Deciding whether to stick with renting or start saving to buy a home can be difficult. Owning your own place may be marketed as the most desirable option, but buying isn’t for everyone. Equally, you might not like the idea of having to rent for the rest of your life!
There are pros and cons to both renting and buying, of course. To help you make a decision, here are some things to consider.
Many people choose to buy because they see it as in investment; while it may take you several decades to pay off your mortgage, eventually you will be completely rent-free. By buying a home you are planning for your future and retirement. No one wants to have to worry about being able to afford their rent at the age of 80. Once you own your home, you could even choose to sell it in order to fund a more comfortable retirement.
Your first home may be a small two-bedroom flat, but once you have some equity you can use it to buy somewhere bigger, or a property in a more desirable area. Getting on the ladder allows the opportunity to eventually land your dream home.
Additionally, owning rather than renting means you can make changes to your property. Whether you want to knock down a wall or put up a shelf, you’re pretty much free to do what you like!
The upfront cost of a home may be daunting, but over time you could save yourself a lot of money. Mortgage repayments are sometimes cheaper than rental agreements, and the more of your mortgage you pay off, the cheaper those monthly repayments will become. Rent, on the other hand, is likely to increase over time.
However, buying isn’t always the more cost-effective option – it all depends on the current condition of the house market in your area.
Not only does buying a home require a lot of money upfront (and, for most, a mortgage), you also need to consider the other costs involved. Along with your mortgage each month, you’ll be forking out for house insurance, council tax, bills and any repair/maintenance costs. If you decide to purchase a leasehold, you’ll likely need to pay a ground rent plus a maintenance fee, too.
Additionally, there’s always a chance that interest rates could rise, which will affect your monthly mortgage payments. If you feel as if you’d only just be able to afford a mortgage, now is not the right time for you to buy.
Before committing to buy, you must be sure that you can afford all of these costs. Otherwise you could fall into negative equity and lose your home altogether.
No one knows what the housing market is going to be like in a few years’ time – you could stand to make a lot of money on your property, or another recession might happen and its value could plummet. If this does happen, it can be difficult to sell, meaning you’re stuck in the property until its value rises again, which could take years.
Buying a home is a costly venture and it may mean you’ll have to give up some luxuries for a while, such as holidays, meals out and other luxury purchases. The good news is, so long as you haven’t stretched yourself when it comes to the mortgage repayments, you will eventually be able to afford these things again!
You might have more freedom when it comes to doing up your home, but you aren’t able to move from property to property as you please. By buying a home you’re committed to staying in it, and that area, for a fair few years. Moving house is expensive and time consuming. Plus, if you’re living with someone else and you split up, deciding what happens to the house can be tricky to say the least.
You may have rent and bills to pay, but no mortgage means you can’t fall into negative equity and lose a property you’ve spent so much money on. You’re not affected by the housing market either – you don’t have to worry about interest rates suddenly rising or what you’ll do should the UK suffer another recession.
If the idea of having to fix a boiler or re-carpet a hallway terrifies you, then renting is the better option, as these costs and responsibilities fall to the landlord.
If you don’t yet know if you’re going to settle down with someone or stay in the area you’re currently living in, renting is preferable to buying. That way, you’re free to relocate or move out at any time.
Many landlords won’t allow you to keep pets of any kind in a rented home. Even if you do manage to find somewhere that’s pet-friendly, when you eventually move out you may discover that finding another place that will let you keep your pooch is difficult.
Although you may pay to live there the home is not yours and your landlord could decide to sell up at any time. If you have a fixed tenancy agreement you might have more time to prepare, but you’ll still have to go through the stress of finding somewhere new to live, fast.
Mortgages may not be cheap, but homeowners find comfort in the fact that their payments mean that one day they will own their property. With renting, your money is simply going in someone else’s pocket – it’s not being invested. Some people are okay with this, but if you’re not, you will be happier owning.
You might be lucky – your rental property could be owned by a kind landlord who always makes sure repairs are completed swiftly with minimal fuss. On the other hand, you may end up with a landlord who’s difficult to get in touch with and takes weeks to get anything done. It’s a risk you must be willing to take.
Whether you should rent or buy depends entirely on your situation. If you’re not sure what the future holds for you and want to be able to move out at the moment’s notice, renting is definitely the better option. However, if you’re planning to settle down, start a family and therefore want to feel secure, buying is your best bet – so long as you can afford it.
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