Buying or Renting. Which is the better option. Interesting debate.

AcidHell2 said:
I'm pro buying, as it makes far more financial sense and freedom. One of the things I hate is I can't alter my house, because I'm renting. I can't fit aerials. Make built in cupboards or do anything.
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Financially i dont agree that i am a rare exception, there are loads of people in the same boat, this whole area is the same. Completely agreed on the modifications thing though, that is a true pain the arse and something which indeed bugs me. Its a sacrifice i am willing to take for the time being, but i will eventually be moving into purchased property for pretty much this exact reason :)
 
Jez said:
Financially i dont agree that i am a rare exception, there are loads of people in the same boat.
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Me too, I'm currently paying £825pcm for a 1 bedroom flat that would probably go for around £230-£250K in the current market.
Even going for the low end of that it would be over £1200pcm for an interest only mortgage on that figure.

Long term though buying would undoubtably be a better option.

I did a spreadsheet comparing the details a while ago, will see if I can find it.
 
Hedge said:
"Renting ISNT a waste of money - although most people seem to say this like its the truth.

If your rent on a place is LESS than what an interest only mortgage would be, its financially BETTER to rent.

.... case in point, my flat costs less than HALF what my landlord pays in a mortgage. So he has to find the other half each month to make the payment up. Also, the flat is now worth nearly 60 grand LESS than what he bought it for - not much of an investment eh "

What do you guys think of what hes saying. Ill update the thread as things go on :)
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I think that guy is missing the point. He may feel smarmy about having to pay half the amount the mortgage would cost but the landlord is getting the flat at half the price so long as he keeps tennants in the flat the landlord is still laughing. Dont know how much the flat was purchased for but factoring the landlord is getting the flat for half the price perhaps a £60k hit might not be so bad and it might not even matter so long as the flat isnt being sold.
 
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sr4470 said:
Which is why I'm about 3-4 miles west of you. Even the rents in Hounslow are out of my reach...
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Yeah, it's stupid around here.
I used to live in Ashford, rents there aren't all that much lower than Twickenham but prices to buy certainly are.
I'm thinking of moving out a bit further west when I do come to buy as my budget will stretch to a 2 bedroom house with a drive and garden rather than a cramped 1 bedroom flat.
 
Haircut said:
Yeah, it's stupid around here.
I used to live in Ashford, rents there aren't all that much lower than Twickenham but prices to buy certainly are.
I'm thinking of moving out a bit further west when I do come to buy as my budget will stretch to a 2 bedroom house with a drive and garden rather than a cramped 1 bedroom flat.
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Feltham isn't a particularly desirable place to live, and rents reflect that (eg £50 a week for a room).
 
I'm sorry. Its simple. Renting is the same as buying a £30k car and giving it back to the dealer at the end of the day and not getting any money back. Why the hell would you want to do that? It was fun for a short period, it benefited me for a short period, I gained nothing and lost all that money.

Some of you are too young to appreciate anything differently, but look at property statistics over a 30 year period. Property has consistently out performed any other type of investment irrespective of its peaks and troughs.

If you can afford to do it, you should, the long term rewards are very beneficial
 
Butters said:
I'm sorry. Its simple. Renting is the same as buying a £30k car and giving it back to the dealer at the end of the day and not getting any money back.
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No it's the same as leasing a car, which many people do as it suits their circumstances.
Just like renting suits the circumstances of lots of people.
 
Haircut said:
No it's the same as leasing a car, which many people do as it suits their circumstances.
Just like renting suits the circumstances of lots of people.
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Its not really though it is? Leasing a car you get to choose the car, the spec and at least the option to buy it at the end of the term. Plus you lease a car to avoid depreciation.

Renting a house equals, in most cases, taking the only things available not neccessarily in an area you want to be in with people you dont want to live next to.
 
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Butters said:
Its not really though it is? Leasing a car you get to choose the car, the spec and at least the option to buy it at the end of the term. Plus you lease a car to avoid depreciation.

Renting a house equals, in most cases, taking the only things available not neccessarily in an area you want to be in with people you dont want to live next to.
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OK, you don't get the option to buy at the end of your rental period but I don't get your last point.

