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Is homeownership as opposed to renting still a no-brainer?


Halo Stickman
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I’ve been a homeowner (mortgage payer) since the early 80s; back then, buying a house, as opposed to renting, seemed a no-brainer. Like many others, I’ve benefited financially from being a homeowner, although possibly not as much as my parents, who bought their first house in the late 50s. Of course, contrary to many people’s expectations, it’s not a god-given right for house prices to continually rise, and I did lose money on a property that I purchased in 1988 and sold in 1996 – this at a time when interest repayments were astronomical. I’m sure I would have been better off renting during that period.

 

My sons are now starting careers that look likely to involve a lot of moving from one place to another (partly from choice, partly from necessity), and I can’t really see them buying into the same homeownership-at-all-costs mentally of previous generations. It seems to me that renting does have some advantages. For one thing, it does away with all the hassle of selling your house if you want to move from one place to another quickly. Another thing is house maintenance. Now, I’m quite handy at DIY, and I don’t like paying people to do something that I can do myself; but there are times when keeping my house up together feels like one long struggle against the second law of thermodynamics (i.e. everything turns to ratshi t). At such times, I find myself wondering whether I’d be better off renting a place and letting the landlord worry about it falling down.

 

And, at the end of the day, my sons will probably have to sell my house to pay for my care-home costs!

 

Do people nowadays aspire to homeownership in the same way as previous generations? Is it still a no-brainer?

Edited by Halo Stickman
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I’ve been a homeowner (mortgage payer) since the early 80s; back then, buying a house, as opposed to renting, seemed a no-brainer. Like many others, I’ve benefited financially from being a homeowner, although possible not as much as my parents, who bought their first house in the late 50s. Of course, contrary to many people’s expectations, it’s not a god-given right for house prices to continually rise, and I did lose money on a property that I purchased in 1988 and sold in 1996 – this at a time when interest repayments were astronomical. I’m sure I would have been better off renting during that period.

 

My sons are now starting careers that look likely to involve a lot of moving from one place to another (partly from choice, partly from necessity), and I can’t really see them buying into the same homeownership-at-all-costs mentally of previous generations. It seems to me that renting does have some advantages. For one thing, it does away with all the hassle of selling your house if you want to move from one place to another quickly. Another thing is house maintenance. Now, I’m quite handy at DIY, and I don’t like paying people to do something that I can do myself; but there are times when keeping my house up together feels like one long struggle against the second law of thermodynamics (i.e. everything turns to ratshi t). At such times, I find myself wondering whether I’d be better off renting a place and letting the landlord worry about it falling down.

 

And, at the end of the day, my sons will probably end up having to sell my house to pay for my care-home costs!

 

Do people nowadays aspire to homeownership in the same way as previous generations? Is it still a no-brainer?

 

May I ask how old your sons are? I may be in a similar boat to them.

 

I'm 24, about 2 years into my "Career". I rent in London, meaning that after rent, bills, tax travel etc there really isn't much left to save towards a deposit.

 

It is frustrating, as I could afford the mortgage payments, but yeah trying to rent and get together a deposit is nigh on impossible. I think for many people of 'my generation' (sorry hate that phrase), homeownership is less of an option as we have to go where the work is - which is often Cities, which generally have higher housing costs due to a lack of availability.

 

The annoying thing with renting is you are paying someone else's mortgage, and some, without the return (in theory) you get from ownership. This is made worse by the fact that Landlords are just evil. Money grabbing, schemers that will do anything, regularly and continually brake the law cashing in on peoples lack of knowledge to nickle and dime everything they can out of tenants. In busy Cities they know they hold all the cards, so can completely take advantage of people. There really should be tougher regulation on them, although granted I am sure there are plenty of nightmare tenants around too.

 

Attitudes will probably shift away from the ownership at all costs I think, there are plenty of other places where homeownership is much less of a concern - although housing is often cheaper in these places too.

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A lot of houses here have a self contained part of their house that people rent out as a flat, often a whole floor of the house. This helps them meet the cost of their mortgage and of course when they are older and don't need the extra income anymore, they have a place where family can stay on a visit without everyone driving each other mad. Houses here are generally a bit bigger though.

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In many (most?) other countries the housing market in general is less tight with more choice. I'd happily rent long term in the US or Germany for example. The standards tends to be higher and there is more security. In Britain you have to be lucky to find a place which isnt a bit crappy - and if it is good its likely to be a short term rent and the owner wants it back within a year.

 

In Minnesota I stayed in a nice aircon 2 bed 1000sq feet (100sqm) house for a month, all bills included, for less than £400. In the UK you mostly cant find 'stay as short or as long as you want' places and if you do they'd be four times the price.

Edited by buctootim
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It depends really? If you buy a house you have the rate and mortgage payments, but at the end of it all you receive a capital asset of no small value. If you rent then you will have more disposable income to invest so I would argue that if you think you can achieve a return in excess of property value inflation it would be better to rent and invest the excess money rather than buying.

 

House prices have consistently increased though so it's usually a safe investment.

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I refused to rent point blank. I know for some people that isn't possible but if you work near where you were brought up and you have good parents it's a no brainer. It has meant not moving out until 25 but i'll benefit in the long run.

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I'm glad I got on the market when I did, nearly 15 years ago now. I don't know how first time buyers do it these days without help. My first property was a flat I bought on my own, the deposit was a minimum of 5% of the vale of the property, £5,000. A lad I work with is moving is with his other half and he's talking about needing a deposit of around £25,000.

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You have two choices, rent, pay your money each month to someone else and have **** all at the end of it, or buy, pay money to the bank and have a house at the end of it.

 

25 years might seem like a long time, but when that 25 years is up you'll have paid off your house, your outgoings will fall dramatically, your disposable income will go up massively and you'll have something worth hundreds of thousands in your own name.

 

The only reason I can see for anyone to rent is if they can;t get a mortgage, otherwise it;s a no brainer.

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I've always looked at my mortgage as rent, rather than a debt. We pay the building society rent for 25 years and at the end, they give us the house. I suppose its a very simplistic approach but its worked for me and stops me worrying about debt or negative equity. Obviously, the only downside is the maintaince costs, but with next door renting their place for £1100 our mortgage payments of £480 will leave enough money go cover any issues there.

 

Personally, its the stability of ownership that I like, and the flexibility to do what the hell we like with the house. Have 4 kids ranging from 13 to 25, one is an owner, 2 at school and one has rented, been back home, rented again and been back home about 3 times. I would also encourage them to try and buy, but its not easy. Wish I could help them out, but barring a lottery win, they'll be on their own.

 

Mrs Duck is pressing me to use some of the equity in our place (about 200k) to remortgage and buy a smaller place to rent out. Her idea is when the kids have gone, we move into it and then rent the 4 bed family house we're in at present out, providing a retirment income as the mortgage will be paid off before that. Me, im not so sure as it goes against my mortgage is rent philosophy.

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