honestly I think you're scraping the barrel a bit to find things to justify your position - if you're happier renting then just crack on with it.