In my discussion I am only addressing the investment-side of the buying/renting question.

Best to leave dollars out of this. It is hard enough to make a strong easily understandable case either way in pounds.

In my very simple example, in which no account is taken of increases in value or rent, the renting option obviously costs 700 per month and the buying option 750 per month. If you have cash sitting there earning next to nothing and don't require any mortgage then it makes obvious sense to buy rather than rent. For those of us who have alternative uses for the money which would be tied up in the house which means that there is an opportunity cost associated with buying the property one would have to factor in a notional interest charge which effectively means a mortgage (of say 4%) so the same numbers apply.

Quite honestly we simply don't know where property prices are going from here and they could slide downwards for a decade or more in some locales but this is unlikely. Hence the assumption that they do not rise for our example. Alternatively, there is a possibility that three or four years out from now there could be some improvement in the market. Migration will have some bearing on this, as of course will interest rates.

By the way, a maintenance provision of just 600 pounds per annum for a 200,000 pound value house is extremely low in the long-run when one has to factor roofing, exterior and interior painting, brickwork and plumbing issues in. A safer long-run provision for proper preventative maintenance is between 1 and 2% of the property value per annum.

In addition, there are legal and stamp duty costs on the front end and legal and estate agent costs on the back end of any real estate transaction, if location or property size later becomes an issue and a sale and move is necessary.

Capital appreciation is key to the investment viability (I appreciate that many are not thinking in terms of investment but only a roof over their head) of owning real estate, which is quite aside from a personal preferences and concerns relating to surety of tenure and needing to tweak a rental property.

Location has a bearing on the buy/rent decision as well as there are areas were the landlord's rental return is far lower than a viable return based upon the landlord's costs. So there will be areas where a 200,000 pound house commands a rent of just 500 per month and ironically these could be areas where the costs associated with running the house from the landlord's point of view are actually higher due, for example, to wetter year-round weather and more extreme Winters and year-round storms.

It doesn't make sense to assert that one can rent at 500 per month and buy at 200,000 pounds for the purposes of comparison. One has to take A HOUSE and do a comparison for buying or renting. As I say, there are some rural areas and some depressed ones, such as Cornwall as far up as Dorset where the locals are often renting and they have very limited means and where the returns for landlords are much lower than the norm.

I have reached the conclusion that it makes no sense for new landlords to enter the buy-to-let market at this point as:

1. their returns are likely to be no higher than 5% unless they rent to students
2. the cost of finance is likely to rise in the next few years
3. the potential for capital growth is very murky
4. they also have capital gains tax issues (maybe)

For items 1. through 3. this suggests that for the flip-side, the renters are looking at renting more favourably than are their landlords.

NB. If we were having this conversation eleven or twelve years ago my comments regarding potential for capital growth and the buy / let options would probably have been very different even though it was actually the low interest / stimulative environment post 9/11/2001 that contributed to the eventual run-up in property prices after that event.

Check this, and then try to get more than 50 miles away. EDF(rance) is behind the UK's future nuclear plans (thank goodness!).

http://fr.wikipedia.org/wiki/Fichier..._France-fr.svg

The 2 new locations are Braystones, Cumbria and Kirksanton, also Cumbria. This brings the total to 12 sites. Some of the old ones are to be added to (like Hinckley Point) but not all.

There are 6 in the South: Bradwell, Essex; Hinckley Point, Somerset; Oldbury and Berkeley by the Severn in Gloucestershire and Sizewell and Southwold in Suffolk.
There are 3 in the North: Sellafield, Cumbria; Hartlepool, Co. Durham; Heysham, Lancs. (So there will be 5 in the North with the new 2).
The other is Wylfa, N. Wales.

p.s. The link I posted here recently has all this info and more, including decommission dates.

http://en.wikipedia.org/wiki/Nuclear...United_Kingdom

About 2/3 down are the retirement dates. Apparently Berkeley is retired and Oldbury to be retired this year but there is also Dungeness.

It's actually right on the triple whammy of B road, railway line, A road.
But other than that it's very nice. Lovely big garden.

