Is Renting Really Dead Money?

edited 30 November -1 at 1:00AM in House Buying, Renting & Selling
87 replies 13.2K views
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  • Gorgeous_GeorgeGorgeous_George Forumite
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    This is an odd comment. I find in the current market I have a greater choice on places to rent than places to buy. Also (having experienced noisy neighbours) renting gives you the opportunity to just up sticks and leave. Selling can take months and years. It is a much greater risk when you buy and you don't know who your neighbours are (they can seem nice to start with), than when you rent.

    It is a good debate.

    Yes, what I was trying to say is that, on an estate where all or most houses are rented, you tend to find more problem families than on estates that are all private. I'm sure there are exceptions to this rule.

    :)

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • GorgeousGeorge - You were making a lot of sense, until you got to the bit where you didn't give the rental view...

    "The best thing about owning is that I choose where to live and I live next door to other owners. In rented accommodation, where next door is also rented, you never know who your next neighbours might be."

    Well that's true to a degree until the owner next door decides to let out there place or the owner next door sells it to neighbours from hell (you've no control over those). Also Mr and Mrs Nice Neighbour may turn out to be anything but nice.

    The best thing about renting is if you do end-up with neighbours you don't like, you give your notice (1-2 months) and find somewhere else. You don't have to worry about selling if you want to leave (how long will that take?) and you'll need to make sure you don't end-up in a dispute as that'll have to be declared.

    Two sides to every story :)
    "One thing that is different, and has changed here, is the self-absorption, not just greed. Everybody is in a hurry now and there is a 'the rules don't apply to me' sort of thing." - Bill Bryson
  • lynzpowerlynzpower Forumite
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    I love owning my own place but I sometimes envy those who rent.

    The best thing about owning is that I choose where to live and I live next door to other owners. In rented accommodation, where next door is also rented, you never know who your next neighbours might be.

    In short, renting is best if you rent near similar people to yourselves.

    :)

    GG

    Me & OH were discussing this very point last night.

    The thing is, you can buy somewhere & get to know the neighbours & think hmm they are nice,. they could sell to a grade 1 a55. Leaving involves possibly paying off a fixed mortgage & associated banking charges, ea fees. not to mention all the usual of bits of decorating that requires doing before selling. then removals.

    Renting- you can rent next dor to an A1 a55, but at most you have to stick it for a year till the end of the AST ( or 6 months if you are clever negotator)
    when you leave it costs you nothing aside from the van :)
    :beer: Well aint funny how its the little things in life that mean the most? Not where you live, the car you drive or the price tag on your clothes.
    Theres no dollar sign on piece of mind
    This Ive come to know...
    So if you agree have a drink with me, raise your glasses for a toast :beer:
  • lynzpowerlynzpower Forumite
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    GorgeousGeorge - You were making a lot of sense, until you got to the bit where you didn't give the rental view...

    "The best thing about owning is that I choose where to live and I live next door to other owners. In rented accommodation, where next door is also rented, you never know who your next neighbours might be."

    Well that's true to a degree until the owner next door decides to let out there place or the owner next door sells it to neighbours from hell (you've no control over those). Also Mr and Mrs Nice Neighbour may turn out to be anything but nice.

    The best thing about renting is if you do end-up with neighbours you don't like, you give your notice (1-2 months) and find somewhere else. You don't have to worry about selling if you want to leave (how long will that take?) and you'll need to make sure you don't end-up in a dispute as that'll have to be declared.

    Two sides to every story :)

    great minds :)
    :beer: Well aint funny how its the little things in life that mean the most? Not where you live, the car you drive or the price tag on your clothes.
    Theres no dollar sign on piece of mind
    This Ive come to know...
    So if you agree have a drink with me, raise your glasses for a toast :beer:
  • brionabriona Forumite
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    ali007 wrote:
    This surely is the flaw in the argument - I know a lot of people who rent - NONE of them save any money.

    I DO enjoy having holidays which I would certainly NOT be able to afford if I was spending £700pm [or more] on a mortgage and associated home-ownership costs but that's not to say I don't have any other savings... It's BECAUSE my rent is only £185pm that I can afford to both save and have holidays. Yes, I may have had to make a few compromises along the way, e.g., I'm sharing with four others in a nice area but a rather studenty house and yes, it's been a bit hit and miss at times, but I am happy to live this way so that I can afford the other things I want in life.
    ali007 wrote:
    They will end up forever renting, with no savings, whereas a mortgage WILL be paid for.

