Most people aspire to own their own home, but a growing number of people choosing to rent rather than buy - Why, and what are the benefits and disadvantages?.
The idea of owning your own home creates an idea of stability and security, but with the high costs of getting a foothold on the property ladder, uncertain house prices and the current ecconomic climate, just how secure are you when you buy your house?
Whether you choose to buy or rent a property of course depends on your personal circumstances, such as employment, marital status, dependants, ties to an area etc.
Below we have tried to look at the pros and cons of both renting and buying a property to help you find which is right for you.
What are the benefits and disadvantages of renting?
1. Cost Of Rent:
Rental prices can be negotiated and a good deal can be found due to the number of empty buy to lets that are on the market. Deposits can be negotiated and are no where near the deposit levels involved in buying a property. Rental deposits are typically one months rent in advance, which is paid with the first months rent.
If you do not have any long term plans to stay in a particular area, renting can offer flexibility with a short term contract. You are then free to leave or move on at the end of the contract. This is not so easy when you own the property, as you are tied to that location until you are able to sell or rent out your property.
When renting a property you are not responsible for maintaining the property. This is taken care of by the landlord. If you own a property and your boiler breaks down, you are the person that pays for the repair, but if this happens when renting, your landlord is responsible. This saves you money and is one of the biggest benefits when renting (Providing you have a good landlord!).
When renting it is difficult to make your home feel like home. Many people do not wish to decorate rented property and enjoy the stress free lifestyle without DIY , where a landlord is responsible for decor and upkeep. However some people do like to decorate and personalise their home, so always get written confirmation from your landlord and confirm any works you are to carry out by obtaining written permission.
5. Live In A Nicer Area:
When buying a property, you often have to compromise due to your budget, and more often than not, are unable to live in your first choice area. Renting can make your dream location a reality! you may not be able to afford to buy here but you could afford to rent here.
What are the benefits and disadvantages of buying a property?
Put your stamp on your property! Owning a property is your chance to make your home feel like home. You can personalise the space are free to make any changes without having to request permission from the landlord. You are the boss!.
Many people see their home as an investment and hope that the property will increase in value over the years to provide a nest egg for the retirement years. Unless you buy your home without a mortgage you will pay interest over the term of the loan, typically 20-30 years, so you will pay back significantly more than you borrow, however the hope is that your property will increase in price enough to offer a good return. When renting, you are usually paying your landlords mortgage, so you will never see a return on the money you spend.
If you own your own house then you are responsible for any repair that needs to be carried out. There will always be odd jobs that need to be carried out and you may find your weekends being taken over by DIY jobs. You can reduce the risk of any large repair jobs by ensuring you have a full survey carried out before you purchase the property to make sure there are no nasty surprises.
The days of the 100% mortgage are over and to get a foot on the ladder you need to have deep pockets. If you want to buy a house and have not started saving, then now is the time. More and more people are staying at home with parents in order to save a deposit to buy their first home. Renting on the other hand is a cheap and fast way to get your own place, and is growing in popularity with the younger generation as an option of choice rather than necessity.
Why not speak to one of our mortgage experts to get information on what's best for you.