Where to live

[Pumpkin&Piglet]

If I rent a house my whole life where will I live when I'm retired?

My understanding is you buy a house with a mortgage and you pay of the mortgage before you retire and so in your retirement the biggest expensive being (your mortgage) has gone and you can live on your pension which is less than your earnings were.

We rent privately as we cannot at the moment get a mortgage to buy a house. I have been perfectly happy with this, prioritising being happy, spending time with my family etc above earning money to save up for a deposit to buy a house I don't want and to pay for all the legal fees for things I don't understand.

I don't work I stay at home with my children and when they are old enough to go to school I don't plan to work as I would like to home school them. My husband works hard and we live comfortably on his salary but it's still one persons salary providing for a family - not much left over for saving up.

I wonder if I have a responsibility to plan for the future a little more, spend less on days out and experiences for us, perhaps get a job, consider myself unable to home school the children as we are not in the position to have me not working

Does anyone have anything I perhaps am not taking into consideration?

[Thomzo]

Hi P&P
Consider what position you'll be in when you retire. What is your pension likely to be? The current state pensions are set out on the Direct.gov.uk website and depend on your circumstances. Will you be able to pay your rent out of it? But then would you need to rent the same sized house when the children have grown up and left home? You should find that you have some spare cash once the children are at work. Perhaps you can consider going back to work at that point?

At the moment, I think the main priority for most people is to keep out of debt, live within your means, keep healthy and enjoy life but if you can put a few pounds away for a rainy day it wouldn't hurt either.

Does your husband's job provide a pension? If it does then you can add that on top of the state pension.

Zoe

[dustydave]

The concept of buying a house and that the rise in house prices would offset the cost of interest on the loan and the costs of repair doesn’t look like such a good model as it has done over the last decade. There are uncertain times ahead and property prices have always been pretty much in line with the acceleration or deceleration of lending, at the moment the availability of lending is rapidly decelerating (off a cliff). Others have different views, but one thing I do know is that when everyone runs to one side of the ship it is a good idea to go to the other side.

If I was in your position I would try not to think too far ahead. Take your time. Let house prices unravel for a decade. We have had a recent past that was obsessed with money to such an extent that I think that future generations will be sickened by the debt that we ‘all’ took on (whether we wanted it or not) and turn away from the worship of property greed. I wouldn’t worry about anything other than a state pension. We have a demographic situation whereby any money that you pay into a non state pension will be sucked in to pay out to pay out current pension commitments - it’s all like some dodgy pyramid selling scheme.

Enjoy home educating

[oldjerry]

What a question,The ONLY reason I'm glad I'm no longer young .I agree with all the above.A number of people of a certain age may have secured their financial future based on rising property prices,but now?.. Once, if you rented unfurnished you had security as long as you paid the rent,but that's all history,as well as most council provision.For me,I will be advising my kids,as soon as they come of age,to get themselves on a Housing Assoc. list,it may take years,but at least it's secure,meanwhile I guess our place will just be a bit crowded.

[Green Aura]

How times have changed, eh? It used to be that mortgage repayments were often cheaper than private rents (although that may still be the case in some areas I suppose). So it just seemed fairly obvious, back then, that if you could scrape together a smallish deposit (or there were 100% mortgages ) then you could buy a smallish house, which you sold to move into a slightly bigger one, when you had kids and maybe sold and moved back into a smaller one when they left home.

Then the bubble (that recently burst leading to the sh1t we're all in now) started. I remember a friends younger sister, in her first job after training, age 23, buying a 5 bedroom house with several bathrooms and a massive garden. I remember thinking at the time that they had nothing left to aspire to. Or maybe they desired things I couldn't even imagine

But now, I don't know how to advise. You can't get permanent Council housing any more (and I don't know if that includes Housing Associations too). Tenants have fewer rights these days but buying is just not an option for so many people, either because the banks have raised the bar for lending so high, or just the sheer price of properties, especially down south. I don't know if two partners working is better, or staying at home to raise the kids is even an option.

I'm just glad we have a little place we can leave to our gal (just the one fortunately) so at least she'll have the option of a roof over her head when we go, a possible means of earning a crust and growing some of her own food. She'd stand no chance otherwise (although hopefully she's going to have to wait a while ).

Unless you wantto run a small rural bakery - I know where there's one of those going cheap!

[gregorach]

It's a tricky question alright... I certainly wouldn't be in a big hurry to buy at the moment, as I think the market's still headed down. Getting some money in the bank is never a bad idea though, if you can.

[ajs88]

My dads on a state pension and has always rented privately, since retiring his rent has been paid through a mix of housing benefits and pension credits.

However when he went to move last, due to the landlord selling, he found it very very difficult to find somewhere to rent as none of the estate agents would consider a non-working tenant. Also if your on housing benefits you have to find somewhere below the cap which, in London at least, is the very minimum price for a one bed flat in that area (and often poor quality eg. cold).

If you can save a deposit and buy a place it would be great, i'm sure you imagine yourself having a veg patch in the garden and a guest room for the grandkid etc.

However be aware that you will only get a mortgage for apx 3.8x his income, it has to be a permeant job and in it for at least a couple of years and only for as long as he's of working age eg. If he 40 you'll have a 27 year mortgage, a lot more expensive then a 35 year mortgage.

