You are reading a single comment by @aggi and its replies.
Click here to read the full conversation.
-
The main difference is that there are differences in if you're renting or owning. Generally the interest is higher and the rental income is taxed. As such, the two scenarios can't be compared without adjusting for that
aggi-
That’s certainly true, although most people could invest their house deposit tax free using their ISA allowance, and landlords benefit from interest and expenses deductibility.
I suppose the broader point I’m making is that because UK property has been a magic money tree for 30+ years, people have stopped thinking critically about the rent vs buy dynamic in the rush to get on the ‘ladder’
NickCJ
I was going off the premise in the previous post that ‘BTLs are no longer profitable’. If that’s true (and it could be), it implies that the rent doesn’t compensate for interest, maintenance, insurance letting agents, stamp duty and so on.
In that case, renting would be a better choice than buying, setting aside the soft factors like security of tenure, decorating it how you want etc etc.
Mathematically it doesn’t make a difference whether it’s your first house or your tenth - the imputed rent versus return on capital discussion is the same.