My obsession with not buying in UK - Prove me wrong

theoretica

RobHT said:

TheJP said:

RobHT said:

Schwarzwald said:

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.

Hi, I liked your answer.
I explain better, I invest 3k almost each month.
Technically speaking, what I did in the last few years only will pay off my retirement, even if I exclude the pension pot...
Obviously, I would love to have my own house, customize it etc, and even see it as a great asset, but to me, an house in UK looks only a liability.

There is a chance though, I take the mortgage and I rely entirely on my mortgage insurance, which btw it doesn't cover my entire paranoia about asset security .
Then, the day I'll lose my job and don't get another one that pays well too, I'd like to understand how do I pay my mortgage...
I think that I'll be always above 60k, which is enough for a mortgage, but not enough to stay quite and to offset any house issue later on... Plus it won't give me anymore the chance to invest properly and consistently.

I get it, I make this reasoning because now I'm full of cash every month (even though it's about coins in reality, I'd need much more), but it won't be always like that...
Normally, the people with low income tend to buy an house because they believe they have secured the asset from the day one, then explain me why many people declare bankrupcy and lose the house... All the people that declare bankrupcy own something in real estate, coincidence? I don't think so. It's simple, they own the debt not the house, when they declare bankrupcy, they lose all.

What do I lose instead? Just the rent, my credit history doesn't get destroyed and I can always stand up, my insurances are gonna cover up as well.
Surely it can go bad also for me in some weird situation, but again, I don't own any debt, this is the greatest safety of all time.
Imagine a person like a company, that owns such level of debt in %, would it be even allowed to get a talk with a fund manager or a venture capitalist to get funds?
Not at all , I've seen rare cases as such, and most of them were funded by the governments or affiliated.

What does your crystal ball say?

Do you honestly think it this circumstance you'd be better off in a rental?

If you lose your job, you have the equity to either pay for a long term rental or buy a smaller house and afford the monthly payments. What will the eviction from a rental give you? A S21 and a good reference isn't going to pay the bills.

Clearly you are anti-house buying, so go rent and see what that life brings you.

If I lose the job for a long time (much more than 12 months), I'm done, that's obvious in both cases, my insurances cover for 12 months, unless the critical illness which pays a ridiculous amount of 150k as a lump sum.
I think that the main point is how much money I will spend to have a roof over my head during my entire lifetime, rather than how better or possibly convenient it is to rent or buy.

I can tell you the worst scenario, I lose the job for a long time, I notice that things will go asf for real, so I rent a room, problem solved, I can't neither pay that, than I'm done.
Thing is, when I have a mortgage to pay, no excuse, you gotta pay or you lose all, plus I'll enter in the bad game of people that went default, my financial history forever destroyed.
Certainly, my mortgage insurance could pay out, but how much sure I am? What does it cover exactly? It depends...
Then what if I can't work for some reason, what do I do with 4 walls and no money to pay the bills and council tax, as well as food and the rest?
That's why I say that I depend from the job anyway, I'm not concerned about rent or buy, not even the cost of them, it's a completely different way to see the situation.
I've done a breakdown only to clear my mind and to show you guys that it doesn't look that convenient, even just looking at the money.

One thing I value with ownership was the ability to front load the cost - to overpay my mortgage while I could afford it.  Which made the amount of time I had mortgage payments hanging over me as a monthly liability much shorter - I agree with you that it was not pleasant having that commitment to spend money I had not yet earned.  But getting rid of it rapidly - and not having bought the maximum possible property I could possibly get - gives the benefit of a very cheap place to live and much less uncertainty about what would happen if I lost my job.

Sistergold

For someone with children all these options of moving into a room are not there. With children some landlords who have 4 bed properties seem to still have problems letting rent. When you have pets aswell as children then rental gets even more difficult. Landlords are very funny in the attitudes. So basically some people don’t mind renting but attitudes force them to buy just to be able to live the way they want despite all the expenses. 

You can be inclined to think rental is a solution as you commented about moving into a room being an option as you are on your own and don’t have or plan to have children. Family complicates how one can live. 

When I was in rental I would be onto the children don’t do this don’t do that this is a rental property the landlord will do this or that if you do A or B. The landlord will come for inspections.  If something needs replacing the cheapest version is bought! In the end enough was enough. The inflated house price was a small price to pay in the grand scheme of things to be honest! Now if the children damage something “I will reconstruct the house” like you said. 

Very interesting how you kept on about reconstructing.

MobileSaver

RobHT said:

I can tell you the worst scenario, I lose the job for a long time ... so I rent a room, problem solved
Thing is, when I have a mortgage to pay, no excuse, you gotta pay or you lose all

How do you work that out? If you lose your job you can sell the mortgaged house and also just rent a room instead. In fact, with most new tenancies now being for 12 months minimum, for many people it would be quicker to sell their house than to terminate an existing tenancy.