    I don't think "renting forever" should carry the stigma it appears to. Reading through this thread, I have noticed a common [mis?] perception which is that after the fixed period of 25 years all you home-owners will actually OWN your houses. This certainly hasn't rung true for many home-owners I know who have mortgaged and re-mortgaged to the point where if interest rates rise by even a fraction, they will quickly find themselves in negative equity.

    Clearly the problem is that given the UK's so-called 'debt culture', people's expenditure regularly exceeds their incomings [hopefully not in the case of savvy MSE-ers] until the only access they have to further credit is through re-mortgaging the property, and thus extending the loan period. The extention of the term means that they will have to work longer to pay it off, and really working till you're 80 to pay the 'own' the house you purchased five decades ago doesn't hold much appeal...

    And how about the property-rich but cash-poor pensioners? Obviously you can downsize, but that is dependent on house-prices having come down enough for anyone to be able to afford to purchase your house and free up that income. A house is only worth what someone will pay for it. And sadly, even if I wanted a house, as a single girl on an average salary, and with house prices continuing to rise, I will never be able to buy and free up some of the property riches for those who need the money...
    If I don't respond to your posts, it's probably because you're on my 'Ignore' list.
  • westernpromisewesternpromise
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    Here's a question:

    If a lot of people are prepared to overstretch themselves to "get on the property ladder" (I hate that phrase!) and end up paying maybe three-fifths of their monthly salary in mortgage payments when they could be renting for more like two-fifths, then what is stopping people renting with two-fifths and investing the extra fifth?

    That's a reasonable strategy. The only thing to beware of is that similar thinking led to the endowment shortfalls fiasco. People paid just the interest on their mortgage to the lender, and instead of repaying principal they invested the equivalent amount, in the belief that they'd get better returns. When those investments didn't perform as expected, they ended up out of pocket.

    If you rent, and invest the cash difference between renting and buying, you are making a similar bet - that your investment will outperform the return on paying off a mortgage at the mortgage interest rate.
  • Yes, what I was trying to say is that, on an estate where all or most houses are rented, you tend to find more problem families than on estates that are all private. I'm sure there are exceptions to this rule.

    so er, rent where it's mainly owner occupiers?

    This is a very poor argument for owning, as the character of estates/roads changes hugely over 20 years, and your trendy newbuild flat might turn into a soulless BTL hell with few owner occupiers in the space of a few years, or a housing benefit haven.

    If you rent, if things go bad you move. If you own it's much harder.
    My policies are based not on some economics theory, but on things I and millions like me were brought up with: an honest day's work for an honest day's pay; live within your means; put by a nest egg for a rainy day; pay your bills on time; support the police - Margaret Thatcher.
  • Jags_2Jags_2 Forumite
    21 Posts
    jodenice wrote:
    I have to say i agree - I have just started the process of buying my first flat and never mind the money, it will cost slightly more than my rent, but its bigger, we can decorate, ITS OURS! Can't wait.

    Renting was good when I was younger but my problem was that once you start renting its nigh on impossible to start saving for a deposit. I got some inheritance or I'd be looking at the next twenty years paying somebody else to live in their damp property (when I could be living in my OWN damp property :) )

    Never mind the money? are you sure you're on the right forum?!
  • Gorgeous_GeorgeGorgeous_George Forumite
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    I think we are missing the point.

    I own timeshares so that I can holiday with other timeshare owners. I would hate to go on holiday with 100's of Sun readers who saved tokens to buy a holiday for a pound.

    I drive a car so that I don't have to be driven by other people.

    It is a problem when owner occupier housing estates are infiltrated by bad neighbours. Yes, these bad neighbourts can be owner occupiers but, in my experience, they are more likely to be people being housed by the council (druggies or single parent families with out of control kids and before I get slated, they do exist - ask Tony Blair).

    If the house next door was rented by bad neighbours, I'd speak to the LL. If they owned the place, I could speak to environmental health or the Police.

    Anyway, we're looking at renting or buying. Better still might be to live in a caravan or old bus.

    :)

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • westernpromisewesternpromise
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    Renting would haver been even more attractive if the Tories hadn't sold council houses to buy votes.

    That's one way of thinking about it. Another is that it was the single biggest redistribution of wealth toward the poor there has ever been, and that it set council tenants free from dependence on the state. Free to move elsewhere if they chose to; free to build up something to pass on to their children; free to build up something for their own retirement.

    Of course, current thinking is more along the lines of "Keep them on benefits so they'll keep on voting for the party that pays the biggest, easiest benefits".
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