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

Over the short term, especially at the moment IMO, renting is often a better bet.

Over the long term (i.e. 15+ years) then buying is nearly always the better bet.

I don't subscribe to the view that renting is dead money though. The rent pays for you to occupy the property for the time of your tenancy, the service of the landlord or agent to fix things as and when they are broken and the flexibility of living somewhere that you can leave with short notice and little hassle.
 
Im 99% of cases it's better to buy.
peopel some times compare rent to mortgages directly.
But rent should be compared to the cost of interest only mortgages. Not the price of *** property.

So if rent costs less than the interest incurred then it's "better" to rent. If rent costs more than interest it's better to buy. But then most people will need a house for there pension, so in that cases it's almost always better to buy.
 
Personally, I don't think you can put a price on owning your own home. I've lived in rented places for the past 3-4 years, just moved into my first home in March this year. There is no comparison; when you rent you'll always be living in someone else's house.
 
I don't quite understand the logic of the people renting a place for half the value of the mortgage that goes with it. I didn't think you can get a buy to let mortgage (basically interest only) without the rent-able value being somewhere near the repayment. Thats basically why they let you have more than one but to let property. Apart from raising a deposit your easily able to rent for more than the repayments are on a place *confused*
 
I think it's interesting that some places are cheaper to rent and some are cheaper to buy.

To rent a flat in my block would cost another £50-100 per month on top of what I'm paying on my mortgage. Not enough of a difference for me to say it's definitely better to buy than rent though - it all depends on your circumstances.
 
Jon Frost said:
buying is better, you are paying for the house and actally see something at the end of your period in the building

/close thread.
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Have you missed the whole point of the thread? The whole discussion is about this not necessarily being the case. The rent on my house for example, is considerably less than the interest ALONE would be when buying it, or anything comparible to it.
 
I just can't justify renting. You may as well take all of the money and burn it. Even paying interest only, you still have *something* to show for it even if you don't fully own it. Get on the property ladder as early as you can, if you can, and try your damdest to stay there.
 
Butters said:
I just can't justify renting. You may as well take all of the money and burn it. Even paying interest only, you still have *something* to show for it even if you don't fully own it. Get on the property ladder as early as you can, if you can, and try your damdest to stay there.
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How do you have anything to show for it on an interest only term? You are relying on the market rising, and you assume that rental values are on par with purchase values in the area.

Take me for example.

My house rental is £550 per month, inclusive of all taxes.
My house would be worth approximately £250,000 on the open market.

Assuming a 10% deposit i would require a £225,000 mortgage to buy it. The interest alone would be approximately £1100 per month. Double that of the rental value. I would then have £150 per month council tax to pay on top. Total extra outlay per month would be £700 per month, before i am even looking at paying off any capital. Plus i would be £25,000 down in savings.

Even when i buy i will keep this rental going, as in this area its cheaper to rent than it is to buy. I will purchase in another area where this does not apply, it will then be let.
 
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Your still looking to buy, I can't see it ever being better to rent long term.

Mortgage is 25 years.
Rent might be 70+ years.
Houses prices always go up in price over a long period, might be glitches in *** short term, but long term it's always up.
House can pay for retirement, rent can't
If your renting, you can't decorate or alter the house, this is a very big problem.
As house prices increase, so will rent, again this is looking long-term.

I can't see where it would ever be better to rent long term.
 
Butters said:
I just can't justify renting. You may as well take all of the money and burn it. Even paying interest only, you still have *something* to show for it even if you don't fully own it. Get on the property ladder as early as you can, if you can, and try your damdest to stay there.
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I dont understand this mentality. It's hardly wasting money, as afterall you need a place to live. Just like you need food and water to survive. Is that wasting money? Making any kind of money on a house is surely relying on prices rising, or you putting work into it (which, you dont need to do in rented). If you buy a house 'as early as you can' you get the whole *fun* experience of selling/buying should you wish to relocate. Which if you're young is going to happen a lot. What a hassle.

