My obsession with not buying in UK - Prove me wrong

RobHT

Schwarzwald said:

RobHT said:

Schwarzwald said:

RobHT said:

[...]
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).

[...]

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.

you also dont seem to actually have much knowledge about the things you write.

Tenants' rights are fundamentally different in, for example, Germany compared to the UK and one reasons, besides others, including historical reasons, that home ownership is so low in Germany and renting so prevalent.

In Germany you have such strong tenant protection that you can safely rent for decades and stay in the same property with very limited rights for the landlord to get you out, which takes away a key incentive to actually buy real estate.

[...]
Then, in Germany the house prices is much lower, I'd be tempted to buy there no matter what, and they are properly built.

Btw, the quality of life is immensively higher in Germany .

sorry dude, but that is all not true. there are economic reasons WHY house prices are lower in Germany on an absolute level. But the picture is very different when you look at % rental yields. And different when you compare cities, Berlin, Munich, Dusseldorf, Frankfurt, Dresden, Dortmund - real estate prices across these cities are wildly different.

But sure if you simply compare Berlin and London real estate prices yes you can draw simple conclusions. For simple minds. That's a simple thing to do. Just incorrect. But sure do it.

Mate, I don't care about rental yelds , I'm not investing in renting out an house .
I exactly meant the absolute overview.
In general, the life cost is also much cheaper, something that British people can't believe it, but it is.
Let's don't start talking about the better society, better tax system, not meant for the business, but meant as a social system............

RobHT

Getting_greyer said:

Is it fair to say that you're a high earner with a large amount of your earnings being invested? And your employment means you will be based in big cities, and potentially moving between cities overseas?  

I'm ignoring "reconstruction" and insurances here but in that scenario being a renter makes sense to me purely for the lifestyle.  I think it's different for those that rent but can't save more because they stuck in a cycle of paid,rent,paid,rent. Whereas for you it seems, paid, rent, invest, paid,rent, invest. After enough cycles you can decide to either buy own home outright or let investments pay your rent instead of your labour.

Still think you had some right dodgy numbers in first post though.

Yes, you got the point, I mentioned the same in a previous comment.
In the worst case, I can always think to buy later if I need to, for example, at the next real estate market crash.

RobHT

theoretica said:

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.

Thanks for the answer.
You need a stable job to pay a mortgage, very stable .

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.

I know that way to think, I was thinking the same, until I didn't program my mind to think that the house is only like any other asset, I don't care anymore, I use it, I change it, I forget it.
Gossip ON: if I think about it, still makes me angry , I just can't think to it or I'll fall down into that trap again  

MobileSaver said:

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?

Selling doesn't happen overnight, I hope you realise that, if you finish your cash by then you are done.

I live north east of London, 2 beds house.

RobHT

Exodi said:

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.

After 30y, you'd like some reconstruction , 70k is probably reductive.

Spot ON on the remortgage, but only if you could release part of the equity, like to serve a personal loan.
I didn't verify if this is possible, but I'll research this case.
This could be a game changer.
I'd still never buy at these prices .

RobHT

Gycraig said:

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 

I considered the inflation, precisely from 600k (50y) rent up to 1M of rent!

CGT could have been my mistake, it's fine, I'm not ashamed to make mistakes, but I'll double check that , the nazi gov wants always some tax, I'm pretty sure it's not that easy as you say without any CGT.
In fact, I don't qualify: https://www.gov.uk/tax-sell-home 

You do not pay Capital Gains Tax when you sell (or ‘dispose of’) your home if all of the following apply:

• you have not used a part of your home exclusively for business purposes (using a room as a temporary or occasional office does not count as exclusive business use)

Of course my job will change many times, but I guess that I'll work from home 90% of my time.
I definitely worked from home since 3y, just as an example...

It seems that you live in an area where the cost of an house is less than the half of where i live.
Plus, I guess that you have a much more stable job than mine, also due to the location.
In my case, I'll hardly maintain 5y of permanence in a job, that's just my max and only if I want to sit down and warm up the chair, until I don't get fired.

RobHT

Sistergold said:

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.

You rented from a landlord that was a ....head.
I rent from agency, no issues as such.

6 months in advance? Aahahhah, no way, typical idiot landlord.
Not even the agency asked my savings, they measure the affordability through the salary and that's it. I gave my bank account statement as a proof of address where I has 20 pounds, that's all they got about my money ahhaha.

Thrugelmir

RobHT said:

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. 

In Germany, more than 50% rent 

If you knew your history then you'd know that 90% of Germany's housing stock was destroyed in WW2. People were left with literally nothing. Affordable rental accomodation was a consequence written into statue. 

RobHT

seradane said:

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?

You are right in all you said.
Just one more thing, my flexibility is also freedom, I've seen quite a few places where I live turning out in a drug selling point, tons of people coming in that should have never been there. (living and not living there)
Flexibility and freedom allow you to resolve such issues instantly, just wait the time of the notice and you are out from such neighborhood.
These issues are serious and quite frequent, the simple reason is that everything here is meant for business, there is no damn law, as long as someone makes money, it's all good.

Schwarzwald

RobHT said:

Schwarzwald said:

RobHT said:

Schwarzwald said:

RobHT said:

[...]
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).

[...]

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.

you also dont seem to actually have much knowledge about the things you write.

Tenants' rights are fundamentally different in, for example, Germany compared to the UK and one reasons, besides others, including historical reasons, that home ownership is so low in Germany and renting so prevalent.

In Germany you have such strong tenant protection that you can safely rent for decades and stay in the same property with very limited rights for the landlord to get you out, which takes away a key incentive to actually buy real estate.

[...]
Then, in Germany the house prices is much lower, I'd be tempted to buy there no matter what, and they are properly built.

Btw, the quality of life is immensively higher in Germany .

sorry dude, but that is all not true. there are economic reasons WHY house prices are lower in Germany on an absolute level. But the picture is very different when you look at % rental yields. And different when you compare cities, Berlin, Munich, Dusseldorf, Frankfurt, Dresden, Dortmund - real estate prices across these cities are wildly different.

But sure if you simply compare Berlin and London real estate prices yes you can draw simple conclusions. For simple minds. That's a simple thing to do. Just incorrect. But sure do it.

Mate, I don't care about rental yelds , I'm not investing in renting out an house .
I exactly meant the absolute overview.
In general, the life cost is also much cheaper, something that British people can't believe it, but it is.
Let's don't start talking about the better society, better tax system, not meant for the business, but meant as a social system............

you truly have no clue about how all these things are inter-linked. I agree you should not buy a property, primary reason for this recommendation: low financial literacy.

Schwarzwald

RobHT said:
[...]

In the worst case, I can always think to buy later if I need to, for example, at the next real estate market crash.

That's also non-sense.

As example, index price levels today at 100. If market goes up to peak at 150, the crash at 115 before recovering again, you will not be better off buying at the future through of the crash, unless your alternative utilization of capital yields far more than 15% between now and through at 115 (your levered return is >15% when asset prices increase by 15%).

A good strategy in such scenario would be to buy now at 100, release equity by re-mortgaging at 150, buy a second property at 115. But yes sure, you wait until the market crashes at a theoretical point in the future, then you are not ready to act and miss the boat again ... nice try.