1. Home
  2. UK Finance Discussions
  3. Renting the 'in' thing to do... read it in one of those free papers...

Renting the 'in' thing to do... read it in one of those free papers...

This Sunday I picked up a copy of one of those free papers in the London Underground. I forgot the exact name but it focuses on finance and savings advice for the rest of us, that kind of thing.

Well anyway what caught my attention was an article about how renting is actually quite a smart thing to do, from everything like TVs to microwaves and obviously, family houses.

The article goes on about how it's almost considered 'dirty' to rent anything, well at least in the UK and N.America. I must say that indeed, when I have been renting something even as small as a studio in Watford, then Blackheath, then San Francisco, each and everytime I found someone to advise me that I was 'throwing money by the bloody/frigging window'.

So now I look back on all those 'money throwing' experience and in fact I am quite happy I rented. First, my salary went up, and it was easy for me to go from one place to another (better) one. Second, I didn't have to freak out about potential market crashes, invalid evaluation of the house price, and other rat infestations/rain leaks.

Which begs the question, in your infinite wisdom, do you think it's better to rent or to buy in the current UK (London) climate? I'm talking renting a family, semi detached 3BR in say, SE london (lewisham, that sort of thing).

Cheers,

Michel (who really loves this group)

Reply to
m.cantaloupe
Loading thread data ...

Hmmm, seems to me they're conflating unrelated things here.

It may be worth renting a home, if you can take the hassles of agents' inspections, rent deposits and so on. The hope is that, whilst you're paying the landlord's mortgage for them right now, you can wait for house prices to settle, and for interest rates to start downwards again, and save yourself a bundle against negative equity. unlike your hapless landlord.

For white and brown goods, though, it's way cheaper to buy outright, particularly if you buy second-hand from a reliable source.

Given that there are a lot of imponderables in the housing market at the moment (will price rises slow, will prices plateau out, or will they actually fall?; what's to happen with interest rates?; which areas will continue to appreciate, and which will tank?), there's no clear answer that I can see.

My advice (and I'm no better informed than anyone else) is: look at your lifestyle. Decide what's important to you.

If investing in bricks and mortar, to give yourself a permanent (or semi-permanent) residence that you own and can do with as you wish is important to you, or if you don't like the loss of privacy that comes with agent inspections, or living in someone else's house, perhaps you should favour buying. But try to avoid negative equity, if possible. If you have a decent-sized deposit (say 20%), so that you can take lower capital in a mortgage, that's good. Personally, I wouldn't take a 95%+ mortgage in the present climate.

If, on the other hand, you are footloose and fancy-free, and want to have the freedom to move somewhere else at a month's notice (contract terms permitting), and/or don't want to be bothered with furnishing and equipping your home, then renting's probably more your scene.

But don't, fercrissakes, look at it as an appreciating investment. There are too many risk factors right now, IMHO, and the proof is this: ask three "experts", and you'll get four opinions. At least. Without an informed consensus on market conditions from people who should know their subject, how can anyone else possibly second-guess the future?

Jon

Reply to
Jon S Green

If I was working in London, I would certainly rent a house. In areas of lower prices I would buy. At the end of the day you have to look at the figures and make your own decision as to what is better value. It is certainly nicer to live in a house you own as you are free to spend time and money keeping it as you want.

As for renting a microwave, that is ridiculous. Our current microwave cost

2 from an auction. Even without finding a bargain like this, the cost of a new "made in China" model is such that it will "pay for itself" in a few months.
Reply to
dp

Cheers for the great answers. By the way I looked up the source and it's a free supplement to the Observer called 'Cash'.

Reply to
m.cantaloupe

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.