EDIT: I'm not saying i want to rent for all my life, but it seems silly to have so much pressure on people to 'get on the property ladder'. There's far too much snobbery too. My girlfriend lives on a first floor flat and the old biddy next door is 90-odd so wants a stairlift. The owners of the flats are having meetings and votes to decide on whether or not it should be allowed (afterall, the biddy should probably be in a home by now). She's not allowed to go to any of these meetings, even though it's her alone that will be affected by a huge great stairlift on her stairs (there's only her flat and the biddy's on the floor). Luckily her landlord is arguing her case for her. It seems ridiculous she doesnt get a say at all, considering she is the one living there.
 
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AcidHell2 said:
Your still looking to buy, I can't see it ever being better to rent long term.

I can't see where it would ever be better to rent long term.
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Thing is, i want to live in this area, and in this area (north of newbury) £250,000 or thereabouts is the absolute minimum that it would cost to buy somewhere where i would be willing to live.

I will be buying elsewhere, as here buying just doesnt work. As you can see above i am paying around £700pm less than it would cost if i bought.

Point is, renting is a sensible solution in some area's for some people. It is completely wrong to assume that people who rent are people who have no option to buy. For what its worth i can easily afford to buy a house, but i never ever would here.
 
Jez said:
Point is, renting is a sensible solution in some area's for some people. It is completely wrong to assume that people who rent are people who have no option to buy. For what its worth i can easily afford to buy a house, but i never ever would here.
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But your buying, it doesn't matter if you don't live there you get all the benefits of buying. It's pointless just renting, unless you can't afford to buy.
 
AcidHell2 said:
But your buying, it doesn't matter if you don't live there you get all the benefits of buying. It's pointless just renting, unless you can't afford to buy.
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Certainly at the moment, in this area anyone wishing to move here would be better off renting by a big margin. Whether they buy elsewhere or not it is simply far cheaper to rent. The difference would be living in a individual detached house in the country with gardens and garages such as mine, and a little terrace where your cars will be parked communally with other people in an area of town where you are going to have to lock up every time you go out and worry about leaving things on display in your cars etc.

Thats a huge compromise, given that the only additional benefits are the possibility of making a capital gain on the property some 25 years down the line. I'd rather rent and have a better standard of living. This isnt my plan but comparing market value of my house to rental value, 25 years down the line i could have saved enough to buy the house in cash anyway should i change my mind.
 
I hate the "rent is dead money" argument. It ISN'T dead money, because you've had somewhere to live the whole time! That's like saying that your mobile phone line rental is dead money. You're getting something that's intangible, that doesn't mean you're getting nothing
 
Sic said:
I hate the "rent is dead money" argument. It ISN'T dead money, because you've had somewhere to live the whole time! That's like saying that your mobile phone line rental is dead money. You're getting something that's intangible, that doesn't mean you're getting nothing
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it isn't dead money, but in most cases very few exceptions, it's a waste of money at best.
 
AcidHell2 said:
it isn't dead money, but in most cases very few exceptions, it's a waste of money at best.
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How is it a waste when with the same affordability you can get a vastly superior property. That is worth it to some people, and the type of property you can get for rental value of my house is below the line at which i would be willing to live.

Neither is a bad option is the point, i dont understand why you seem to be so pro purchasing.
 
Jez said:
How is it a waste when with the same affordability you can get a vastly superior property. That is worth it to some people, and the type of property you can get for rental value of my house is below the line at which i would be willing to live.
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Yours sounds like one of those exceptions. However financially it would still make more sense to move to a cheaper area or cheaper house and buy. But you've ruled that out. It also depends on your pay and how much you can save.

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.
 
ACH2 - you seem to be missing the entire point that if I rent for cheaper than the interest on the mortgage, then I can invest that in a way which may do better than the housing market.

For example. A house costs £800pm to rent, but the mortgage is £1500pm. I can take that £700pm that I'm saving and invest it. If I invest it wisely, I'll do better than the housing market and be in a better financial position than had I ploughed it all into a mortgage. After 25 years I've had somewhere to live, and now a total of £210k invested, which over 25 years will have grown quite a bit assuming I invested wisely.

I don't have a house, but I've still got a similar value in terms of assets in other investments. A house isn't a magical thing, it's just another form of investment that too many people jump into like sheep without considering alternatives.

It's a viable financial option to take out an interest only mortgage (basically renting at a constant rate off the bank) and throw the capital against a market that might do better than the housing market. If you play your cards right, you'll come out ahead of those who would have just bought the house.
 
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