With such terrible times in recent years looming over the property market it is very hard to know whether one should buy or just carry on renting. As a person currently living in London I sometimes feel that renting is a massive waste of my money. But is it…
For one if I spend 12000 uk pounds a year on renting, it sounds like lots to me but if I buy now with the current trends who knows what I can stand too loose. An apartment near central London can cost an easy 400,000 uk pounds. If we are to start losing money on the value of this apartment, at say 5% per annum, then that’s a loss in year one of 20,000 uk pounds. We don’t have to be good at maths to understand that currently it may no be such a waste of money to hold out and rent.
No one can really know which way the property values are going to head this coming year but it certainly does not seem to great to me. So for the price of a nice apartment I can look at the current market and think that renting is actually going to save me about 8000 uk pounds with the example I have listed above.
I for one think that buying at the moment is far too great a gamble and will be more then happy to keep on renting my own living space. The reasons I conclude this is the following:
– Interest rates are currently low, but for how much longer.
– Buyers are still not around in large numbers so properties are not selling. Low demand equals falling prices and lower offers being excepted.
– With the jobs market looking so bleak there will be many more repossessions on the cards, again creating a down turn in the market.
– Holding out till I purchase again seems like a good idea.
Daniel Zane London