Money-Saving Tips from Tibs and Shell

[Fidel_Castronaut]

I'm with you, operator. Tibs and I have been talking about home ownership, but it was never something I was interested in because of the size of the purchase and the implications. Staying still for the rest of my life? No fucking way. I've ready plenty of financial advice that actually says it's cheaper to rent in the long run if you plan on moving a lot. The cost of selling house every time you move is too high to balance it out. I'm considering it more now because staying still doesn't sound so bad on a big old farmhouse with Tibs. Still freaks me the fuck out.

In the UK it's the opposite. Depending on your deposit and Loan to value, owning is almost always cheaper. Factor in further that houses as assets, due to fortuitous or unfortunate circumstances of lack of housing stock (depending on which side of the fence you sit in) and much higher demand means that house prices trend up almost regardless of what and where you buy.

An example, my fiancé and I recently bought a home with an LTV of 30%, our mortgage repayments each month are around £500. Factor in insurance, maintenance, and other such direct costs that relate to the upkeep of the property and it still falls short of our current rent in our flat which is £750 (the house is 3 bedrooms, the flat is only 1). Indeed based on property price inflation alone we've probably made a 6% profit already just having bought the place and waited a few months to move in.  

The hardest part is saving the deposit. We were lucky in that we invested in years past with money given to us by family or deceased relatives. I recognise that for most that's not possible. But if you can buy (in the UK), consider the cost benefit relative to renting. You'll come out with more equity if you stay longer than say 5 years with you having paid of some of your mortgage (mortgage payments always pay off interest in the first few years rather than the loan value itself) combined with the predicted increase in your house value (subject to cautions such as price and location and your over all debts to assets, liquidity of those assets and so forth). Plus if you care about things such as legacy for children (I don't) you have an asset to pass down when you pop your clogs.

If you do plan on moving a lot then factor in average agent and conveyancing fees plus taxes such as stamp duty. Average house price in the UK is around £207k (inflated due to London prices which really should be factored out as they are ridiculous l). Average fees and taxes on that are probably going to fall around £4/5k. So that's a lot if you move every few years and you'll probably just break even if you have a modest LTV or live in an area where growth is also modest.