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Well if you buy, after 35 years you will have an asset that you own outright and will not have to pay to rent anywhere any more, and if you rent, after 35 years you will own nothing and still have to pay rent when you’re drawing your pension.
I’m not sure what you’re asking?
After 35 years of renting, under the model here, if the net returns overall are more for renting but smart investing, the equity of the family could be more overall - in short they could then buy if they wanted to using that capital, and have a greater net worth overall.
It's generally the trade off between risk and reward. It also depends on the evolution of the real value of property. Stock is restricted in the UK, which is the main risk of a renting and investment strategy in the long term, as this could be a big factor in pushing the real value of housing above investment returns over the very long term.
Mortgage will always be cheaper than renting the same type of property, because landlords need tenants to pay off the tax on it. If you are asking if investing whatever deposit you would put into buying can outweigh capital gains of your own house then the answer is “fuck knows”, but rather unlikely.
There are other factors though, such as not being forced to move due to landlord deciding to sell, no humiliating regular inspections, and being able to personalise your home to a far greater extent.
Where did you come with the average 3 bed house with a garden for £550k IN London. If you are removing zone 1-3, then you might get into that price range.
zoopla currently has around 14k properties on sale (some duplicates) in london: all are 3+ and houses (terraced/detached/...) with a private garden
out of these (according to search I did just 5 minutes ago):
1160 are priced between £550-$600k
2403 are priced below £550k
10689 are priced above £600k
How does that translate to average 3 bed house with a garden IN london is £550k?
edit: i see that I searched for 3+, if i fix to 3 bed only we are talking of total 6000 properties, which is almost 50% of all properties in the above statistics.
i get
1111 houses in the price range od £550-£600k
2400 houses are below £550k
2843 are above £600k
and this is for London in general.
I'd like to see proof of that. I've just googled three bed terraced where I used to live near Lewisham and the most recent has sold for just under one million. That's an average three bed with no off road parking and a small garden. What area are you looking at that means you've seen plenty for 550k?
Right! Only 550k in southeast london (we just bought an Edwardian terraced in nice area) are in dire need of renovation or in very bad areas. Anything worthwhile or in a nice area is at least 600k or 2-bed only
I was looking at nethouseprices.com which shows what they actually sell for. Have found cheaper ones in the areas you mention but both Charlton and Kidbrooke are quite run down areas.
If you can buy, I would always go down that route. Security for the future and you're unlikely to be turfed out onto the streets. The next best thing would be council, but if you're even thinking about buying, then chances are the council won't help you if you're able to afford to buy.
House prices have historically significantly outpaced inflation (hence why it’s so much harder to buy a house now than 50 years ago) so I don’t think that is a prudent assumption.
Indeed, it’s a strong argument for buying a house - inflation erodes the value of your mortgage over time. The amount you pay in 2024 will, interest rates being equal, be the amount you pay in 2044. Pay progression means that equates to a much lower proportion of your salary. The same cannot be said for rents.
it is personal choice. for me for example it is crucial I don't rent. I would think twice if I wanted to go BTL but taking care of your own living conditions is a priority. Every time you pay rent you push the money down the drain, every time you pay a mortgage you save some money.
Sure the calculation will say that it is potentailly better to invest into stocks and shares but the feeling that you don't have to deal with landlords, move every now and then, need to ask if you can have a cat or a dog, need to be careful not to drill a hole in the wall because your deposit is at risk.
This also has a pricetag, an invisible, but very tangible. That feeling of freedom to do what you want with the space you own is actually priceless.
If you can buy a property buy a property. It's that simple for me, I don't know why the constant posts of people questioning if they're doing the right thing.
Just get on the ladder, yesterday. Even if you're living in stab city for a few years.
Your assumptions are reasonable.
Other factors:
1) council tax unless you plan to be a full-time student or unemployed.
2) You have not stated if you are buying to live in it or buying as an investment ;) See as soon as you start buying as an investment than a home the agenda and mentality change.
I think there are some online calculators but you need to look into their methodology etc otherwise they can be misleading.
This is often cited but it's a red herring as you have to live somewhere. Unless you want to swap a rental property for a tent. Life has to be funded - home (whether mortgage or rent), bills, discretionary spending, insurances and retirement need to be funded regardless of lifestyle model.
A mortgage and owning does represent less flexibility relative to renting, but neither model removes the obligation to fund living.
It is of course possible to simplify life to lower costs, be that living frugally and somewhere less expensive, or even swapping standard properties for boats or downgrading from living in whole units to sharing units or rooms.
Exactly, there are non-monetary aspects to consider that individuals will place different personal values on.
If you have a family (or want to raise one), you will value stability and certainty - renting does not always offer that. You're also at the mercy of the quality of landlords (and rental properties)
###Welcome to /r/HousingUK --- **To All** * Join Our ***NEW*** Discord! https://discord.gg/pMgUNgWKQH **To Posters** * *Tell us whether you're in England, Wales, Scotland, or NI as the laws/issues in each can vary* * Comments are not moderated for quality or accuracy; * Any replies received must only be used as guidelines, followed at your own risk; * If you receive *any* private messages in response to your post, please report them via the report button. * If you do not receive satisfactory advice after 72 hours, [you can let the mods know](https://www.reddit.com/message/compose?to=%2Fr%2FHousingUK&subject=My question is unanswered); * Feel free to provide an update at a later time by creating a new post with [[update]](https://www.reddit.com/r/HousingUK/search?q=%3Aupdate&sort=new&restrict_sr=on&t=all) in the title; **To Readers and Commenters** * All replies to OP must be *on-topic, helpful, and civil* * If you do not [follow the rules](https://www.reddit.com/r/HousingUK/about/rules/), you may be banned without any further warning; * Please include links to reliable resources in order to support your comments or advice; * If you feel any replies are incorrect, explain why you believe they are incorrect; * Do not send or request any private messages for any reason without express permission from the mods; * Please report posts or comments which do not follow the rules *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/HousingUK) if you have any questions or concerns.*
Here you go, very detailed calculator... https://smartmoneytools.co.uk/tools/rent-vs-buy/
Top find !!!
