Owning your own home

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

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’

Ah, ok, apparently he used to own a place in Girona.

There are loads of pros living in Girona - our own @taogeogheganhart for one - and they all seem to love it (I've not been). A lot of them are Brits though so maybe not the place to go if you want to get away from British people. If you do maybe consider Pamplona where Hugh Carthy went.

This is what I'm getting at.

The idea of:

Live in a place for 25 years, you own it.
Live in a place for 25 years, you dont own it.

assumes a number of things, but most of it can be sumarised as;

the capital value of the property will always be greater than the total costs associated with purchasing and owning it.

Think about the cost of purchase, moving, decorating, repair, maintainance, replacement of white goods, insurance, etc. It is only an extraordinary property market which keeps prices inflating at such a level that all these cost are eaten up. In addition, you as the owner have to sort all that shit out.

I know, there's tonnes of Aussie pros there too. It's been a big draw for English speaking pros for years now. When I'm talking about keeping away from Brits, I'm just talking about the spherical red ones rolling from the 2EU fry-up down the road to the Black Lamb for 2EU pints on their holidays.

At this rent Vs buy discussion.
The point of buying is some cunt of a landlord in their jeansandsheux and £1400 a month rent and increase it when the fuck they like and turf you out you oik, can't turf you out. It's generally cheaper than renting, and not having to move every 6-12 months, and allows (probably) the option of planning a life rather than living some weird existence.

Rent is generally more than mortgage.
For instance, my last place was 950 mortgage but was rented for a bit at 1400 odd.
So options are...
Pay more to not own a place or pay less and own a place, regardless of prices going up or even down.
If you need a better example, get £1500 pounds in cash and give it to a random stranger in the street, take another £1500 pounds in cash and pop it in your back pocket.
Guess which is renting and which one is buying in that metaphor.
BTLs are only profitable if you have a large amount of cash as mortgage repayments are no longer taken into account on tax on earnings, so if you get £1500 rent but have a £1500 mortgage you’ll actually be down each month. I assume folks with two properties are higher earners meaning you’ll be in the higher tax bracket so down near £700 a month.
Unless I’ve missed something? I’m usually pretty bad at this kinda thing...

Agreed, to an extent.

I think the other UK issue though is the short tenancies and lack of security. I bought because I was sick of moving from place to place. The increase in value was a bonus.

Of course. But if you are able to get a long term lease with known % rent increases and aren't in a hyper competitive market like London, then it's different.

I'd be surprised if there is anyone in this thread who's UK mortgage (even with costs inc.) is greater or equal to the cost of renting their UK home.

The state of the UK market doesn't apply everywhere - in NYC for eg, dispite competition and amazing mortgage rates, the cost of property taxes (and probably building MGMT charges) mean buying isn't the same no-brainer it is in London.

I guess my overall thinking was based on what hippy has said here previously, he owns or is close to owning his UK property outright. Renting that out would likely net a better return than selling and buying in Spain. Even if that's the plan and in addition he has the cash to purchase most of a residential property in Spain, I'd still buy in another country and rent in Spain.

There are emotional things that need to be added to your model here, owning, passing on to family, having something.
With stuff like this, I think the emotional/non rational thoughts have equal/more weight than rational numbers.
No one likes being in debt (simplistically).

Also: known % rent increases over the course of the rent?
I don't know whether to out lolocopter or lolobrothel here.

Loads rent in Europe because the numbers add up consistently, long term.

With stuff like this, I think the emotional/non rational thoughts have equal/more weight than rational numbers.

Yes but in matters of significant amounts of money you need to put the emotional stuff back in its box

My mortgage is £500/month, the cost of renting the place would be ~£1,500/month.

Service charge however is over three grand per year and we have a section 20 this year for just under four grand.

I’ve also put a lot of time and money into getting got flat into its current condition.

We paid £190,000 and it’s now worth £450,000 or so, which does impact on the above.

However, the “its the home we wanted” does trump the financial aspect, as if we rented we’d never have found anywhere similar.

