My obsession with not buying in UK - Prove me wrong

Sistergold

Buying is not just about the money. It’s about deciding how long you stay in a particular location/property and the quality/freedoms of the place while you stay in it. I don’t think homeowners will regret even if the interest and expenses of house ownership equaled or exceeded the expenses of a similar rental. It’s not mainly about the money it’s about a roof over your head. You don’t take money into your grave but it’s good to live in the style that you want. Certain neighbourhoods don’t even have rental properties as landlords just don’t think they can get maximum returns. 

There is always a time to buy and a time to rent for many. 

MobileSaver

RobHT said:

plus it needs reconstruction before to be sold or you need to sell at a low price in the future... you need to reconstruct your house, mainly inside but also something outside, definitely the roof.

This is just utter nonsense; in over 30 years of home ownership I have never had to "reconstruct" a roof. My current home is 100 years old and apart from replacing a few roof tiles every now and again the roof is original and will be absolutely fine for many more years yet.

I lived in my previous home for around 15 years, never reconstructed the roof or replaced the boiler, did spend around £1,000 installing a downstairs toilet and sold it for around £200,000 more than I paid for it...

It seems to me you have already decided that over the long term renting is better than buying but your justifications as to why are getting more bizarre by the hour.

RobHT

steampowered said:

I would sympathise with your post if you lived in Europe - where it is very common for people to rent.

In most countries, renters have a good degree of security. You can't just be kicked out with two months' notice. You have the right to make reasonable amendments in your own home (e.g. putting up pictures). Most landlords are professional organisations, rather than total amateurs who try to spend the absolute minimum possible on upkeep. 

Unfortunately in the UK renters have very few rights. You can be kicked out on two months' notice. That might be OK for a single young person but it is not acceptable for a pensioner.

Home owners on the other hand have a lot of rights - it takes much longer for a bank to repossess a property than a landlord, plus there is support available for mortgage payments. 

Let's make something more precise, where in Europe?
Randomly speaking, I'll give you some data.
In Germany, more than 50% rent and only for career purposes and the high cost in big cities (look at the rent limit in Berlin, against the international free market rules).
In Italy you get 17 months extention if you don't pay the mortgage for whatever reason. Most people or families are home owners.
I could mention other countries but I may just diverge, basically our speech may not make sense until we don't compare apples with apples.

I don't see more rights in other countries for renters, it just depends from the common or custom contract the you make, that's it.

Yes, with my current contract I've got 2 months notice, but the owner would be just an idiot to kick me out, I always pay and the agency will request more money if he wants to swap the tenant, at the risk that the next one will not pay .
But ok, there is the risk that the owner wants the house back for himself.

It doesn't take long for a an house to get repossessed from the bank, I guess it's 3 months, unless kids involved and some other tools.
That's why mortgage insurances and income insurances are necessary anyway.

RobHT

TheJP said:

lookstraightahead said:

JGB1955 said:

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!

I got divorced in my thirties and my £400k house was an absolute noose around my neck. Luck of the draw sometimes. Nearly mortgage feee again now, but had I rented early in life instead of being focussed on paying a mortgage I would have been much better off.

would be really interested to know how much interest you paid (not saying you have to give figures) but I bet you went through some high interest times.

Did you sell your account to Crashy?

Renting has no return, its an infinite loop of paying a service, once you are mortgage free even after the interest you have an asset. Renting, you are paying that asset on somebody else's behalf. Yes interest to pay but you'll likely in the long term be better off buying. 

My mortgage payments are slightly lower than my rental, considering the maintenance costs its about the same, i now after 6 years have £100K equity, a renter has £0k equity.

The reasoning about the equity is good, but it's not standalone, you can't just think to that , that's why I mentioned tons of other things in my first post.
It must feel great to own 100k equity, but your mortgage is not cleared, your life is so long, you still depend from your job, probably is also a job that depends from the location, I don't want to destroy your moment, but this post is all about the rest of the things you didn't consider, for example:
- If you declare bankrupcy, you lose your equity, entirely...

- If wanna sell the house in the middle of the mortgage, the bank needs to approve it and it will take the majority of the net income from it, if any btw, I don't remember right now

- Did you consider CGT?

RobHT

Getting_greyer said:

Out of interest what do you mean by reconstruction. Is that decorating or like adding an extension. Is that in one or two major projects or over the lifetime of ownership?

Good question, I considered only one major reconstruction, which includes pipes, roof and maybe a quick scrap to the electrical system.
Well, probably 50k is not enough for all this, let's add 2x if you do it after 30y , that's way more real.

There are also other things to consider, it can be some door, some window, new security system (just travelling with my head ), I didn't put everything on paper.

RobHT

JGB1955 said:

lookstraightahead said:

JGB1955 said:

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!

would be really interested to know how much interest you paid (not saying you have to give figures) but I bet you went through some high interest times.

The most we ever paid was 5%, because we had a staff mortgage from a high street bank. To be fair, interest rates were 15%+ when we first bought...but loans were 2.5 x first salary plus 1 x mine. First mortgage around £11k.  Mortgage on our current house  around 30k and £120 per month back in1985.