Why would you rent somewhere that's not in an area you want to live or with people you don't want to live next to?
You pick the property where you want to live, regardless of whether you're buying or renting. In fact if you end up with unpleasant neighbours it's a lot easier to move on when renting.

Also, around here at least there are more places to rent than to buy so you actually get more choice.
 
Hedge said:
".... a flat down here costs 250k ... which is 1700 a month in repayment mortgage.

You can RENT the same place for 850 a month, and pocket 850 to save in whatever way you want. If you did that over 25-40 years you would have MORE money after all that, than if you put it in property (if we are talking averages).
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But you can sell your house, which would bring in more money than you would have saved by renting, due to house prices increasing. And I would imagine, rent prices would rise much faster than mortgage repayments? And of course you own your own home.

As far as I can see, renting is money you can never get back and you don't get any property from it at the end. Whereas with buying you can get all or more money back, then you put in.
 
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Thats one thing people don't take into account when renting long term, is the increase in rent prices, compared to a mortgage, which is pretty much a known amount.
 
If you can afford to rent a place you like but not buy then there's no problem with that imho.

Just lucky that here an interest only mortgage is less than you'd pay in rent. And we know this as a guy at work owns the house 2 doors down which is the same design etc as ours and rents it out for more :)
 
AcidHell2 said:
I don't agree long term, housing makes huge gains for "little" investment, anything with a similar return would be extremely risky shares.
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Housing HAS made huge gains, there is nothing to suggest it will continue though, infact you could so easily end up in negative equity. Most people cant afford to buy at the moment. And with interest rates on the up it is becoming even more unaffordable.
 
Simon said:
Housing HAS made huge gains, there is nothing to suggest it will continue though, infact you could so easily end up in negative equity. Most people cant afford to buy at the moment. And with interest rates on the up it is becoming even more unaffordable.
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Not longterm, looking at history. Long term houses have always always gone up. Short term there maybe glitches. But long-term it always has and will remain the best investment choice.
 
me and the missus have just moved in together. we rent a really nice 2 double bedroom house, with a garden and a garage. it costs us £600pcm. it has been completely refurbished to a very high standard - i.e. new everything. a house around the corner is up for sale for £180k. it needs to be gutted and refurbished, so lets add on another £20k to cover that. so, thats £200k. with our combined salary we can only get a mortgage of about £140k. so thats a £60k deposit, and mortgage payments of around £1000pcm. neither of which are even remotely achieveable! we could possibly move to a more affordable area but it would only be more affordable because it wouldn't be as nice, plus there would be increased costs associated with the additional commute to work. for the time being rental is a great solution for us.

edit: also, so far our estate agent and landlord have been great! they provided us with a lawnmover to keep the garden tidy, a hoover to keep the carpets tidy, and when the shower leaked they sent someone around the day after to have it mended. they always give us a couple of weeks notice when people need access to the property too. can't really grumble at all. buying at the moment just isn't even on the radar!
 
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AcidHell2 said:
Thats one thing people don't take into account when renting long term, is the increase in rent prices, compared to a mortgage, which is pretty much a known amount.
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Especially in a case like Jez's or the person the OP is talking about. A mortgage isn't a 'known amount' per se in that it is tied to the interest rate, however it is not unreasonable to assume that in the long term, interest rates will not increase anything like as much as rent.

In other words you need to compare the average rental cost over e.g. 25 years with the average interest payments. It's highly unlikely that a house costing £550 to rent today will also cost £550 in 10 or 20 years time. Whereas the chance of the interest rate soaring well into double figures is pretty slim.

Basically what he is saying is that he can rent a property for far, far less than the interest payment would be on a mortgage. But in the long term all this will mean is that market forces will come to bear and the cost of renting a house will increase - if it's so much cheaper to rent, more and more people will want to rent and hence the demand increases.

Also consider the situation where house prices are increasing. This means that people buying-to-let will be wanting to charge more rent to recoup their investment. You are then left with a 'double-whammy' in that not only does your rent increase, but the 'opportunity cost' of not having invested in said house is also going up (i.e. you are missing out on more profit which could have been made from property investment).

Of course, nothing is clear cut and it is still quite possible that renting and investing may be more profitable in the long term than buying a house in some areas.
 
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