steviedeluxe

I realise it's made sense in the past, when house prices generally rose. But now we're facing an austere future, with governments being forced to make cuts left, right and centre, surely house prices are going to decline steadily? So why buy? And if someone is selling up in the UK and deciding to rent in Spain, where's the safest place to keep their money in terms of not losing value? Gold?

steviedeluxe

Just realised I should have put "people" and not "Brits". I understand that if anything, the Spanish have a higher ownership ratio than the British.

LittleWeed

Rent rather than buy is looking a good idea in Spain, and especially for new builds where you immediately lose over 20% of your investment in IVA and fees.

steviedeluxe

Well exactly. I know they've suspended stamp duty in the UK for a while now (for properties under a certain value, I think it was around 220,000) but at some point that may come back. In uncertain times (when you don't know how long you'll stay in one area) it's really expensive to buy. Makes sense if the house price is increasing 15% year on year, but those days are over...

jackytoo

From a personal point of view I would hate living all the time in someone elses property. In Spain there isn't much security as most are short term contracts.

I have friends who rent an apartment on the CDS. When they first moved to Spain they could have bought it for £40,000. They are now faced with returning to the UK as they can no longer pay the 650 per month out of their pensions. The apartment would fetch around 100,000 even if they reduced the asking price by 50%. They must have paid out about 7000 pa for 14 years!

Of course I wouldn't buy in Spain right now , it is still a falling market

Madridboy

I think you'll find this is mainly in tourist areas.
I wouldn't buy where I live as there's no way I could afford it. I live in one of the most expensive areas of Spain and have taken good advantage of the crisis and am renting for a fraction of the price the appartment would normaly go for.

pete_l

I agree that governments everywhere are having to make cuts, but for people with long-term jobs or secure incomes (e.g. from pensions) the future's not at all bad. In fact since the crisis dropped interest rates to an all time low, a lot of people did very well from the reduced mortgage payments - or keeping their monthly payments the same and making huge reductions in the lifetime of their mortgages.

So far as the rent or buy question goes. There's a widely held belief that paying rent is wasted money - it's gone and you've still got to pay again next month. Plus you're at the mercy of the landlord: either to make necessary repairs or not to throw you out in a year or two, when the lease expires. So people who want to guarantee a nice house (and one they can do up to they own specification), and/or who value stability wouldn't want to rent.
Obviously renting has benefits, too. Such as being able to up-and-off if you decide you don't like the house or the area. That's a bigger advantage in Spain, where it can take 2 or 3 years to sell a house - and incur massive costs in doing so.

In the end, it's an option. People are free to make up their own minds which one to opt for. I don't think I would want to judge people's decisions as I don't know their particular positions, or needs.

jimenato

Interesting. We rent in Spain and let our property in England. This is quite a good idea I think. Our tenant in England is more than paying our small mortgage and we still have a toe in the British property market. When we first started renting our Spanish house (about 5 years ago) we could never have afforded to buy it - maybe we will sometime, I would like to. I would be sick as a parrot now if we had bought back then. The rent is very reasonable and I like the freedom to move if I want to - believe me there are some here who would like to have that freedom.

I have no problem at all living in someone else's property - they have to maintain it

Our let has lasted five years already so not short term.

Ideally I would like to sell our house in England at exactly the right time and buy in Spain at exactly the right time. Anyone got a crystal ball?

In answer to the OP - property ownership is deeply ingrained into the British psyche - it always has been in mine but as I said - I am very glad we are renting at the moment.

BTW, are we sure that the housing market in Spain is still falling?

whitelinen

There´ s evidence that it is picking up, a good property in a good location at the right place will always sell, which is what we are seeing in both Spain and the UK at this moment.

As for renting, I couldnt think of anything worse. How can anyone really feel at home and at ease in someone elses property when at any time the tenancy can be bought to an end and the worry of finding another suitable place to me would be unsettling.

jimenato

It is all about personal choice and circumstances. I always thought that way - house ownership confers a sense of permanence and security. Since upping sticks and moving here my view has changed. We lived on our yacht for seven years and loved it - the sense of freedom is in stark contrast to the permanence and security of house ownership. For me to own a house now would almost feel like being trapped, a millstone. Renting is a decent compromise. I'm not saying I will never own again but right now renting is the right thing for me both financially and personally.

montgomail

In the UK, property is selling. Five properties have sold in just over a week in the village where I live ... although there are some that have been on the market for nearly a year. As ever, the pricing is crucial.

Veleta

I always prefer buying over renting as I can never feel completely 'at home' in a rented property. It just always has a temporary feel about it.

I love turning a house into a home (by painting, decorating, making alternations, choosing fabrics, furniture, etc, etc) but I would never do any of that in a rented property...why should I spend so much time and money on someone else's property?

Also, I never view my primary residence as an 'investment'. That's not why I bought it.

jay01

Houses are selling in the UK, but it is all about location, location, location.

We muted about putting our house on the market when we moved to Spain although we are renting in Spain. Approached an agent and the house was sold before it went on the market. It took the grand total of 3 days from thinking about it to it selling.

We are not looking at buying in Spain, at the moment it is to volatile a market, may not like it once we have been there a while and a million other reasons I can think of.

We are all fixated with owning property and I think that comes from our parents who struggled to own their homes where as our grandparents only ever seemed to rent. The only ones that really benefit from buying are our kids when they get their inheritance, landlords benefit from rent but they have the hassle and the risk of repairs and bad tenants.

cricketman

You forgot to mention "and at the right price" that is the key!

For me renting and buying is a question of numbers. I bought in London because I knew if we wanted to leave we would have the option to rent the place out and cover the mortgage, so it was a no-brainer. We've been making good money over the past 3 years doing that.

In Spain, the flat we live in is up for sale at 400k euros. To buy that I would need a 20% deposit and 10% taxes, therefore to pay 120k euros just to move in and then a 2k a month mortgage. Then there are the 250 euros a month service charge.

Instead I rent and pay 800 euros per month with no service charge If you look at it like that it makes absolutely no sense to buy and I sleep safe because I know this flat could never be sold at that price.

Btw, I feel as much at home in a rented place as in my owned place. To be fair, the bank owns our flat more than we do since we didnt buy it with our spare cash!

And we always have our own furniture so the places we live in feel like ours. I think that is important.

jdr

Exactly the same as us, and an added bonus is no fear of the place being bulldozed or a dodgy council legalizing your property for 50`000 €`s as is happening to some that have legally bought, or so they thought.
Or some that bought at 300'000 €`s and can`t sell it for half even.