I'm tempted to say that it was another world, but hold on a moment, it could be the same for our future.

Two things to consider, in my calculation I considered 2.5% average for interests, much different from your figures.
Now I understand why it was 15% interest, banks were sure to make money, houses were a need, people had job in the economic boom etc...
Today is the opposite

In any case, in 304y your house probably increased 10x the value, am I right?
But this is the issue I'm describing here, the house prices are currently out of any reasonable range, even the best/worst case scenario.

Thrugelmir said:

RobHT said:

Thrugelmir said:

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

What is for you security of tenure precisely?

An Englishman's home is his castle. A very old legal concept at it's origins. 

That kind of cool house in the London zone would cost me 500k (50 miles away), inside the Greater London around 950k, no jokes.
Tell me how the f... I can pay it, not even me that I take around 100k .

Slithery

RobHT said:
- If you declare bankrupcy, you lose your equity, entirely...

If you have equity then you don't need to declere yourself bankrupt.

RobHT said:-
If wanna sell the house in the middle of the mortgage, the bank needs to approve it and it will take the majority of the net income from it, if any btw

No, they don't.

RobHT said:-
Did you consider CGT?

Living in a property you own exempts you from all CGT liabilities when you sell it. The CGT will be £0.

Most of what you've posted in this thread so far simply isn't true

RobHT

MobileSaver said:

RobHT said:

plus it needs reconstruction before to be sold or you need to sell at a low price in the future... you need to reconstruct your house, mainly inside but also something outside, definitely the roof.

This is just utter nonsense; in over 30 years of home ownership I have never had to "reconstruct" a roof. My current home is 100 years old and apart from replacing a few roof tiles every now and again the roof is original and will be absolutely fine for many more years yet.

I lived in my previous home for around 15 years, never reconstructed the roof or replaced the boiler, did spend around £1,000 installing a downstairs toilet and sold it for around £200,000 more than I paid for it...

It seems to me you have already decided that over the long term renting is better than buying but your justifications as to why are getting more bizarre by the hour.

Your house was built in another era, do you get it, right?  

Keeping a boiler for 15y is ridiculous in UK, the majority of new boilers are made to last 5y (brands mainly seen in UK), max they last 10y if you are lucky or in any case the vendor suggests you to replace it.
Thing is, you bought it 15y ago, so maybe 15y ago UK was a better place, which I doubt, and I don't fancy UK anyway, all is meant to rip you off , cheap stuff everywhere, just some high quality engineering available at wide scale, which doesn't suck, but barely enough to satisfy the real demand.

15y ago a simple worker could have purchased an house, today not , don't forget it
Me with 100k salary, I don't feel is the right thing to do, neither the mortgage affordability test thinks the same, now try to imagine my face

If I look at the career bands in London though (at least I've seen them in a website about London), I'm barely at the first one, which underlines where the problem is here   .
Or do we want to talk about the shared ownership? It's available at people that take up to 75k if I recall well, basically the government is telling you that below that amount, you are ad the edge of the society.
Looking at the mortgage affordability, all sounds, but even if I forget that, it makes sense, you can't take a mortgage that suck up all your income, it's crystal clear.

Schwarzwald

RobHT said:

[...]

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.

[...]

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 would argue a prime source of freedom and flexibility in life comes through financial independence. Financial independence is also a source of life quality for many.
Financial independence comes through wealth.
Renting long-term remains an expense, it does not inherently create wealth. Wealth beyond purely selling your time away for a monthly salary comes from appreciative asset ownership.
Real estate is one of the most common and most widely understood forms of asset ownership as everybody needs to sleep somewhere.
Unless you very smartly invest your equity deposit, that you keep by not buying real estate, constantly into other assets, e.g. stock market, commodity trading, etc., how do you build any wealth that creates the financial freedom that you seem to seek to be able to "retire in other places", "move around as you wish", etc.
For sure not by holding cash in either a low interest environment of the last 10 years and not in a high inflation environment as we are likely to see in the next 2-5 years. Asset ownership often benefits from both and is often a good hedge.

With all due respect but your entire OP reads like non-sense to me and you dont seem to understand very basic fundamentals of building wealth long-term. Wealth comes through asset ownership, which is appreciating, you dont necessarily need real estate for it, but for many it is a/the starting point.

RobHT

Slithery said:

RobHT said:
- If you declare bankrupcy, you lose your equity, entirely...

If you have equity then you don't need to declere yourself bankrupt.

RobHT said:-
If wanna sell the house in the middle of the mortgage, the bank needs to approve it and it will take the majority of the net income from it, if any btw

No, they don't.

RobHT said:-
Did you consider CGT?

Living in a property you own exempts you from all CGT liabilities when you sell it. The CGT will be £0.

Most of what you've posted in this thread so far simply isn't true

Yes, because the contract with the bank is that you pay the mortgage, not that you push the bank to sell the asset, creating risks in turbolent times... They size your equity as far as I know, it's a collateral damage.
I'll double-check.

I don't agree with the CGT, but I'll double-check later even this...