Buy or Rent?

by Guest Wed Aug 26, 2015 6:55 pm

It seems to be popular opinion that we are becoming a nation of rent payers rather than home owners.

Based on a couple earning £20,000 a year each, a house price of £175,000 a year with a 10% deposit repayments could vary from £598 a month to £725 a month over 40 years depending on product choice.

http://www.halifax.co.uk/mortgages/mortgage-calculator/calculator/

With average rents at least this amount and in excess in some areas would you choose to buy or rent?

Longer term mortgages seem to be becoming the norm and are quite a commitment. However, I'd rather see something at the end of 40 years rather than lining a landlord's pocket.

I think parents more and more are funding their children's deposits - this house would require a deposit of £17,500 for a 90% loan to value. Not easy to save up if you're paying rent at the same time affraid

by Ben Reilly Wed Aug 26, 2015 7:27 pm

I actually prefer to rent because while the landlord is making money, he/she is also having to fix everything that goes wrong and maintain the place well enough to keep me from moving. I've only actually ever had four apartments in my adult life, and only stayed a short time in two of them.

by Guest Wed Aug 26, 2015 7:32 pm

Ben_Reilly wrote:I actually prefer to rent because while the landlord is making money, he/she is also having to fix everything that goes wrong and maintain the place well enough to keep me from moving. I've only actually ever had four apartments in my adult life, and only stayed a short time in two of them.

Hi Ben x

That's true you are not responsible for maintenance so you swap uncertainty for the certainty of a set monthly payment, a bit like insurance in a way.

Renting is expensive here, how does buying apposed to renting stack up over the pond? Smile

by Ben Reilly Wed Aug 26, 2015 7:43 pm

It varies a lot from city to city and state to state. The New York Times has a good calculator which says, on average, if your monthly payment is going to be higher than $900, buying makes more financial sense than renting, but that it makes more sense to rent if you can find a comparable place that charges under $900 per month. (that would be about £582, by the way)

by Ben Reilly Wed Aug 26, 2015 7:47 pm

I should add that if you're good at researching rentals, you can make out like a bandit. I have 700 square feet for me and my dog, new appliances, my apartment was remodeled just a few years ago, I live in a safe, walkable community and I pay $540 a month, or about £350.

by Guest Wed Aug 26, 2015 7:48 pm

Ben_Reilly wrote:It varies a lot from city to city and state to state. The New York Times has a good calculator which says, on average, if your monthly payment is going to be higher than $900, buying makes more financial sense than renting, but that it makes more sense to rent if you can find a comparable place that charges under $900 per month. (that would be about £582, by the way)

So I'm guessing renting makes financial sense for you or is it personal choice? We are about 3.5 years off fully owning our home. No kids so no children to leave it to but I have a large family who I love to pieces.

Sadly I suspect all that investment will be spent on elderly care if we make it!!! Laughing

I hope at least it would give us choices Buy or Rent? Questi13

by Ben Reilly Wed Aug 26, 2015 7:53 pm

feelthelove wrote:
Ben_Reilly wrote:It varies a lot from city to city and state to state. The New York Times has a good calculator which says, on average, if your monthly payment is going to be higher than $900, buying makes more financial sense than renting, but that it makes more sense to rent if you can find a comparable place that charges under $900 per month. (that would be about £582, by the way)

So I'm guessing renting makes financial sense for you or is it personal choice? We are about 3.5 years off fully owning our home. No kids so no children to leave it to but I have a large family who I love to pieces.

Sadly I suspect all that investment will be spent on elderly care if we make it!!!

I hope at least it would give us choices

It's a combination of the two for me, really. As a journalist, it's never good to get too tied to one spot -- though I live in a good market for journalists to work in, I have friends who've had to move across the country several times for work. That's a lot easier to do when you rent, even if you're in a lease like I am. Also, being single, most houses here are so big that it would be way more space than I needed. It seems like most of the houses around me are two bedrooms minimum; one-bedrooms are practically unheard of, as are houses with less than 1,000 square feet.

by Guest Wed Aug 26, 2015 8:00 pm

Ben_Reilly wrote:
feelthelove wrote:

So I'm guessing renting makes financial sense for you or is it personal choice? We are about 3.5 years off fully owning our home. No kids so no children to leave it to but I have a large family who I love to pieces.

