Comment by jamescun | Hacker News Reader

Comment by jamescun | Hacker News Reader

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For me, wanting to buy is not about an investment. I want somewhere secure and stable to live. The "dead money" aspect of rent versus a mortgage is just a bonus.

It must seem alien to most in the west the sheer lack of protection renters have in England (property law is devolved); it is based entirely in private contracts, and what law does exist is rarely if ever enforced. Just last week Parliament rejected an amendment requiring all rented property be "fit for human habitation". Rent rises are not capped and often used to evict tenants, the legal minimum notice for eviction is two weeks (this does not increase with time rented), the landlord is required to carry out repairs but notifying them of such can be grounds for eviction.

These may be the extremes of renting in England; however you can ask any renter about being charged outrageous contract fees, referencing fees and being screwed over on leaving over the deposit and "cleaning fees" (even when the property is left in a professionally cleaned state). There is little-to-no repeat custom in renting so they get away with it.

Little movement has come from either of the two main parties (Labour & Conservatives) to improve this, thus to have stable accommodation you have to look to buying.

This.

I rented for nearly ten years, latterly/mostly in East London, moving house on average every 12 months. Had my fair share of shitty landlords.

Me & my girlfriend had circumstance/luck to thank; in 2012 (just before prices started climbing skywards again) we managed to save/borrow/scrape enough money together to get a deposit on a nearly derelict Victorian terrace and have been slowly doing it up since then. It's still not finished but it's mine and I love it. That it's increased in value is nice, but kind of abstract in that it's only money I will see if I ever decide to move, which I have no plans to. It's also totally secondary to it being _my_ home. I shut the door and the outside world ceases to exist.

I've lived in London for nearly two years and can't wait until I can buy my own place. Not having to deal with landlords and moving would be enough reason.

That article glossed over inflation, rents have changed a great deal in the last 10 years (double digit growth year on year). A mortgage is a fixed cost, the will actually become relatively smaller.

Plus, I doubt I will be in London for ever, but if and when I decide to leave I would have accumulated a nice a nest egg.

That's your house, you disconnect the cable and turn the lights out ;-)

Well said btw. Right there with you.

It does seem odd to me (in the US). Renting here is not without risk and slum lords and rising rents, but there is a minimum expectation of consumer protection, much in the same way there is with most transactions.

Either way, if you care to live anywhere near a city, housing prices are astronomical. We make a decent living, my wife and I, but still don't have what it takes to buy a two bedroom apartment in one of the cheaper cities in the country. We've been house poor before, and I'd rather not be again.

I mean I get it - fixed mortgage means in 10-15 years my mortgage may be less than rent of something similar, but that's a long time to be house poor.

Honest question: Is your credit bad?

Even adding in PMI, property taxes, a 30 year rate, etc, the mortgage of house should be about the same, and often less than the rent unless you just can't get a good rate. A landlord has to make money, including the costs of longterm upkeep, replacing things like the air conditioner, paying real estate agents their commission, etc.

If you can't make a 20% down payment I've seen PMI be enough to push it to a bit over what the rent would be at the house, but that certainly shouldn't take you 10-15 years to pay off and get out of PMI range.

The only thing I can figure is you have a significantly higher interest rate than people would get in the 'average credit' category

About the only places where I've ever seen this not be true is where rent control is in effect.

Ha, no, my credit is stellar. But I live in a nice neighborhood of Philadelphia. My 1000 sq ft 2 br apartment costs $2300/m in rent. (I'm aware it's a lot cheaper in other neighborhoods, but I love living here.)

To buy my apartment (and this is just for the apples-to-apples comparison) would cost in the neighborhood of $485,000. If I put $97,000 down (about 20% to avoid PMI) I'm looking at around $2350 inclusive of taxes. However, there's HOA fees. Here they cover all (yes ALL) utilities, but they're $890/month for this apartment. Now I'm out $97,000 in liquid cash, my monthly payment is $3240 inclusive of HOA.

I can easily get the loan, but in the city, it's not always cheaper to buy.

I'm not familiar with HOAs. You pay them, they pay your utilities? How much are the HOA and utilities worth when they are apart?

I imagine the arrangements vary on whether utilities are included as part of homeowner dues. The cost of utilities will also vary a lot depending on the climate and your type of heat etc. In my case (house in Northeast without central air), oil/electricity/water/propane average out to the $300ish/month range.

You pay the HOA, they pay for maintenance of common areas.

Hmm. Gotcha. I didn't take into account utilities being paid for - that can certainly be a pretty massive difference.

I think the 20% number is a misnomer. It's a good number to have, but I think you can get away with less. I have good credit, not super great, but good. I have some student loan debt. I have some credit card debt. However I was still only required to put down $10,000 with an interest rate of 3% to get my home. For me, when I added up mortgage, interest, insurance, and basic bills, it was still less than living in An apartment.

20% is the number required to avoid having to pay PMI

> in 10-15 years

In many parts of the UK it's closer to 5-10 years. Which is great if you can afford the high price of entry.

Also great if you can afford a buy-to-let mortgage, because it means you can be profitable within a much shorter time, while containing the supply of purchasable housing and raising the average rental price...

I just bought a house for the first time last year. The value of my house is already more than what I paid for it. At the moment, I'm spending less including all of my bills and I ever did on the apartment. Furthermore, in five years, I can dispense with mortgage insurance (a requirement for the mortgage) and lower that monthly payment even more. I say all of this because I challenge your assumption that you cannot afford a mortgage. My house was $215,000, and I only had to put down about $10,000 to buy. I understand that everyone's financial situation is different, but I encourage you to speak to a mortgage company and find out precisely what it would take to get your own home.

Just when I think I have the perfect response to an article, I find someone has already said it better. I think the Brits have come to their senses on homeownership better than many Americans.

This makes it sounds classist -- almost as if the renting class don't deserve protections. I would have assumed renters in the US would be treated worse.

They are!!! Especially in the larger cities. In fact, in some ways I think landlords and apartment companies raise rents deliberately to push certain classes of people out. In the last apartment complex I live at before I purchased my house, there were numerous restrictions on how many people you could have over, how long a guest could stay at your apartment, even how long your car could take up a parking space. We were spied on, constantly monitored, and we were always under the threat of an exorbitant rent increase. It was not unheard of for someone to get a $300 Per month increase in the rent when they went to renegotiate their lease. This was an upper-class, "nice" complex. I can't imagine what it's like for low income people. Living in an apartment is awful, and you are absolutely at the whims of corporations and landlords.

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