Why I Never Bought Property
It’s sort of the expected thing, right? In the UK and plenty of other places. That dream of “home ownership.”
Until I was 32 I didn’t care. I didn’t know. That world was closed to me. I’d either been on the dole or made £5.50 an hour in retail and didn’t expect that to change. At times I expected it to get worse.
It came as a great surprise to me when I was 34 to be able to afford “my own place.” A small one bedroom flat in London at least, having enough to put down a 10% deposit. I’d gone from no money, to a very decent salary and then that tripled. In the space of two years of working.
I wasn’t prepared. I didn’t know any “people with money” and I didn’t know what those people did with their money. Here I was, suddenly with lots of my own, piling up. Not rich, just suddenly middle class (to match the accent finally). So I did the most sensible thing I could, put it in an ISA and the leftovers in various savings accounts. For a time it felt like it had all been some sort of terrible mistake, like it was someone else’s money. I’d feel queasy when I spent more than £100, as if someone was going to suddenly turn up to ask for it back. I tried to talk to people about money but people don’t talk about money apparently, and also people don’t like you when you talk about money.
So I asked my friends, those who were earning a good salary (relatively, I was an outlier), they all said “buy a house” (or flat).
I’d known about mortgages in a hazy sort of way for years but started to learn about them in earnest. Like other aspects of life which I’d ignored because I never thought they’d matter to me, I found myself binge learning to catch up. I was an outsider, like some alien who’d just landed on the planet with a sack full of cash.
Recalling my thoughts at the time:
“Oh so it’s a loan, the house or flat isn’t really mine until the loan is repaid. Okay. And it’s usually 25 years. A 25 year loan?! Why would I take on debt for that long? Okay, so the interest varies over the years, there are deals and sort of min/maxing game you play to get the best one. There are fees, also some have penalties for paying too much or trying to pay it off too soon. Yikes. Oh but you can ‘sell’ the place at any point and get the amount you’ve paid off on the loan, plus your deposit, back. Minus the interest. So that’s the ‘equity.’ Right. Then you can use that ‘leverage’ to get another place and ‘climb the housing ladder.’ Eventually you’ll own some place and the loan will be paid off.”
And the the next thought:
“This is bollocks.”
I got it. I really did. I could do the calculations and work out monthly payments based on interest, how stamp duty applied. All of it. But it was still absurd. All this just to live somewhere? Also why would I want the bricks I lived inside to be my main financial investment in life? This was supposed to tie-in with retirement planning? I also found “retirement” perplexing but that’s for another post.
I just wanted somewhere to live. I didn’t need to “own” it. Why would I want the responsibility of fixing it up if something went wrong? I didn’t want to become an expert in bricks, mortar, roofing or plumbing — even if I was interested in those things. I liked renting just fine, fully furnished even — but I didn’t have a problem with owning furniture. Owning a building or a part of a building seemed a bit… silly. Especially the “part of a building”, leaseholds smelled of a racket. It was all silly. Most people I knew thought I was the one that was silly, that I wasn’t being a “proper grown up.” I thought they were brainwashed.
But if that’s the way the world, or the country, worked then I could understand that paying down a loan would be preferable to paying rent (putting aside the interest front loaded on a mortgage). In the long-term you keep most of your money. It appreciates too. I get it. But it seemed perverse that everyone wasn’t getting on board with a 25 year financial instrument as soon as they were able to. People I knew around my age who’d just started on this path would be making cutbacks in areas of their life for the monthly repayments, or trying to overpay. But what about having options? Like taking time out to go travel, or just living? I saw people desperately trying to get onto these 25 year loans and felt sad that this is how the world worked.
Having a high enough income to not need to compromise my lifestyle, I tried to get with the programme too. Started viewing places in 2015. Because I hadn’t really grown up with a home I didn’t feel the thrill some do when they see a prospective place to live and start thinking about paintings, hangings, furniture and adornments. My parents didn’t do any of that, no photos or decorations. Bare and drab. So I had no idea what I’d do either. All the flats I saw seemed samey. The places I’d rented I’d kept pretty much as they were, unless I’d moved into a place with a partner, then I just let them do whatever they wanted with the place. I don’t really have a lot of things anyway.
