Genie Posted July 2 Share Posted July 2 (edited) 16 minutes ago, Rds1983 said: What if you can no longer afford your mortgage due to a life changing event or interest rates shooting up? What if you get a divorce and are forced to sell your house? What if you have another child and need a bigger place? There's always a risk with anything, but they'll be plusses to balance it out. I think all of those events are worse as a renter than an owner (with mortgage). If you get divorced then you can either keep the house if you can afford it. Or you sell it and have your half of the equity for the next one. If interest rates shoot up the landlord will increase the rent accordingly, or worse he has to sell the house you live in making you homeless. If you’re an owner on a fixed deal you’re protected from it for a period of time and you know exactly when the bill will change. If you need a bigger house you buy a bigger one, or extend the current one, or make do with what you have. If someone was privately renting a nice house, what do they do when they retire? Divert a big chunk of their pension money towards rent at the mercy of the landlord. I’d hate that. Edited July 2 by Genie 3 Link to comment Share on other sites More sharing options...
Rds1983 Posted July 2 VT Supporter Share Posted July 2 55 minutes ago, Genie said: I think all of those events are worse as a renter than an owner (with .). If you get divorced then you can either keep the house if you can afford it. Or you sell it and have your half of the equity for the next one. If interest rates shoot up the landlord will increase the rent accordingly, or worse he has to sell the house you live in making you homeless. If you’re an owner on a fixed deal you’re protected from it for a period of time and you know exactly when the bill will change. If you need a bigger house you buy a bigger one, or extend the current one, or make do with what you have. If someone was privately renting a nice house, what do they do when they retire? Divert a big chunk of their pension money towards rent at the mercy of the landlord. I’d hate that. For all of those scenarios (I'm sure people could come up with more), by renting you have much greater flexibility as you're not as locked in. Rent goes up, you can move to a cheaper house a lot easier, faster and cheaper than you can sell your house and buy a cheaper one if you're mortgage goes up. We're looking to extend out house. It's going to cost us best part of £100k and be 5 odd month's disruption. If we were renting, and needed somewhere bigger we'd just move. Divorce, selling the house is another time consuming and emotionally draining expense at a really bad time. If you're just renting, then you can move out a lot easier than you can sell your house. I'm not advocating for renting over buying. I own a house and hated renting as it felt like throwing money away and I wasn't in control. Just pointing out that maybe renting offers greater flexibility in some situations. Another possible benefit being, if my boiler breaks or somethingsimilar, I have to buy a new one and I'm out of pocket. If I was renting, then that's my landlords problem to solve. Link to comment Share on other sites More sharing options...
Genie Posted July 2 Share Posted July 2 14 minutes ago, Rds1983 said: Another possible benefit being, if my boiler breaks or somethingsimilar, I have to buy a new one and I'm out of pocket. If I was renting, then that's my landlords problem to solve. The landlord will factor the cost of maintenance into the rent he charges. If the boiler breaks he is replacing it out of what you paid him. I do agree though in general there are scenarios where renting works best. This discussion was about renting forever, to be a pensioner and still renting with the cost and risks around it would scare the shit out of me. Much better to have paid off the mortgage before retiring and then having a place no one can turf you out of, and much lower bills. Link to comment Share on other sites More sharing options...
Rds1983 Posted July 2 VT Supporter Share Posted July 2 26 minutes ago, Genie said: The landlord will factor the cost of maintenance into the rent he charges. If the boiler breaks he is replacing it out of what you paid him. I do agree though in general there are scenarios where renting works best. This discussion was about renting forever, to be a pensioner and still renting with the cost and risks around it would scare the shit out of me. Much better to have paid off the mortgage before retiring and then having a place no one can turf you out of, and much lower bills. The landlord might have tried to factor it in (you can't predict everything), but it's still an unforeseen expense that you wouldn't have to pick up if you rented. Maybe they feel that it's easier to get someone else (the landlord) to solve any issues that might crop up then them trying to deal with it in their old age (my in laws are nearly 80 and struggle dealing with things like this nowadays). Maybe people rent when younger but buy a place when they're middle aged and give themselves just enough time to pay the mortgage off. Maybe renting is cheaper than the mortgage and it let's them build up capital to cover any issues in later life. Maybe they figure they're just going to move into care/assisted living anyway so what's the point of having a house (and mortgage hanging around their necks). Maybe inheritance tax is prohibitive when passing on a house and they think they'll leave more to their kid's if they'd rented. Maybe they just move in with their kid's, who are renting their own place. Could just be a cultural difference. Could be completely wrong and people aren't actually renting more. Could be a plethora of reasons behind it. 2 Link to comment Share on other sites More sharing options...
markavfc40 Posted July 2 Share Posted July 2 (edited) My biggest issue with renting long term/for the whole of your adult life is that you have then spent a lifetime paying the equivalent of a mortgage but with nothing of your own at the end of it. The biggest asset I am almost certain to leave when I snuff it is my house which will eventually go to my children. Take that away and I'd simply be leaving a few quid and some possessions (a car etc). As @Geniehas said also with owning you are going to almost certainly get to a point where you have no mortgage, with a life time of renting you never reach that point of not having that expense. I'll be mortgage free in a couple of years and hopefully have a good 20-30 years without that expense. I couldn't imagine never reaching that point. Edited July 2 by markavfc40 1 Link to comment Share on other sites More sharing options...
