How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely: The life-changing personal finance and investment bestseller

by Andrew Craig

It is perhaps worth quickly addressing another fallacious belief – that renting is just ‘throwing money away’ or ‘paying someone else’s mortgage’. Is it really? Take the example from the beginning of this section: a £500,000 flat being rented for £18,000 a year. Let us imagine that this property loses only 10 per cent of its value in the year ahead (5 per cent because of the market and 5 per cent due to inflation). Our property is now worth roughly £450,000 in real terms. This £50,000 decrease equates to 2.78 years’ worth of rent (£50,000 divided by £18,000). In this scenario, it would be better to be the renter than the owner over the next three years. And this is a fairly conservative example. In the early 1990s many British properties fell by 20 per cent or more