Sadly I suspect all that investment will be spent on elderly care if we make it!!!

I hope at least it would give us choices

It's a combination of the two for me, really. As a journalist, it's never good to get too tied to one spot -- though I live in a good market for journalists to work in, I have friends who've had to move across the country several times for work. That's a lot easier to do when you rent, even if you're in a lease like I am. Also, being single, most houses here are so big that it would be way more space than I needed. It seems like most of the houses around me are two bedrooms minimum; one-bedrooms are practically unheard of, as are houses with less than 1,000 square feet.

It's true, renting does give you greater flexibility. My husband's sister lives in Kansas and the house prices there are nothing like here. We could buy a substantially bigger home but what's the point of having space you don't need???

Just more to clean Buy or Rent? No_fai11

x

by eddie Wed Aug 26, 2015 8:43 pm

I read somewhere, that it's only really the English that are obsessed with owning their own homes.

by Tommy Monk Wed Aug 26, 2015 9:32 pm

If you are working you should be paying every month into buying your place rather than paying the same/similar amount to someone else to be buying the place for them to eventually own...

Unfortunately the system got fucked up a few years ago with mass immigration and the roll out of mass buy to let mortgages that allowed some to sign on the dotted line to borrow to 'own' too many places and give so many others no choice but to have to 'rent' off them, as they had swallowed up all the available supply, and forced into buying the places for them...

I think a radical overhaul is needed...

Working and living and being able to spend your money on owning your own place is a fundamental part of actually wanting to work in the first place, and it's a major part of your life struggle...

I don't want to have to work all my life just to buy someone else a house because they got there first with the loan and mortgage etc...

If I'm paying for it then I want to own it!!!

by veya_victaous Wed Aug 26, 2015 11:08 pm

eddie wrote:I read somewhere, that it's only really the English that are obsessed with owning their own homes.

we are too.. I'm in the first generation to be forced out of the market by greedy investors Sad

by veya_victaous Wed Aug 26, 2015 11:17 pm

Ben_Reilly wrote:I should add that if you're good at researching rentals, you can make out like a bandit. I have 700 square feet for me and my dog, new appliances, my apartment was remodeled just a few years ago, I live in a safe, walkable community and I pay $540 a month, or about £350.

here apartment/rentals never come furnished and rent of a 2 bedroom near the city (less than half hour drive) would cost at least $500 a week. looked at some new apartments near work similar in size to yours and they want $750 a week, on a good wage i only clear about $1200 a week. Our system is broken at the moment as only with the baby boomers has shelter changed from a basic necessity to a Investor commodity.

American has a better system for renters although i suspect it is because this happened earlier and a previous generation would have felt the pain. Neutral

by Original Quill Thu Aug 27, 2015 6:15 am

Depends on where you go. As one would expect, the San Francisco area and the New York/New Jersey corridor are the two most expensive places in the US. And, they are the two largest income areas.

I have a smaller rental unit (a fourplex) in Sausalito that I could have traded for a whole farm in Maryland.

by veya_victaous Thu Aug 27, 2015 6:52 am

@quill
yes which is not an option for most Aussies for employment reasons.
there is not many jobs outside of the 4 eastern cities (except for mining)

and yes I am seriously considering buying 100 acres a bit inland from wolf (about 4 hours from sydney) over half a 2 bedroom apartment in Sydney for the same money

by Raggamuffin Thu Aug 27, 2015 11:38 am

Ben_Reilly wrote:I should add that if you're good at researching rentals, you can make out like a bandit. I have 700 square feet for me and my dog, new appliances, my apartment was remodeled just a few years ago, I live in a safe, walkable community and I pay $540 a month, or about £350.

I've noticed that Americans tend to talk in terms of square feet when it comes to housing, but that means nothing to me. Laughing

Is that a small place?

by nicko Thu Aug 27, 2015 11:59 am

Ben. What happens in America if you are renting and you lose your job or are too sick to work, will the Government pay all your rent or just some of it?

by Original Quill Thu Aug 27, 2015 4:46 pm

veya_victaous wrote:@quill
yes which is not an option for most Aussies for employment reasons.
there is not many jobs outside of the 4 eastern cities (except for mining)

and yes I am seriously considering buying 100 acres a bit inland from wolf (about 4 hours from sydney) over half a 2 bedroom apartment in Sydney for the same money

From what I can see from pictures, Lake Macquarie is nice. Actually, not far from Sydney.

