Mortgage calculator: is it better to rent or buy?

Last week I was the beneficiary of nothing less than a 21st-century miracle when, amid a plethora of reports showing that the property market is exhibiting the vigour of Ann Widdecombe's sex life, I somehow managed to flog my flat in Brixton, South London. Ker-ching! However, if I look as miserable as ever, it is because the urge to perform a celebratory jig has been hampered by:

1. Moving. One of the reasons I spent more than seven years in Brixton, despite never having developed affection for the area, and having twice been violently mugged there, is that anything, up to and including being beaten around the head, is preferable to moving. But the shifting of belongings into the friend's house in which I'm temporarily residing turned out to be even more exhausting than I'd expected.

2. The realisation that saving chunks of my salary in stocks would have been more lucrative than buying a flat. Inertia, a series of financial bungles, and the failure of a boiler in the week before the sale, meant that despite the biggest property boom in living memory I only just managed to break even from trading in bricks and mortar.

3. The news that renting - my plan for the future - is becoming just as prohibitive as buying. Paragon, a buy-to-let mortgage lender, reported last week that rents are rising, while Abbey calculated that on average you will spend £10,500 more if you rent rather buy over a period of 25 years.

This last issue was of particular concern, even more so after I read a horrifying article in The Times which described, under the headline “Flats would be gone as soon as they appeared”, the travails of a couple who not only couldn't get on to the property ladder, but couldn't find anywhere to rent in London either.

Thousands would have wanted to gnaw their hands off their arms in frustration on reading it, but I've since researched the topic and concluded that there is no need to fret, not least because there are conflicting reports about the state of the rental market. Data from Hometrack, for instance, shows that, for Britain as a whole, rents for two to three-bedroom dwellings are actually two thirds of mortgage costs. In short, renting remains a realistic and cheaper alternative to owning for most people, in many parts of the country.

Meanwhile, the common argument that rent is “dead money” is ludicrous - if you take out a 25-year mortgage, you can spend the first decade paying off the interest, which is surely no worse than giving cash to a landlord. It is possible to rent, invest on the side, and end up as well off as a homeowner.

But the main reason those in my position shouldn't despair is that renting offers freedom. I'm not referring here to rental being a way of being liberated from the tyranny of expensive toilet blockages, or buying time as you wait to see if house prices really do go the way of John Leslie's TV career. I'm referring to the fact that renting uncouples you from the insane cycle of work and consumption to which home ownership commits you.

The argument probably won't be a popular one, given that the idea of owner occupancy is as entrenched in Britain as the French predilection for going on strike. If the average Briton were offered the opportunity to buy a house next to a known bomb-maker, or rent next to Miss Marple, they would rent only with a very heavy heart.

It seems to me that the property boom has created as many problems as opportunities. It has convinced a great many untalented people, for instance, that they are Britain's answer to Donald Trump, when in fact they have just benefited from the effects of a bull market. It has encouraged greed: I recently had to endure a friend complaining she had “lost” £40,000 on a £500,000 property as a result of the downturn, although she had previously tripled her money through property deals. It has encouraged tediousness: it's still considered uncouth to discuss one's salary in public, but permissible to gloat about the profit you have made on your house. It has propounded the frankly dangerous idea that a house can be a substitute for a pension. And it has fuelled bitterness among those who are not on the property ladder, opening up a troubling new social divide.

But the bleakest thing about the mania for home ownership is how it has trapped millions into dysfunctional patterns of earning and consumption. People buy the most expensive property they can afford, commit themselves to spending the best years of their lives working to pay for it, and then take on even more debt to maintain it, allowing loans to dictate what jobs they take, where they educate their children, and in some cases, who they marry and remain married to.

It's a crap way of living your life, as many Europeans, who generally have lower levels of owner-occupancy, realise. When I get depressed about what happened with my flat, I remind myself that I am at least free of that. And when this thought doesn't have the necessary cheering effect, I remind myself that with mortgages being offered only to people who already own half of Richmond, like many others I have no choice but to rent.

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