I’m on £5,000 a month but would rather rent than buy – people think I’m crazy

Buying your own home is seen as a financial milestone for many people and offers a sense of security. But the tide could be turning, with research from financial advice firm, Killik & Co, finding for millennials – those born between 1981 and 1996 – homeownership is no longer the ultimate financial goal. Polling by the firm found 20 per cent of those in this demographic think buying property is unrealistic or unattainable, while 10 per cent of younger millennials aged between 29 and 30 associate it with debt and financial risk. Franklin Umenze, a doctor living in Yorkshire with his wife and four children, is one of those millennials not prioritising home ownership. He’s 41, and says he doesn’t see himself buying a home, with the family renting a three-bedroom house for £950 a month and Franklin opting to invest in the stock market rather than save up for a deposit. He said: “When you buy a home you initially put down a large sum as your deposit and then you spend the next 30 years paying off your mortgage. I don’t see that as an investment. The £15,000 I would put down as a deposit I would rather put into mutual funds and get better returns that way.” A mutual fund is an investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities, managed by professional fund managers. Franklin has been investing since 2019 and alongside putting money into mutual funds, also saves into a Stocks & Shares ISA and ETFs – which are investment funds that hold a collection of assets like stocks or bonds.. “I just don’t see the appeal in taking all your savings and putting it towards a house and then you are tied down. It can then be difficult for you to sell so buying is just not for me,” he explained. Franklin takes home around £5,000 a month and invests 10 to 15 per cent of it as well as putting £100 a month into a Junior ISA for each of his children. He also prioritises saving into his workplace pension and a self-invested personal pension (SIPP) to ensure his annual net income – pre-tax but after pension payments – is not over £100,000. This is because once you hit £100,000, the personal allowance – the £12,570 you can earn income tax free – is slowly taken away, creating a 60 per cent effective tax rate. Franklin said: “I just struggle with the notion that you tie all your money into a home and you are essentially paying off interest for 25 years just to own your home but then you could develop an illness and die the next year, so what is the point? “My wife has a different opinion. She sees owning your own home as the ultimate prize so there’s always that conflict between should we or should we not buy. But thankfully, with my training we keep moving around, so that’s an excuse not to own a home for now. So hopefully that continues for a while.” The family will be moving to Glasgow soon as Franklin continues his training, with the rent costing slightly more at roughly £1,200 a month for a three-bedroom house. Franklin said: “People think I am crazy but I feel a lot of young people have jumped on the bandwagon that they have to save and buy a home and pay it until they are in their 80s. I think they should care more about investing rather than just believing in the mindset that has been passed down for generations. “There are alternative routes to being happy and successful and having a good quality of life.” In terms of his retirement, Franklin isn’t concerned about not having the financial security of owning his own home and says, “he will be fine”. “If I continue paying into my pension for the next 20 years it will be more than enough. I am forecasted to get £5,000 a month currently from my NHS pension and then add my investments and SIPP, I will be fine. I will just downsize the house and rent a one-bedroom or two-bedroom property for myself and my wife. We’ll be happy,” Franklin said.