[Odsox]

This is one of those questions that doesn't really have an answer unless you are a clairvoyant. It's difficult to predict what will happen in a month's time, let alone in 25 years or so.
But personally, if I had my life to live over again I'm pretty sure I would buy a property again. I bought my first house back when "ordinary" people didn't buy houses and you could only get a mortgage if you had saved a regular monthly sum with a building society for at least 5 years and even then, like today, you still couldn't guarantee to get one.
That first house cost me (don't laugh) £6,750 and I still had trouble with the repayments, but I managed and renovated and extended it as and when I could which allowed me 20 years ago to sell up and buy this place outright. Now I'm secure whatever happens and my outgoings are virtually non-existent, which allows me to just potter about growing stuff and not have to worry about earning a living.

I guess what I'm trying to say is that I've been through three property booms and busts and every time the market recovers, so a house bought today or before it all takes off again, would be the equivalent of my £6,750 in 20 years time.

Good luck with whatever you choose, as far as I'm concerned the main aim in life is to be happy, life's too short for anything else.

[Mustardseedmama]

I don't have a clue what your market is like over there right now, and I'm no financial whiz, but I did do one smart thing when I bought my first house, and my DH and I did the same thing when we bought this place. We bought low.

When I bought my first house I was 28, and making a ridicules amount of money, (for the job I was doing anyway) around 38K per year, but I hadn't managed to save a dime, and was about $5K in debt. Still, I had a very steady job, making good money, and I had held that job for 7 years. SO when I went to get qualified for a loan, they told me I could have $90,000.00. (Yes I know---shocking isn't it?)

I told them I didn't want that much (sometimes it's good to be afraid), and they (the loan officer at my bank) told me, "You really should buy as nice as you can afford,...think resale value". My real estate agent said the same thing (wanting a bigger cut). I stood my ground and insisted on looking at stuff in the 60-ish range, and finally got a really nice 1960'- built 3 bedroom, finished basement fixer-upper (read needed decorating updates and carpet torn out, etc...) for right at 60. I got a 30 year fixed at 4.8% (those were the days), moved in, and started stripping wallpaper, and of course planted a garden and flower beds.

Met hubby, got married, and because he is tighter than tight, 8 years later that house was paid off. In the meantime, we had baby, completely fixed up house, and then we sold it for a lot more than I paid for it. We did the same thing with the farm, except of course we have no intentions to selling it.

So I guess my only advice, puny as it may be, is; if you buy, buy below your means. If you can see the potential, and can fix it up yourself, you can be happy in something that's not so great at first.

Best Wishes whatever you decide!

[Pumpkin&Piglet]

The silly thing is we could afford mortgage repayments. For my mum, getting a mortgage was cheaper than paying her rent. For us, it's about the same. It's the deposit and the qualifying for the mortgage that's ur problem.

There's no way it's going to happen any time soon, we have to accept that. Recently I have prioritised our family being happy (enjoying outings to the zoo, buying ingredients to make cakes) and my health (I can't work full time due to anxiety/depression etc) but I am recently wondering if we could not spend out on these things and try and make do with less to ut more to one side.

I have considered getting a job but I'm not sure this is a realistic option. We always put a little to one side each month, I just worry it isn't enough. It's going to take us a long long time to get anywhere.

Having spoken to friends as well I think I need to carry on as we are for a bit, prioritising my family and my happiness and health as anything else right now is stressing me out a little too much worrying about it all!!

[Thomzo]

Don't forget that there are more costs to owning a home than just paying the mortgage. At the moment if the roof leaks, or the boiler packs up or something else goes wrong you should, hopefully, just call the landlord and they sort it out. If you own the house then you have to pay for all the repairs and maintenance.

In this part of the world it's rare that the rent on a property would repay a mortgage, even with a 25% deposit, the rents tend to still be slightly less than the full mortgage repayment. The consensus seems to be that property prices are still likely to fall so take your time and decide what's right for you when it's right for you. No need to get stressed out about it.

[The Riff-Raff Element]

It's a tricky question alright... I certainly wouldn't be in a big hurry to buy at the moment, as I think the market's still headed down. Getting some money in the bank is never a bad idea though, if you can.

I think this is very good advice. Remember that once the day comes when you retire there will be no imperative to choose where you live based on where the jobs are, which means you can go somewhere where the rents are reasonable and the views are nice!

[Flo]

Landlords are becoming less inclined to take what are called DHSS tenants (those on housing benefit) as there are so many who don't pay on time or at all. She says from experience before landing in social housing in a decent area. Never forget that social housing may be easier to obtain if you are older and do not want family housing.

[gdb]

You can buy abroad for much cheaper than in the UK. (And the food is cheaper, and the alcohol.... ).

When you get your pension, you can then move abroad and live there. (You will still receive your pension even if you move abroad so long as it is to another EU country).

[GeorgeSalt]

You can buy abroad for much cheaper than in the UK. (And the food is cheaper, and the alcohol.... ).

When you get your pension, you can then move abroad and live there. (You will still receive your pension even if you move abroad so long as it is to another EU country).

But is your state pension not then frozen at the amount when you leave the country? ie. no annual increases to track inflation (maybe it's changed, it certainly used to be the case). Plus your UK pension is in GBP so a drop in the value of the pound and your income rapidly evaporates (I remember the news stories about the ex-pats in Spain when the Euro started to appreciate in the late-90s/early-noughties).