Well, yes, obviously

The problem that Britain has, partly as a result of cultural and governmental promotion of ownership, is that renting is, objectively speaking, second best. You can currently pay more in rent than an owner would in mortgage interest

The owner has to finance and then also maintain, doesn’t she?

18 comments on “Well, yes, obviously

  1. There is also the risk that the person you rent to will trash your place.

    More and more common these days.

  2. Owner has to pay the deposit, finance at buy-to-let rather than owner-occupation rates, maintain, and take on various risks (trashing the place, renter leaving and it standing empty, non-payment / squatting).

    Surely this is obvious?

  3. Completely off topic, but I see on the BBC that Emma Watson has donated £1m to something called the UK Justice and Equality Fund, which is a campaigning group on sexual harassment. As this does not appear to be a charity, and is not a registered political party, I assume she will be receiving a big inheritance tax bill from HMRC in due course, just as those donors to the Brexit campaign did?

  4. ‘If this sounds dangerously socialist to some’

    You have an education problem. It should sound dangerously socialist to everyone.

  5. If the property market is flat – no expected increase in capital values – then rent *should* be higher than mortgage interest, not least because the rent has to reimburse equity investment as well as cover mortgage interest.

  6. Prior to purchasing the current homestead, I rented for five years. Best years of my life: no broken boiler, leaky roof, replacement bathroom, blah, blah, blah. I just rang the landlord and he fixed things. I accept that with ownership there’s an expectation of capital appreciation, but there are times when you can’t be arsed and would welcome someone prepared to shoulder the hassle. There’s the freedom thing: waking up one morning and deciding it’s time for a change – simply handing over the keys and buggering off.

  7. There’s the freedom thing: waking up one morning and deciding it’s time for a change – simply handing over the keys and buggering off.

    Yes, this is what made emigrating so easy for me. Three months’ notice and then bye bye. A lot easier than selling a house or trying to rent it out.

    Plus, renting can often get you into a nicer flat than you could afford to buy. If you’re only in a place a short time, why not just rent a nice place instead of buying a crap one?

  8. A number of my very nice neighbours rent their homes because there’s no way they could buy them – inhabit a lifestyle they can’t really afford, due to the inflated cost of local housing.

  9. I would say it suits both parties. However in truth the renters would like to buy and the owners to sell. Unfortunately there are significant differences when it comes to values.

  10. I’d say one of the biggest advantages to renting is that it enables one to deploy the capital, that would otherwise be tied up, where & when it secures the greatest advantage. Having it locked up in where one might choose to live is far from optimal.

  11. “You can currently pay more in rent than an owner would in mortgage interest ”

    Well, DUH!!!! Of course you can, because rent = mortgage interest plus mortgage capital plus repairs plus maintainance plus insurance plus plus plus plus plus. Unless all of those are negative, pure mathematics FORCES rent to be more than mortgage interest.

  12. Hasn’t anyone considered the case that the renter can’t get hold of the money for the deposit needed to buy?

  13. If renting is s bad why is it that the two richest and most stable european economies, Germany and Switzerland, have the lowest home ownership rates?

  14. ‘The problem that Britain has, partly as a result of cultural and governmental promotion of ownership’

    The government should not be involved with the promotion of home ownership. Not their job.

  15. If renting is so terrible, why does almost everyone in Mayfair do it? Poor, vulnerable, young people like Diana Spencer (OK, she moved out into Kensington after she got married) and other Sloanes…

  16. @Tim Worstall

    The owner has to finance and then also maintain, doesn’t she?

    Yep, and insure building & public liability.

    .
    The Big Secret Timebomb : H/T BBC R4 Moneybox 10 Feb 2018

    From 5 April 2018 homeowners who are New and Existing [ie Retrospective Law] unemployed, disabled, ill will receive zero from DWP towards housing costs*, they will have to borrow or become homeless.

    Renters will continue to have rent paid (housing benefit).

    * Maximum currently: interest on first £100,000 or £200,000 of mortgage dependent on purchase date after 6 or 12 month no payment; duration & other restrictions apply. Both payments are less than half the cost of housing benefit, plus owner still has to cover costs mentioned above.

    .
    Gov’t: “Buy a home we help: Help to Buy, Stamp Duty, Cheap Loans.

    Small print: if made redundant, disabled, terminally ill we won’t help. Rent and we will.”

    .
    PM May “…help the just about managing…” – she’s a liar

  17. There is an additional cost to renting equal to the discounted value of future rents (less maintenance) after the mortgage would have been paid off. Or put another way, all else being equal, a serial renter will need a bigger pension than a house owner.

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