Which part of the UK do you live in? What exactly are you getting for your £1k a month rent? Is it a house or a flat and how many bedrooms?

lookstraightahead

Sistergold said:

For someone with children all these options of moving into a room are not there. With children some landlords who have 4 bed properties seem to still have problems letting rent. When you have pets aswell as children then rental gets even more difficult. Landlords are very funny in the attitudes. So basically some people don’t mind renting but attitudes force them to buy just to be able to live the way they want despite all the expenses. 

You can be inclined to think rental is a solution as you commented about moving into a room being an option as you are on your own and don’t have or plan to have children. Family complicates how one can live. 

When I was in rental I would be onto the children don’t do this don’t do that this is a rental property the landlord will do this or that if you do A or B. The landlord will come for inspections.  If something needs replacing the cheapest version is bought! In the end enough was enough. The inflated house price was a small price to pay in the grand scheme of things to be honest! Now if the children damage something “I will reconstruct the house” like you said. 

Very interesting how you kept on about reconstructing.

Wow your experience of renting was very different from mine. I made some amazing friends in the village where I rented (with kids) who owned their houses. I've moved areas now and I "own" with a small mortgage left (you never truly own til you have the deeds, and I cringe at the level of mortgage some folk have round here with no safety net for life circumstance changes).

why were you so scared of a landlord? Tenants have a lot of protection now.

Exodi

I am really suprised there's 8 pages of people bothering to engage with the OP.

Please, OP, have a cold shower, drink a strong coffee and read this -

1. Maintenance/'Reconstruction' - Virtually no-one is spending 70k on upkeep and reconstruction (whatever that means). It's annoying that you keep whipping these numbers out of thin air to try to support your ridiculous points. 'Reconstruction' (again, whatever that means), is also not a 'requirement' to sell a house. Many people sell houses with no or very little improvements though often gain a significant amount in house price increases.

2. Inflation - It is frankly laughabel that you keep suggesting that this effects mortgages more than rent? Borrowers are able to fix their mortgage payments for sometimes very long periods of time (5 or 10 years), yet there is no way to do this with rent. Landlords are very unlikely to let their property below the market rate, I'd say rent prices respond very quickly to inflation. Your assumption that rent remains the same for 30 years... no comment.

3. Bankcruptcy - Your comments here are why I think you're trolling. Your stance of 'if I go bankcrupt, they'll take my equity and I'll own nothing so it's just better to just own nothing all the time'... can you see how utterly ridiculous this is? I believe around 0.1% - 0.2% of people declare bankcruptcy in England, I don't even know why it is being discussed.

4. Insurances - Excluding buildings insurance, I don't really see how insurance is of any relevance... if you were critically ill/permenantly disabled, you wouldn't be able to pay your rent either? At least if you were critically ill/permenantly disabled while mortgaging, you'd have some equity to soften the blow.

5. Remortgage - Do you know what a remortgage is? It's usually either done to a) bring your mortgage onto a better deal - saving you money b) release equity from the property, allowing you to spend it on whatever you want. You gloss over remortgaging without paying respect to what you gain from doing so - and liken it as a negative that balances have no real security as a renter?

And the points that seem to keep being (deliberately) missed:

1. Equity - You'd own a house at the end of a mortgage? House prices seem to have only ever gone one way long term. You don't have to live in it. There are a lot of people that regret not buying 20 years ago (you even mention that you'd buy if prices were what they were a few years ago) - I'm not sure there's many that regret not renting 20 years ago, sat on hundreds of thousands of pounds of equity?

2. Retirement - Needing to pay rent in retirement is a scary prospect. I'd rather spend the tens of thousands on cruises every year - but giving it to a landlord is also an option.

I'm annoyed at myself for taking the time to reply, but hopefully in the very small off-chance you're not trolling, it may sink in.

For me, Nationwide last valued my house at £355k, which is a £65k increase in the last 5 years. My mortgage payment is significantly less than rent is for the local area.

Gycraig

What an absolute nonsense post, you used 30 years as a marking point. 

My dad paid 24k for his property in 1990 the year I was born the property is now worth 90-100k  He would have been mortgage free 5 years ago. 

Rent on that property will now be around 400 a month. So 5 years of rent payments now would have bought the house outright 30 years ago.

I paid 138k for my new build house 3 years ago with a 10 percent deposit, it’s now worth 160k I have got from 10 percent equity to 25 percent equity in 3 years, if I sold it today I’d get 47k back, on top of that I pay 450 a month for my mortgage my neighbours rent is 650. 

For me home ownership has been cheaper monthly than renting and also gained me a good chunk of equity.

I don’t understand how you can try to just “skip” the inflation part, if your rent is 1k today it certainly won’t be in 20 years my mortgage could easily be 450 in 20 years. 

