Monday, September 14, 2015

House - so close and yet so far


Sink me! I've just joined the ranks of people whose house purchases have fallen through (apparently around 35% of sales don't complete in the UK). In this instance it was myself who pulled out of the transaction at the last moment due to unforeseen circumstances. It's a shame because the house I was buying had loads of character. However, on the upside it means I can continue my tramping existence, renting rooms as I go.

Here in the UK it is a received wisdom that renting is like 'flushing money down the toilet'. However, this is certainly a misconception when it comes to renting rooms compared to ownership. Lets say a room costs £600 per month all in. If you owned a flat you'd be paying at least £450 a month in bills (utilities, council tax, insurance, service charges, minor repairs). Add a bit more for mortgage interest and you are back to flat again. That said, if you can buy a place which has a spare bedroom that you don't mind renting out, then owning starts to make financial sense.

I may be tempting fate here, but I have no concern about house prices escalating further from current levels. While prices may go up a touch, buy-to-let investments are barely washing their face in the current environment and interest rate rises are expected around the corner. It's probably a good time to keep my powder dry, so to speak.

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