Buy or Rent? Map

by Original Quill Thu Aug 27, 2015 4:51 pm

nicko wrote:Ben. What happens in America if you are renting and you lose your job or are too sick to work, will the Government pay all your rent or just some of it?

Wiki wrote:Section 8 of the Housing Act of 1937 (42 U.S.C. § 1437f), often called Section 8, as repeatedly amended, authorizes the payment of rental housing assistance to private landlords on behalf of approximately 4.8 million low-income households as of 2008[1] in the United States. The largest part of the section is the Housing Choice Voucher program which pays a large portion of the rents and utilities of about 2.1 million households. The U.S. Department of Housing and Urban Development manages the Section 8 programs.[2]

by Ben Reilly Thu Aug 27, 2015 4:56 pm

Raggamuffin wrote:
Ben_Reilly wrote:I should add that if you're good at researching rentals, you can make out like a bandit. I have 700 square feet for me and my dog, new appliances, my apartment was remodeled just a few years ago, I live in a safe, walkable community and I pay $540 a month, or about £350.

I've noticed that Americans tend to talk in terms of square feet when it comes to housing, but that means nothing to me. Is that a small place?

It's plenty of room for a single person or a couple, but no more than 2. Just saw that the average one-bedroom apartment in the UK is 495 square feet.

by Raggamuffin Thu Aug 27, 2015 5:09 pm

Ben_Reilly wrote:
Raggamuffin wrote:

I've noticed that Americans tend to talk in terms of square feet when it comes to housing, but that means nothing to me. Is that a small place?

It's plenty of room for a single person or a couple, but no more than 2. Just saw that the average one-bedroom apartment in the UK is 495 square feet.

So your place is quite big then.

by nicko Thu Aug 27, 2015 5:10 pm

Looking at the average new house built in England I am shocked at how small they are,
[in sq footage.]Some of them look no larger in width than my Living room! ie 12 ft

by Raggamuffin Thu Aug 27, 2015 5:14 pm

nicko wrote:Looking at the average new house built in England I am shocked at how small they are,
[in sq footage.]Some of them look no larger in width than my Living room! ie 12 ft

Some of them are tiny. I rented a new house once, and there was absolutely no room for a small table anywhere. There was no room in the kitchen for a bin either. Laughing

Some of those Victorian terraced houses are tiny as well though.

by Guest Thu Aug 27, 2015 8:04 pm

Tommy Monk wrote:
If you are working you should be paying every month into buying your place rather than paying the same/similar amount to someone else to be buying the place for them to eventually own...

Unfortunately the system got fucked up a few years ago with mass immigration and the roll out of mass buy to let mortgages that allowed some to sign on the dotted line to borrow to 'own' too many places and give so many others no choice but to have to 'rent' off them, as they had swallowed up all the available supply, and forced into buying the places for them...

I think a radical overhaul is needed...

Working and living and being able to spend your money on owning your own place is a fundamental part of actually wanting to work in the first place, and it's a major part of your life struggle...

I don't want to have to work all my life just to buy someone else a house because they got there first with the loan and mortgage etc...

If I'm paying for it then I want to own it!!!

It just feels like wasting money to me paying rent but I guess it's no different to any other bill that we have to pay like food, gas, electric etc.

I like the security of owning my home and having that financial back up, particularly in older age. Who knows what kind of state pension will be available or nursing care in another 20 years let alone 50. I'd rather provide for myself while I can. With people living longer the resources simply aren't there

Whether I pay in it rent or I pay it in elderly care at least it might give me some choices. Hopefully I'll be able to leave my nieces and nephews an inheritance for their futures.

by eddie Fri Aug 28, 2015 12:20 am

I'm in a new build and it's actually quite big!
Mine is three storey so I think, by building upwards, the houses are getting bigger.

by Original Quill Fri Aug 28, 2015 5:11 am

FTL wrote:I like the security of owning my home and having that financial back up, particularly in older age.

Security is an illusion, especially if you equate it with static 'things'. The only security is to keep moving. Stay in the race and never stop.

An old man used to tell me: If you snooze, you lose.

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