#micdrop

Yeah well, if you like this communist vibe you can go and move there after Brexit. Yeah? And take your fucking enlightened attitude to people living free of the man elsewhere. This is the hard capital of London my friend.

Losers >>>>>>>

Also opportunity cost of having capital tied up in bricks.

BUT nobody is saying renting is a great idea in the UK for the most part; there’s a reason why people are desperate to buy here because unless you have shitloads of cash and just do not care renting is too expensive.

In bits of Europe not so much if not the opposite.

I'd be surprised if there is anyone in this thread who's UK mortgage (even with costs inc.) is greater or equal to the cost of renting their UK home.

Yes, but that's only because I have a significant chunk of equity in the place to lessen the monthly mortgage payments.

If I was starting from scratch with no equity then there's no way I could afford to buy the flat (except with an enormous deposit), but I could afford to rent it.

(Rebasing the figures to a nominal £1k/month rent that £1k/month would stretch to a £236k mortgage at 2% and 25 years. Last valuation of the flat was (rebased) ~£370k.)

I'm not so sure, I think I'm probably around the even mark if not paying more for mortgage.

Mortgage is slightly over 1300, and I don't think a 1 bedroom flat in Dulwich rents for that much (1100-1300 on a quick look at Rightmove).

Run the numbers

https://www.khanacademy.org/downloads/buyrent.xls

The PV of buying is greater than that for renting in most scenarios

I guess my overall thinking was based on what hippy has said here previously, he owns or is close to owning his UK property outright. Renting that out would likely net a better return than selling and buying in Spain. Even if that's the plan and in addition he has the cash to purchase most of a residential property in Spain, I'd still buy in another country and rent in Spain.

Paid in full.

Probably. No chance I'm selling the UK place to fund the Spanish place. I'll do what I did here and buy conservatively. It'd make much more sense to rent this place out and move to Spain. If Spain goes tits up I could return or move elsewhere and still have rental income if I need to change jobs.

I think mortgage on this was around 650/month, I was overpaying to 1100 month plus some big lump sums to get it paid off quickly. Rental from this place would probably be 1100+ but I live here so don't really pay attention to rental market.

I'd be surprised if there is anyone in this thread who's UK mortgage (even with costs inc.) is greater or equal to the cost of renting their UK home.

Just wrote a longer post but deleted it accidentally. Ran the sums on my purchase in Oval 5 years ago.

Flat today is worth probably what I paid plus stamp duty (so net zero). Mortgage interest and service charges of £1k / month versus rent of £1.5k / month. So there’s a £30k gap over 5 years.

I could well believe that the foregone investment income on my deposit (say 5-6% a year equity risk for 5 years) plus maintenance costs are equal to the £30k I saved in rent.

This appeals to me / us

https://www.taylorwimpey.co.uk/find-your-home/england/london/stratford/chobham-manor/the-moselle-b-template

Pros

• new build house, should be efficient and properly wired / arranged for modern living
  
• ,so no need to do anything with it before moving in
  
• car port thing to put e cargo bike and camper van, get straight to the fucking golf thread
  
• terrace/s
  
• lots of interesting stuff nearby
  
• I know the general area well, have family in Hackney
  
• access to La France via Stratford Int.
  
  

Cons

• Freehold but assume has some awful conditions attached
  
• Obvs couldn't extend / change that much if at all
  
• No idea about services in the area
  
• Build might be shit, warranties not worth the paper they are on
  
• Community might be completely missing and / or rubbish
  
• access to Europe might be revoked
  
  

Anything I've missed, other than north [edit: of the river] London being a fucking hell hole?

other than north London being a fucking hell hole?

Stratford counts as east London.

Right by the Olympic Park, which is nice.

John Lewis and Waitrose down the road in Westfield, for all of your golf thread related requirements.

Depreciation on new builds?
Eurostar doesn't stop at Stratford?

And yes, that's not North London, it's East London which is the best London.

Seems like an aweful lot of money for what it is...that said there is always a new build premium.