Well, I was looking at this from a personal perspective rather than a buy-to-let option.
I wouldn't buy into the market at a high point as it is now but probably wait it out and see what is going to happen.
My figures were related to buy vs rent over a 5-year term and the whopping £46,000+ spent in rent over that period would be hard to balance against buying. Even in the current market, that would be equivalent to a 23% decline in house price. In a better housing market, maybe a year or even 2 from now, there is no contest.
Roofs and exterior painting are very infrequent. The roof on my house is 15 years old and in very good repair. Perhaps 1% would be a good number but still, when renting the outlay is huge and gives you no equity in return.

Good lord! For myself I would consider 20-25 miles away. Yes, the wind is a factor. Chernobyl did affect everyone on the planet, but it was an accident of the highest magnitude. Even so, there are things that you can do. The biggest problem of an accident like Chernobyl is the release of Iodine 131 into the atrmosphere. The thyroid system will take up Iodine wherever it can get it but only requires Iodine 128. The remaining 3 becomes a radioactive bullet in the system and particularly affects thyroid functioning. If you make sure that your diet is rich in natural iodine, there is much less risk of this happening.

That £46k figure is kind of arbitrary unless you compare it to the carrying costs of an equivalent property you own, i.e. interest, taxes, insurance, maintenance, opportunity cost of equity in the property etc. Given the current level of property prices in the UK, I'm a little sceptical that in general, absent price appreciation, those carrying costs are typically less than the cost of renting.

The £46k was based upon the rent given with a 5% increase per annum for 5 years. The thing is with renting you also have taxes and insurance (not included in that figure). I agree that the current market would be worth waiting out though.
The other important factor is how long you are intending to stay in the place. The rental option gets worse and worse over time and the buying option better, if you buy at a good time and ride out the price fluctutations that occur. Property prices go up and down in cycles but there has always been appreciation over the long term, not to mention the fact that you are making payments against principle as well as interest particularly by paying a fixed payment, bi-monthly, with a variable rate mortgage.
The other factor that hasn't really been considered is the amount of the downpayment, or if indeed a mortgage is necessary.
I know there are many situations, such as with first time home buyers where the downpayment would be low and the mortgage payments potentially high, but over the long-term the rental payments are going to increase more.

There are a lot of people who can't get back on the property ladder as they don't have the money for a deposit. You also have to look at the cost of moving areas, renting the cost is just the removals, with a property to sell you have legal fees at both ends, and the time and of the worry 'will it sell' 'is it really worth that'.

Yes, this is all true, but this came up for those of us "Moving Back to the UK" so whether we decide to rent or buy in the UK, if we have a house here, it will need to be sold, or might make sense to sell it anyway.
These amounts are all chicken-feed compared to the actual cost of rent, though I agree there are situations where it may make sense. Just not mine.

And so it begins....

http://www.forexfactory.com/news.php?do=news&id=293474

I only mention buy-to-let because a buy-to-letter takes the classical look at buying property from an investment perspective whether in fact you are buying to put a roof over your head or for capital accumulation is another matter.

At the end of the day the question to be answered is:

Under which scenario are you ultimately going to end up with the biggest pile of cash - buying or renting. There will be instances, particularly due to region, market timing, interest rates and whether you actually paid too much for your house at the time, where you end up with a bigger pile of cash (or less diminished pile of cash) by renting.

Not sure how you calculated your numbers, but DH and I looked at this over the weekend and found that PistolPete is correct. Renting actually makes a lot of financial sense.

We looked at several different scenarios in great details and we found that from a purely financial standpoint, the renting option is at least equal to buying a house and perhaps better. This is because the money isn't tied up in a house as Pistolpete said. And if you do more than invest in low interest savings accounts, it's even better.

Personally, I am not betting on a property boom happening again in our lifetimes, so I believe any gain in housing prices will be moderate (at the moment they're still declining).

I think eventually we might like to buy, but the math has convinced me that we should invest our money for a few years and rent instead.

My home pick of the day.

http://www.rightmove.co.uk/property-...-33046166.html

Rodney is very upbeat about prices in Portsmouth but one thing that could upset the apple cart is the cutbacks in the Ministry of Defense which with effect employment big time in Portsmouth.