The only way that i see the comparison between renting and buying as fair is to build in the additional cost of purchasing an annuity later in life sufficient to pay the rent for life.
Otherwise renting doesnt compare i guess
Costs of rent vs. buy...
- Thread starter Jimbo Mahoney
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The only way that i see the comparison between renting and buying as fair is to build in the additional cost of purchasing an annuity later in life sufficient to pay the rent for life.
Otherwise renting doesnt compare i guess
Caporegime
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Could be an option, lets see what rental prices are like in the future 
Well you don't have the option of retaining a large proportion of your payments when you buy food, elecricity, or a holiday.
That doesn't mean it is throwing money away though.
Perhaps their long term plan is to buy a house? Who knows, it is irrelevant, but saying that renting is throwing money down the drain is just plain incorrect in the same way that paying for food would be considered throwing money away.
It is strange that home ownership is only important in English speaking countries. The rest of the world is quite happy renting, even when they are richer than the British.
And no, I'm homeowner . I just look at the pros as well as cons (e.g. the previous owner lost 75K in 5 years despite doing 25K of upgrades plus the 15K legal fees and goodness know how much of interest/insurance/tax/maintenance).
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The long term plan is to buy, but I'm not fussed about when that is as long as I buy before I'm 40, even assuming I take the full 25 years then that means I'll be mortgage free comfortably before I retire.
I'm just about 30 now (next month), got no real ties to the area as I work from home and no family nearby, just mates. Currently rent a 2-bed detached bungalow with garage for £600 a month, to buy something even close to that would cost £180k+ around here, I could do that but in my current situation I'd be paying a decent chunk more a month to do so. And that's not factoring in any repairs/upgrades/decorating I'd end up spending on.
It's quite possible that my reasons for staying in this area change in which case buying here doesn't overly make sense if it's cheaper elsewhere and/or I end up spending thousands on moving anyway. On the other hand it could be that I stay here long term, but then in the next 10 years how is the housing market going to go, am I going to regret not jumping in now or is it all going to come tumbling down once the various vote winning schemes end and rates rise?
So yeah, for the time being I'm sitting on the sidelines, saving a bigger deposit and seeing how the wind blows, if the right house comes on the market then I might buy, but I'm not in any rush.
You could flip that on its head and say the only 'reason' wages are [effectively] so crap is because houses are so ****ing expensive.
The reality is that neither is the reason/cause of the other it is just a relative comparison. Houses wouldn't seem so expensive if wages were higher; wages wouldn't seem so poor if houses were cheaper.
I think this leads nicely into what HangTime put above. If the rental market wasn't essentially the Wild West with people being ripped off left, right and centre and mickey-taking rent increases almost forcing people to move house every 1-2 years then more people would be happy to rent. The whole housing system in this country is an almost irrecoverable mess.
Soldato
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In many areas it's now cheaper to rent than it is to buy in the short term.
What your own home offers you is security. Especially in old age.
Someone owns the homes in every country.
What your own home offers you is security. Especially in old age.
Someone owns the homes in every country.
No we don't, most of our markets are dominated by huge international corporations who pay only a fraction of the tax they ought to. As a result our balance of payments is for **** and the profitability of these companies is essentially being subsidized by taxpayers while they are allowed to stifle our British entrepreneurs.Wut?We've got one of the most competitive tax systems in the world...
Well if there is an alternative which would allow you to retain some of the money then yes it is.
Cost of living has risen higher than wages though, we know that - and because most things are imported in the UK it is easy to say that wages are at fault.
This is going off topic but you're wrong. Who says how much tax a corporation is "ought to" pay? Many of these corporations that you say don't pay enough tax pay that level of tax as their profitability reflects the functions they perform.
For example, if Amazon bought a book for £1 from their supplier and sold it to a UK customer for £10, do you really think the UK should be taxing the full £9 profit? The systems that manage stock, order from suppliers, display the product for sale, hosting, maintenance, development, etc is all run out of the US. The guys in the UK only put the book in a box...