If you want to rent instead of own great, but you embarrass yourself when you make posts like these. The nonsense about capital gains tax on a house you own coupled with “the bank take most of your equity” was comedy gold 

Elliott.T123

The debate has to be about more than just financials, although if you are going on just a financial basis over a 50 year period as you did buying will come out better than renting virtually every time (there are those 0.1% who go bankrupt or some almost impossible to imagine set of circumstances that lead to buying being worse).

The debate has to take into account personal circumstances, do you want flexibility to move around for work or other reasons, where are you in your life, are you enjoying being free and not tied to an area or do you have a family and are fairly set to a particular area?

For me personally I have no interest in ever leaving the area, I was born here, moved to the opposite end of the country for Uni and returned to this area, bought my own place 9 years ago then upsized with my wife a year ago. I have family locally, friends I have known for 20+ years 5-10 minutes away and multiple other ties to the area. I couldn't imagine choosing to rent rather than buy in this situation, I want the stability, I want the guarantee I am in control, I want the financial security long term of knowing I can pay off a mortgage and own an increasing asset (even if there is a HPC as some people think there will be we can all agree over 50 years prices will go up). If when I retire I want to move to the coast, so be it, I will sell my home that I will own outright by then, downsize to a nice little cottage by the sea and have a chunk of cash to have a few holidays with. 

Sistergold

lookstraightahead said:

Sistergold said:

For someone with children all these options of moving into a room are not there. With children some landlords who have 4 bed properties seem to still have problems letting rent. When you have pets aswell as children then rental gets even more difficult. Landlords are very funny in the attitudes. So basically some people don’t mind renting but attitudes force them to buy just to be able to live the way they want despite all the expenses. 

You can be inclined to think rental is a solution as you commented about moving into a room being an option as you are on your own and don’t have or plan to have children. Family complicates how one can live. 

When I was in rental I would be onto the children don’t do this don’t do that this is a rental property the landlord will do this or that if you do A or B. The landlord will come for inspections.  If something needs replacing the cheapest version is bought! In the end enough was enough. The inflated house price was a small price to pay in the grand scheme of things to be honest! Now if the children damage something “I will reconstruct the house” like you said. 

Very interesting how you kept on about reconstructing.

Wow your experience of renting was very different from mine. I made some amazing friends in the village where I rented (with kids) who owned their houses. I've moved areas now and I "own" with a small mortgage left (you never truly own til you have the deeds, and I cringe at the level of mortgage some folk have round here with no safety net for life circumstance changes).

why were you so scared of a landlord? Tenants have a lot of protection now.

I was not scared of the landlord, but the landlord I was ever present in a sense. I never felt at home. Average wear and tear not allowed so found myself having to be extra careful with children and even then he almost wanted all my deposit. Only got my deposit as I threatened to sue. 

Asked if he could send his handy man at my expense to add a few “points/places/screws ” for pictures wall clock etc, I was told that “he wants all walls to stay clear”. Had an aunty who I would ask to come to look after the children from time to time and he sent me an email that “he understands someone comes to my flat from time to time can he get their identity and details so that he can add them to the tenancy? Had to reply that she comes for child care purposes and can not be added to my tenancy agreement as she has a place of her own. 🤷‍♀️All this has nothing to do with making friends or not but the actual living in the house. 

Had to be paying 6 months in advance and he wanted to then also see my savings despite being in employment, refused to show savings if I was also being asked to pay 6 months in advance. I had savings but did not see the point as rent already secured for 6 months. To secure had endless questions to answer in the end I had to say I can look elsewhere as I don’t have all year to secure that particular accommodation. He then let me rent the place. This is just one experience, many other annoying but every time I have rented. 

You are right the mortgage debt can be a lot but I personally can not cope with renting if I can avoid it. 

Before that I was in a flat for one year and they put it on the market and were doing viewings while I was still living there. 

Too many possible changes in rental not really bothered if I never fully own it in the end but just want to determine how stay in the place. That’s my excuse for the large debt.

seradane

Exodi said:

1. Maintenance/'Reconstruction' - Virtually no-one is spending 70k on upkeep and reconstruction (whatever that means). It's annoying that you keep whipping these numbers out of thin air to try to support your ridiculous points. 'Reconstruction' (again, whatever that means), is also not a 'requirement' to sell a house. Many people sell houses with no or very little improvements though often gain a significant amount in house price increases.

I think the word he means to use is Refurbishment.... but your point still absolutely stands

seradane

RobHT said:

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.

Okay so in your very first post, you worked out that renting, over a lifetime, would work out twice as expensive as owning. Ignoring equity, which is a big deal as well but nevermind...

You go on to say you prefer renting for other reasons, which is fine, but ultimately you've only proved that you personally value the flexibility of renting twice as much as you value the security of owning.

That's fair enough if that's your preference but for anyone who doesn't value flexibility that much... surely by your own calculations it's a no brainer to buy?