Rds1983 Posted July 2 VT Supporter Share Posted July 2 25 minutes ago, markavfc40 said: My biggest issue with renting long term/for the whole of your adult life is that you have then spent a lifetime paying the equivalent of a mortgage but with nothing of your own at the end of it. The biggest asset I am almost certain to leave when I snuff it is my house which will eventually go to my children. Take that away and I'd simply be leaving a few quid and some possessions (a car etc). As @Geniehas said also with owning you are going to almost certainly get to a point where you have no mortgage, with a life time of renting you never reach that point of not having that expense. I'll be mortgage free in a couple of years and hopefully have a good 20-30 years without that expense. I couldn't imagine never reaching that point. As I said, I own a house and I agree this is probably the best way to go about it. Just trying to figure out and guess why it might not be for other people and would love to hear the thoughts of people who do long term rent. My main concern with buying and trying to leave the house to kid's, is that there's a decent chance my wife or I would end up in care for several year's before passing on and from what I've seen paying for this basically swallows any investments in the house. On the flip side, if you don't have the house to pay for it then I'm not sure what you do? My Dad is 69, rents and has little saved away. His 2nd wife owns a house but it's not very big or worth much. Apparently his plan is for the Government to pay for his care. Link to comment Share on other sites More sharing options...
Demitri_C Posted July 2 Share Posted July 2 37 minutes ago, markavfc40 said: My biggest issue with renting long term/for the whole of your adult life is that you have then spent a lifetime paying the equivalent of a mortgage but with nothing of your own at the end of it. The biggest asset I am almost certain to leave when I snuff it is my house which will eventually go to my children. Take that away and I'd simply be leaving a few quid and some possessions (a car etc). As @Geniehas said also with owning you are going to almost certainly get to a point where you have no mortgage, with a life time of renting you never reach that point of not having that expense. I'll be mortgage free in a couple of years and hopefully have a good 20-30 years without that expense. I couldn't imagine never reaching that point. Not if inheritance tax has anything to do with it 1 Link to comment Share on other sites More sharing options...
Wainy316 Posted July 2 Share Posted July 2 Is renting in Europe a different animal where everything isn't stacked in the favour of landlords? I know in Vienna for example, over 60% of the population live in some kind of social housing. Link to comment Share on other sites More sharing options...
bobzy Posted July 2 Share Posted July 2 26 minutes ago, markavfc40 said: My biggest issue with renting long term/for the whole of your adult life is that you have then spent a lifetime paying the equivalent of a mortgage but with nothing of your own at the end of it. The biggest asset I am almost certain to leave when I snuff it is my house which will eventually go to my children. Take that away and I'd simply be leaving a few quid and some possessions (a car etc). As @Geniehas said also with owning you are going to almost certainly get to a point where you have no mortgage, with a life time of renting you never reach that point of not having that expense. I'll be mortgage free in a couple of years and hopefully have a good 20-30 years without that expense. I couldn't imagine never reaching that point. Part of this thinking is based on how the UK operates, though. We don't have a similar rental market to European nations because we're ingrained to strive to own our properties outright. Renters here are therefore more at the behest of private landlords who, again, want to churn a lot of money because that's how it's done here. On the continent, from my understanding, there are far more rental co-operatives and not-for-profit renting enterprises in place so people aren't just getting screwed out of money. I'm sure I read somewhere fairly recently that the UK is now the worst country in Europe in terms of housing burden. There's a fancy term for it, but you're basically considered to have this burden where over 40% of disposable income gets spent on mortgage or rent. Around 25% of people in the UK are suffering in this manner, but in the German rental market it was something like 5%. People also forget how much their houses actually cost when these comparisons are discussed. i.e: I bought my house for £375k and that's the amount I'll use when calculating a comparison. However, there's another 30% or so in pure wasted interest that's going on top of that. 2 1 Link to comment Share on other sites More sharing options...
markavfc40 Posted July 2 Share Posted July 2 27 minutes ago, Demitri_C said: Not if inheritance tax has anything to do with it I've got no problem with still contributing to society/the collective pot after I'm gone mate as long as that money is being spent well and not as it has for much of the last 14 years and going into the wrong pockets, but that is for another topic 1 Link to comment Share on other sites More sharing options...