After a year of doing viewing on and off and having learned all the financial calculations in my head (I’d advise friends on mortgage issues), I decided to park all this for a while. The deposit and stamp duty would clean out a big chunk of my savings at the time, that worried me. What if I needed that money for something else in a hurry? My options would become limited suddenly from going from a place I rented to one I “owned.” But materially there would be no difference. So better to hang onto my cash.
Renting worked for me. Renting was “accommodation as a service.” I like most things “as a service.” Let someone else deal with the heavy lifting while I live my life. It’s especially good in countries around Europe and some other places where there’s rent control and multi-generational tenancy agreements. More of that! It just seems a better model for city living, and I would only ever live in a city. Although I can understand the appeal for those who want to own a house in the country, especially those who enjoy working on the house too. That’s different, that’s a hobby/passion/pastime.
As many suggested, I could have bought property purely for investment purposes. Rented it out, become a landlord. I’ve known some great landlords, so no offence — but no. It just sounds wrong. Time Lord? Sure. Landlord, no way. Also it feels strange to have people living in a place and considering it their home… except it’s really mine… no, really the bank owns it. What a weird game. The banks own most people’s homes. It’s all bonkers.
So a few years went by. My income and savings grew. I put them in index funds and suchlike. Boring slow growth instruments. I’d learned about all that too. No speculating or day trading for me. I kept a hefty portion “liquid”, waiting. In case I woke up one morning having had the dream of home ownership, running to the local estate agents in my paisley pyjamas and slippers waving a wad of cash. It didn’t happen.
Then in April 2022 I stopped working. Or rather I stopped doing paid work, my income went to 0. Not forever, just for a while. I went off travelling and a portion of that liquid chunk came in handy, just being there “on tap.” I’m sure by this point, even if I had bought a place I’d still have been able to go off travelling. But I’d have needed to keep up with the mortgage payments, which I could have covered from my savings. So I’d be more invested in property than in stock funds. I won’t work out which is better here, but suffice to say I’m happy with my choices.
Except, being back in the UK now, I didn’t get to come back to “my place.” Technically homeless. If I’d had a place maybe there would have been tenants living in it? In any case, I’m thinking of renting again but hedging my bets, so short term to begin with.
Thoughts of home ownership are creeping back in, at least having a “base.” Somewhere I can come back to now and then. I love my autonomy and freedom but being this untethered isn’t healthy or sustainable. So I’m starting to understand a little of the appeal of ownership. This is economics, if serviced short term lets were plentiful and closer to local rental prices then I’d be perfectly happy doing that. Unfortunately Airbnbs and similar cost over three times as much as what I was paying in rent for the flat in Pimlico before I left.
So maybe having a fallback, or a “bolthole” would be a good idea. Parts of the UK where a small one bedroom or studio are cheap enough for me to buy with cash. Contingency planning for an older me so I have somewhere to live if all else fails. My mother lives in a council house and when she dies the council will reabsorb it. There is the option to buy that too, through the Right to Buy scheme. But I’d rather not be a part of the problem of destroying the pool of available social housing in this country.
Well I guess I’m at a point where I need to make some decisions. That thing about being a “proper grown up” those people mentioned a few lifetimes ago.
Still haven’t worked through the guilt either. A sort of “survivor guilt” of having “made it”, being “lucky” enough to be in the position that many dream of — of being able to buy a home. I very much keep my mouth shut when friends talk about their mortgage troubles.
Also “buying a home” sounds wrong. You “make a home.”
This all feels like a very “me” problem. It’s a legitimate problem but also feels silly when viewed through the lens of “regular people.”
I’m not regular people. Sorry.
Maybe I’ll just go live on a tiny island.
