Don’t be tricked into being a long-term renter.
Over the last few weeks, I’ve seen a wave of YouTube videos—mostly by Africans in the diaspora and second-gen immigrants—trashing mortgages as a "scam," a financial ball-and-chain, or just plain not worth it because they "trap" you into working non-stop to keep up with payments.
While I get where they’re coming from, this take is dangerously oversimplified. It ignores key nuances that could cost our community serious wealth over time. Let’s debunk this 'renting is better than buying' narrative. First things first: you need to live somewhere
If you don’t own, you rent. Simple.
And in the UK, for most of the last 20–30 years, mortgage payments have often been the same or much lower than rent. That’s right—lower. And rents have been rising at lightning speed. Why? Because the housing stock is barely growing, and demand is rising—not just due to immigration but also because people are moving out of parental homes and needing their own space and staying single for longer. The supposed house-building boom? Nowhere to be seen. Yes, interest rates have risen since 2022, but even at around 5%, they’re still historically reasonable. When does renting make sense?
I’m happy to agree that renting can be the better option in a few scenarios:
1. Short-term living If you’ve just moved to a new city and don’t know the lay of the land, renting gives you flexibility while you explore. That said, if you’re confident and have the deposit, buying can still make sense, even short term, in the UK, I've done it before myself. 2. You’re new to the country Navigating a foreign mortgage system when you’ve just arrived can be overwhelming. Renting is a smart, temporary move while you find your feet. 3. You already own elsewhere If you’ve got other properties and are building equity and rental income, renting your primary residence could be just fine. Just make sure you’ve got a plan to be mortgage- and rent-free by retirement to reduce financial stress. 4. You plan to move around Maybe your job takes you from place to place. In that case, renting makes sense. But if you can afford to, consider buying somewhere stable and renting it out—you’ll lock in today’s prices and start building equity. Why buying in the UK is the better long-term move
Let’s be clear: this perspective is UK-specific. The UK and US might share a language, but their property markets are night and day. Don’t conflate the two.
Here’s why buying wins in the UK:
Let’s take each argument in turn. 
1. You’ll eventually live mortgage- and rent-free
This is a game-changer in retirement.
The UK state pension is around £1,000 a month per person. If you're a couple, that’s £2,000. That can cover all basic bills and even leave room for a holiday--but only if you're not paying rent or a mortgage. If you have other income like a defined benefit pension or strong investments, great—but owning your home gives you serious peace of mind. And even if you retire with a small mortgage, it’s not the end of the world, provided you can manage the payments comfortably and perhaps earn a little income from hobbies. Now, let’s address an argument from Paula Pant of the Afford Anything show: she says most early mortgage payments go to interest, so you’re not building equity. I think that’s the wrong lens. Instead, compare your mortgage interest to what you’d be paying in rent. If the mortgage interest is the same, lower, or just slightly higher, then buying makes complete sense. Example 1: My First Property Purchase (2006)
Instead of buying a 1-bed, I went for a 2-bed so I could rent out the second room—what people now call house hacking. I called it cutting costs and avoiding loneliness. I rented the spare room for £450/month. After adding a £30 increase in utilities, my effective cost was £770—much cheaper than renting the same home for £1,100. I had three lovely flatmates over time—all friends, two of whom are still close to this day. Two years later, rates dropped, and I was paying just £285 in interest. Meanwhile, I was renting the place out and the rental value quickly rose to £1,450/month. Not bad, right? Paula Pant’s rent vs. buy formula says you shouldn't buy if the price/rent ratio is over 15 (250/13.2 = 19 in this case), but I say the maths mathed! For 15 years, I had just one week of vacancy. The key question isn’t whether to rent or buy—it’s how to make a purchase work for you. UK Mortgage Flexibility: A Bonus Mortgages here are fixed for just 2–5 years, not the entire term like in the US. So even if you’re paying mostly interest upfront, you may find yourself refinancing at a lower rate and suddenly repaying much more capital at some point during the mortgage life. Flexibility = opportunity. What About Opportunity Cost? Some argue you should invest your deposit in the stock market instead. Here’s why that doesn’t hold up: a. Leverage works in your favour. My £18,000 upfront cost (deposit + fees + minor refurb) turned into £480,000 in profit—£330k in capital gains (the house sold in March 2025) and £150k in rental profit. Compare that to a projected £108k return if I’d invested in the same £18,000 in the stock market. b. Most Brits don’t invest in equities. Some wouldn't even if their life depended on it. Only 20% do—compared to two-thirds of Americans. Most of that deposit money would have gone into cash ISAs (basically earning nothing) or been spent. c. Deposits often come from parents. A study found that over a third (37%) of first-time buyers received the deposit to buy a home from their parents. And let’s be honest, parents will help you buy a home, not invest in stocks. Use that help wisely. 2. Each payment builds equity
As long as you’re not on an interest-only mortgage, every payment chips away at your loan.
Example 2: Our 2021 Home
We set payments slightly above rent to build equity fast. Within three years, rent in the area jumped to £4,000–£5,000. We’d never afford that as renters, but upping payments to this level just means we'll be outright owners sooner rather than later. So, we’ve upped our mortgage payments to match the new rental range—ramping up the equity faster. This 23-year mortgage? It’ll be paid off in just 10 years at this rate. According to Paula Pant’s formula again (1,000/36 = 28), we shouldn’t have bought. But once again, UK conditions make her formula irrelevant here. Is Homeownership More Expensive? People often say owning is pricier than renting because landlords cover repairs. But landlords only fix what’s absolutely necessary, and UK homes are solid—they don’t break down as much as people fear. Here’s what I spent maintaining that £250,000 house over 18 years:
3. You benefit from rising property prices (even if that’s not the goal)
This isn’t the main reason to buy, but it’s a nice bonus.
Still, I’d prefer property prices simply kept up with inflation—making homes affordable for the next generation. But if prices are going to rise, you want to be on the owning side of that equation. Final Thoughts: Let’s Normalise Homeownership Renting long-term in a market like the UK leads to financial insecurity and slower wealth building—especially when:
Only 20% of Black Africans in the UK own their homes, compared to 74% of Indians. We’re the least represented group in property ownership and, unsurprisingly, among the least wealthy. That can change. Let’s talk more. Let’s share knowledge. Let’s normalise property ownership in our communities.
The following books have strongly influenced my thinking on this topic:
1 Comment
Ethel Chimpeni
22/4/2025 02:14:30 am
Good read, though based in Malawi with a totally different set up, some aspects of what you shared made sense. Leave a Reply. |
Heather on WealthI enjoy helping people think through their personal finances and blog about that here. Join my personal finance community at The Money Spot™. Categories
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