Buying or Renting - Help needed.

What worries me is that buying now you're guaranteed for interest rates to go up during your term - there's almost certainly going to be a point in the next 25 years where half the country can't afford their mortgage repayments.
 
daz said:
But you're absolutely not throwing money away.
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So The last 4 years renting I haven't thrown away 19K? I have just moved back out to someones as I realise I'm not gaining anything been in a rented property but waste. I can now save a healthy amount each month.

billysielu said:
What worries me is that buying now you're guaranteed for interest rates to go up during your term - there's almost certainly going to be a point in the next 25 years where half the country can't afford their mortgage repayments.
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I think it will be more than half the country. It's moving more n more to rented places I can see people been moved out of their homes due to defaulting and the place is then rented.
 
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[TW]Fox;19993804 said:
Just like the money spent on holidays you are no longer on wasn't 'thrown away'..
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Fantastic :D

Personally I'll be looking to buy in the future - mainly for security but not as an investment. I don't think it's worth sacrificing your lifestyle in order to rush to get on the property ladder, especially with the economy and property market in the state that it's in at the moment. Just do so when you can afford to and when the numbers make sense for your circumstances.
 
[TW]Fox;19993804 said:
No, because you gained 4 years of having somewhere to live.

Just like the money spent on holidays you are no longer on wasn't 'thrown away'.

You paid £19k and received a service for it.
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I had somewhere to live, infact I had a choice of about 5 places with family but decided to move out. Everything was fine until it hit me how much I was spending. :(
 
[TW]Fox;19993804 said:
Just like the money spent on holidays you are no longer on wasn't 'thrown away'.

You paid £19k and received a service for it.
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We call that [TW]Logic! :p

It's true though, there is too much emphasis on buying a property and renting being a waste. There are certain benefits like the zero maintenance and the flexibility.
 
you could sell your awful Subaru you got last month.

http://forums.overclockers.co.uk/showthread.php?t=18306694&highlight=username_shep_no_platinum

maybe that'll raise a deposit???

or maybe you could not buy your new high end graphics cards you want.

http://forums.overclockers.co.uk/showthread.php?t=18313606&highlight=username_shep_no_platinum

that'll save some more money towards those loans you love taking out.....

http://forums.overclockers.co.uk/showthread.php?t=18231578

Then you can buy a house i'm sure when your salary goes from 16k to 28k in one year.

Sounds like a plan.
 
mrbell1984 said:
Getting a mortgage isn't a short term reason why people go into the housing market. Normally people want to own one for life ensuring their mortgage is payed off as quick as possible.

People who rent it's like putting money into a fire as they get non of it back. Atleast people who mortgage get all of it back and if it does go into negative equity the won't loose out on what the renting will loose out. The mortgaged house still has a resale value.
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I don't think you understand the points being made. In a falling market renting can be a better solution long term. Its no more a waste of money than the interest payments on your mortgage - the fact that you're also repaying capital on the mortgage is irrelevant if the value of the house is decreasing faster than you're able to pay off. In that scenario it might well be better renting short term and putting money into a house into an overvalued house is burning money. A lot of people who bought in 2007 might well have been better off renting for a few years instead...

Then again no-one has a crystal ball - but to say that renting is 'throwing money away' is remarkably stupid. (and FWIW I own a property)
 
dowie said:
This is silly

So the last 4 years you've burned x thousand (amount spent on petrol) etc...

You got something in return for your rent did you not?
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You will find this is the general consensus in the population unfortunately. News papers have been harking on about it for so long we know nothing else - things will change yet though, I can feel in in my bones!

And OP - you need to learn the powers of being frugal before committing to anything like a mortgage judging by those three threads!!
 
I wouldn't trust the property market personally. The banks will never lend as recklessly as they did in the past which helped inflate the prices to cause people to lie or go interest only.

There again a family member has just bought an Estate Agents so I am probably very wrong.
 
Another tip, don't budget it too close if you are buying. Set aside some for unexpected issues, eg boiler giving up, something which otherwise would be the landlords problem. Also houses will need major maintenence every now and then, make sure you know what/when they are. Plan for buildings insurance too.

When you finally do own a place will you find out all these little details which suck money. Hence rent if you don't have a clear margin to take into account these sometimes unexpected issues. If you rent, these are not your problem. Looking at things, you should rent for awhile more, least you buy, and land into bigger financial problems.
 
Stop at your dads, stop all the unnecessary spending, pay off those loans and save until you are both ready to buy your own place, no matter how long it takes. Don’t feel rushed into buying either.

I just brought my own house after living at home for 27 years of my life and 6 years of saving (on my own without any financial backing of parents) and it’s the best thing I’ve ever done, even in todays current climate.
 
[TW]Fox;19993804 said:
No, because you gained 4 years of having somewhere to live.

Just like the money spent on holidays you are no longer on wasn't 'thrown away'.

You paid £19k and received a service for it.
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People tend to forget about doing a similar calculation when working out how much they have lost on the value of a house.

As it stands, the interest on our mortgage is less than how much it cost to rent a room in my last place.

When you factor in the service charges of our flat and the charges for the next property, it's pretty much even.

So if in 3 years we happen to sell for the same amount we bought, we would be no worse off financially than if we had rented, but would have had 4 years in our own flat rather than a room in a houseshare with 3 other people.

The biggest thing is that people who rent tend to not save, whereas having a mortgage forces you to put at least some money in to an investment.

For reference, the price of a flat in our development has risen 9% over the space of a year (London 4TW!) pretty much negating the interest on the mortgage (4.8%) when we sell.
 
krooton said:
The biggest thing is that people who rent tend to not save, whereas having a mortgage forces you to put at least some money in to an investment.
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That is a very good summation of what a mortgage effectively is -a forced savings or investment scheme.
 
daz said:
That is a very good summation of what a mortgage effectively is -a forced savings or investment scheme.
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You could almost look at it as the interest being the rent and the capital being savings.

Obviously the worth of this is very situational and individual, but that doesn't make either renting or buying right or wrong in a blanket sense.

What I do know is that only one of my friends who was renting was also saving, and he recently bought a place. All my other friends are renting AND are in debt with no savings.
 
As most people have said, if you don't have any issues staying at home for another year then do that.

Save as much as possible and then look at a mortage when you've moved onto the higher salary and have cleared the car loan.
 
A further point on the plus for renting at this point in his life, just starting out with a girl that you have never lived with, properly, everyday.

Being in your newly mortgaged home, left alone after it didn't work out and no clue how to dig yourself out the hole your in isn't fun, nether is splitting up and then being tied into an asset that you can't get rid of.

Call me a pessimist if you want :)
 
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