Demitri_C Posted July 2 Share Posted July 2 44 minutes ago, markavfc40 said: I've got no problem with still contributing to society/the collective pot after I'm gone mate as long as that money is being spent well and not as it has for much of the last 14 years and going into the wrong pockets, but that is for another topic Ha i agree. Its a very controversial subject 1 Link to comment Share on other sites More sharing options...
Xela Posted July 2 Share Posted July 2 5 hours ago, Demitri_C said: Yep there is risks on both parts. If it was choice of a stupidly high mortgage or renting id rent. They cabt take your house quick enough if fall behind on your mortgage if u fall behind as renter takes forever to evict you Sorry mate, not true. Its an absolute last resort to repossess. 2 Link to comment Share on other sites More sharing options...
VillaJ100 Posted July 2 Share Posted July 2 Had meeting with mortgage broker, passed the stress test and they made a mortgage offer we accepted. Now it's with the underwriter? I think and said it might take 4 weeks Link to comment Share on other sites More sharing options...
Xela Posted July 2 Share Posted July 2 2 hours ago, Rds1983 said: As I said, I own a house and I agree this is probably the best way to go about it. Just trying to figure out and guess why it might not be for other people and would love to hear the thoughts of people who do long term rent. I don't rent (I have done previously) but I did look briefly at selling my place and renting somewhere, on the basis that I could invest the equity and hopefully that would grow to a point when i retire that I could easily afford rent until I die. I did this as I have no kids therefore have no need to leave anything to anyone. Two things put me off. 1) The cost! The mortgage on my flat is £500. There are additional costs (service charge etc, upkeep), but to rent my flat, would be £1k or more. That is mad! 2) No security. If you rent, you could be asked to leave via a section 21. I don't want that level of uncertainty. Plus the price will go up every year. There was talk of new laws to protect renters and we need to see if Labour picks that up. So, my plans were quickly shelved. 3 Link to comment Share on other sites More sharing options...
chrisp65 Posted July 2 Share Posted July 2 Houses in my street are more expensive to rent than to buy. With one further critical difference, after the mortgage, the payments stop. I presume you pay rent until you die. Potentially, in theory, an extra 40 years of monthly payments in my case. Makes inheritance tax on the value over a third of a million look like a bit of a minor issue. 2 Link to comment Share on other sites More sharing options...
Genie Posted July 2 Share Posted July 2 23 minutes ago, VillaJ100 said: Had meeting with mortgage broker, passed the stress test and they made a mortgage offer we accepted. Now it's with the underwriter? I think and said it might take 4 weeks That’s a long time. Have you spoken to any lenders directly? I expect after running their checks they can make the full offer right away. Link to comment Share on other sites More sharing options...
Genie Posted July 2 Share Posted July 2 22 minutes ago, Xela said: Plus the price will go up every year This is a really important point ref renting versus buying. If you took out a £200k mortgage then that debt effectively gets cheaper and cheaper over the years due to inflation. Rent will keep going up with inflation plus demand. Link to comment Share on other sites More sharing options...
VillaJ100 Posted July 2 Share Posted July 2 9 minutes ago, Genie said: That’s a long time. Have you spoken to any lenders directly? I expect after running their checks they can make the full offer right away. Well they keep telling us to expect the whole process to take up to 16 weeks. They've sent a mortgage pack out with info. We are aiming to sell/buy same day so we can port the mortgage. 1 Link to comment Share on other sites More sharing options...
Demitri_C Posted July 2 Share Posted July 2 2 hours ago, Xela said: Sorry mate, not true. Its an absolute last resort to repossess. Ut was nore tongue and cheek I know its usually 5-12 months which isnt that long though 1 Link to comment Share on other sites More sharing options...
Demitri_C Posted July 2 Share Posted July 2 2 hours ago, Xela said: I don't rent (I have done previously) but I did look briefly at selling my place and renting somewhere, on the basis that I could invest the equity and hopefully that would grow to a point when i retire that I could easily afford rent until I die. I did this as I have no kids therefore have no need to leave anything to anyone. Two things put me off. 1) The cost! The mortgage on my flat is £500. There are additional costs (service charge etc, upkeep), but to rent my flat, would be £1k or more. That is mad! 2) No security. If you rent, you could be asked to leave via a section 21. I don't want that level of uncertainty. Plus the price will go up every year. There was talk of new laws to protect renters and we need to see if Labour picks that up. So, my plans were quickly shelved. The eviction process is very long even if you serve a section 21. If the tenant refuses to go you have a absolute nightmare process trying to get them out. Cost time and money Link to comment Share on other sites More sharing options...
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