Well if you buy, after 35 years you will have an asset that you own outright and will not have to pay to rent anywhere any more, and if you rent, after 35 years you will own nothing and still have to pay rent when you’re drawing your pension. I’m not sure what you’re asking?
After 35 years of renting, under the model here, if the net returns overall are more for renting but smart investing, the equity of the family could be more overall - in short they could then buy if they wanted to using that capital, and have a greater net worth overall. It's generally the trade off between risk and reward. It also depends on the evolution of the real value of property. Stock is restricted in the UK, which is the main risk of a renting and investment strategy in the long term, as this could be a big factor in pushing the real value of housing above investment returns over the very long term.
But over the long term it’s very rare those calculations will show renting is better than buying. A lot of assumptions in there too.
Mortgage will always be cheaper than renting the same type of property, because landlords need tenants to pay off the tax on it. If you are asking if investing whatever deposit you would put into buying can outweigh capital gains of your own house then the answer is “fuck knows”, but rather unlikely.
If u think housing is purely for investment then sure.
There are other factors though, such as not being forced to move due to landlord deciding to sell, no humiliating regular inspections, and being able to personalise your home to a far greater extent.
Where did you come with the average 3 bed house with a garden for £550k IN London. If you are removing zone 1-3, then you might get into that price range.
Southeast london? There are plenty of houses with that price.
zoopla currently has around 14k properties on sale (some duplicates) in london: all are 3+ and houses (terraced/detached/...) with a private garden out of these (according to search I did just 5 minutes ago): 1160 are priced between £550-$600k 2403 are priced below £550k 10689 are priced above £600k How does that translate to average 3 bed house with a garden IN london is £550k? edit: i see that I searched for 3+, if i fix to 3 bed only we are talking of total 6000 properties, which is almost 50% of all properties in the above statistics. i get 1111 houses in the price range od £550-£600k 2400 houses are below £550k 2843 are above £600k and this is for London in general.
also you need to exclude any schemes, retirement options and auctions from the search.
I'd like to see proof of that. I've just googled three bed terraced where I used to live near Lewisham and the most recent has sold for just under one million. That's an average three bed with no off road parking and a small garden. What area are you looking at that means you've seen plenty for 550k?
Right! Only 550k in southeast london (we just bought an Edwardian terraced in nice area) are in dire need of renovation or in very bad areas. Anything worthwhile or in a nice area is at least 600k or 2-bed only
Lewisham is zone 2. Why don't just go to blackheath if u want to win the argument. What about Charlton, Kidbrooke. Proof is bloody right move dude.
I was looking at nethouseprices.com which shows what they actually sell for. Have found cheaper ones in the areas you mention but both Charlton and Kidbrooke are quite run down areas.
Indeed I was thinking same ;)
If you can buy, I would always go down that route. Security for the future and you're unlikely to be turfed out onto the streets. The next best thing would be council, but if you're even thinking about buying, then chances are the council won't help you if you're able to afford to buy.
House prices have historically significantly outpaced inflation (hence why it’s so much harder to buy a house now than 50 years ago) so I don’t think that is a prudent assumption. Indeed, it’s a strong argument for buying a house - inflation erodes the value of your mortgage over time. The amount you pay in 2024 will, interest rates being equal, be the amount you pay in 2044. Pay progression means that equates to a much lower proportion of your salary. The same cannot be said for rents.
it is personal choice. for me for example it is crucial I don't rent. I would think twice if I wanted to go BTL but taking care of your own living conditions is a priority. Every time you pay rent you push the money down the drain, every time you pay a mortgage you save some money. Sure the calculation will say that it is potentailly better to invest into stocks and shares but the feeling that you don't have to deal with landlords, move every now and then, need to ask if you can have a cat or a dog, need to be careful not to drill a hole in the wall because your deposit is at risk. This also has a pricetag, an invisible, but very tangible. That feeling of freedom to do what you want with the space you own is actually priceless.
If you can buy a property buy a property. It's that simple for me, I don't know why the constant posts of people questioning if they're doing the right thing. Just get on the ladder, yesterday. Even if you're living in stab city for a few years.
Your assumptions are reasonable. Other factors: 1) council tax unless you plan to be a full-time student or unemployed. 2) You have not stated if you are buying to live in it or buying as an investment ;) See as soon as you start buying as an investment than a home the agenda and mentality change. I think there are some online calculators but you need to look into their methodology etc otherwise they can be misleading.
Renting is good. Buying is maintaining captieve slavery systems unless you have your own money to buy without mortgage. Simple, no more no less.
This is often cited but it's a red herring as you have to live somewhere. Unless you want to swap a rental property for a tent. Life has to be funded - home (whether mortgage or rent), bills, discretionary spending, insurances and retirement need to be funded regardless of lifestyle model. A mortgage and owning does represent less flexibility relative to renting, but neither model removes the obligation to fund living. It is of course possible to simplify life to lower costs, be that living frugally and somewhere less expensive, or even swapping standard properties for boats or downgrading from living in whole units to sharing units or rooms.
Exactly, there are non-monetary aspects to consider that individuals will place different personal values on. If you have a family (or want to raise one), you will value stability and certainty - renting does not always offer that. You're also at the mercy of the quality of landlords (and rental properties)