My biggest hate with renting at the moment is having to move all the time as landlords fork you every time the contracts up, it keeps their agents happy they get the fees everytime new tennants come in
its so difficult to rent somewhere in the UK and see it as a 'home'. everywhere to me feels like temporary accomodation
its so difficult to rent somewhere in the UK and see it as a 'home'. everywhere to me feels like temporary accomodation
My last two places have been fine in that regard, both places the landlord used the estate agents to find tenants but then managed the property themselves. Both let the contract going onto a rolling monthly one after 6 months and never renewed. I get the feeling that the majority of the hassle comes from the agents and not the landlords, either to somehow 'prove' they're worth what they charge, or just to fleece one or other party, scum of the earth tbh, almost as bad as lawyers
First place I was in for 3 years, she did a cursory 'inspection' when the gas check was done, rent never went up, any problems were fixed promptly without issue and we got the majority of our deposit back (some valid deductions).
Current place I'm approaching 2 years, no inspections so far, rent hasn't changed, had a couple of issues and they've been fixed ok, one was heating and I just contacted British Gas with the homecare details he gave me, second one was a fence panel down that did take a while to get fixed in the end but I didn't really care that much.
First place I was in for 3 years, she did a cursory 'inspection' when the gas check was done, rent never went up, any problems were fixed promptly without issue and we got the majority of our deposit back (some valid deductions).
Current place I'm approaching 2 years, no inspections so far, rent hasn't changed, had a couple of issues and they've been fixed ok, one was heating and I just contacted British Gas with the homecare details he gave me, second one was a fence panel down that did take a while to get fixed in the end but I didn't really care that much.
And that is just the point, many people don't have access to an alternative, so no, it is not "throwing money away".
And that is ignoring the fact that owning a house is by no means any guarantee to making any kind of profit and there are very real risks in loosing huge sums of money. As I said before, the previous owners of the house we purchased probably lost 150k over 5 years. Renting would have definitely been a much better option (hindsight is not foresight sadly) and they did everything right - the losses were completely out of their control.
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Thanks - I really am after figures on owning and maintaining a home vs. renting.
Thread seems to have gone onto renting vs. buying rather than costs of home ownership, which is what I was after.
I made a spreadsheet for all incomings and outgoings for myself which is a good thing to do anyway but will help you get a more accurate answer to your question.
Obviously you will become responsible for replacing all appliances when they break (and they do break). Modern combi boilers don't seem to be as reliable as older simpler ones and I've read not to expect much more than 10 years out of them. I've had mine just over 7 years and have just had my first major expense with it (new PCB). A replacement boiler will probably cost up to £1,500 for me, but some people have to pay a lot more than that depending on the boiler model and what else needs doing. So for the boiler replacement/maintenance alone you should budget £200/year I would say.
Fridges and washing machines are both expensive for half decent ones and again don't last forever. Budget about £130/year for those 2. Cookers can be equally or more expensive but I think last quite a while.
Then you got all the other smaller appliances such as microwaves, kettles and toasters which need replacing more often. Budget about £50/year maybe.
If you buy an apartment, you'll almost certainly have to pay ground rent as well as a maintenance fee which covers building insurance and repairs/cleaning of communal areas. The figures vary wildly but mine amounts to just under £1000/year.
Interests rates are certain to go up - eventually back to their more "normal" level of around 5%. This means you should budget for a mortgage interest rate of around 7% unless you can put a large deposit down and get a long term fixed low rate.
Other household expenses I presume you're already paying for. If you buy decent furniture it should rarely, if ever, need replacing.
I personally spend quite a lot on home improvements that are not always a necessity, however the temptation is great.
Obviously you will become responsible for replacing all appliances when they break (and they do break). Modern combi boilers don't seem to be as reliable as older simpler ones and I've read not to expect much more than 10 years out of them. I've had mine just over 7 years and have just had my first major expense with it (new PCB). A replacement boiler will probably cost up to £1,500 for me, but some people have to pay a lot more than that depending on the boiler model and what else needs doing. So for the boiler replacement/maintenance alone you should budget £200/year I would say.
Fridges and washing machines are both expensive for half decent ones and again don't last forever. Budget about £130/year for those 2. Cookers can be equally or more expensive but I think last quite a while.
Then you got all the other smaller appliances such as microwaves, kettles and toasters which need replacing more often. Budget about £50/year maybe.
If you buy an apartment, you'll almost certainly have to pay ground rent as well as a maintenance fee which covers building insurance and repairs/cleaning of communal areas. The figures vary wildly but mine amounts to just under £1000/year.
Interests rates are certain to go up - eventually back to their more "normal" level of around 5%. This means you should budget for a mortgage interest rate of around 7% unless you can put a large deposit down and get a long term fixed low rate.
Other household expenses I presume you're already paying for. If you buy decent furniture it should rarely, if ever, need replacing.
I personally spend quite a lot on home improvements that are not always a necessity, however the temptation is great.
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I've rented a house, I am a landlord, I have had three mortgaged properties the third of which i'm living in now.
I think that home ownership is overall more expensive monthly that renting, but over a lifetime no, because of course at some point you will own the property and then stop paying the mortgage.
Life for me has been a few twists and turns and the property that I aspired to own was lost in a divorce, the current place I have is costing £1250 a month for the mortgage plus all the incidental repairs, which in 18months have been none.
It would cost £1000-1200 to rent the same house in my area, we know because we rented before up the road for £1000 a month and we keep an eye on values out of interest.
When it is paid for we will be able to downsize and we will have no mortgage payments. More holidays!
Long term with renting the question is what you will do when you stop working.
As for me being a landlord, it was never my desire and it never makes any money. In the 3 years its been rented I have never drawn a penny from its separate bank account and its not on a repayment mortgage. Any time it seems to accrue a bit of money a repair comes up! The only hope I have of making money out of it is that it gains value in the future. In my experience you have to own a place for 10 years + to gain.
I think that home ownership is overall more expensive monthly that renting, but over a lifetime no, because of course at some point you will own the property and then stop paying the mortgage.
Life for me has been a few twists and turns and the property that I aspired to own was lost in a divorce, the current place I have is costing £1250 a month for the mortgage plus all the incidental repairs, which in 18months have been none.
It would cost £1000-1200 to rent the same house in my area, we know because we rented before up the road for £1000 a month and we keep an eye on values out of interest.
When it is paid for we will be able to downsize and we will have no mortgage payments. More holidays!
Long term with renting the question is what you will do when you stop working.
As for me being a landlord, it was never my desire and it never makes any money. In the 3 years its been rented I have never drawn a penny from its separate bank account and its not on a repayment mortgage. Any time it seems to accrue a bit of money a repair comes up! The only hope I have of making money out of it is that it gains value in the future. In my experience you have to own a place for 10 years + to gain.
If the difference between renting and buying an equivalent house is being 'invested' somewhere else, then the advantages of renting are huge.
Having just bought a house, my life now consists of constant trips to B&Q, payments to electricians, plasterers etc etc. Obviously all discretionary spending but it is now the sum total of my focus in life.
For the 10 years I rented, I drove sports cars, moved around, did what I want etc. Being flexible gave me more opportunities than it would have if i was stuck to one place, worrying about the boiler.
Having just bought a house, my life now consists of constant trips to B&Q, payments to electricians, plasterers etc etc. Obviously all discretionary spending but it is now the sum total of my focus in life.
For the 10 years I rented, I drove sports cars, moved around, did what I want etc. Being flexible gave me more opportunities than it would have if i was stuck to one place, worrying about the boiler.
They've taken £10 from a UK citzen - £10 UK money. They should be paying tax on it.
If they don't like it they can make way for a British firm which is willing to pay their dues and not systematically siphon all of the wealth away from the UK without paying any dues and pricing British competitors out of the market.
How much had houses around them fallen in that time though? A house isn't about making profit, it's an asset and it's value in the market is relative.
As a business housing is rubbish, but we're not talking business. We're talking shelter for life.