Is it better to Buy or Rent? This Is a question that every potential homeowner asks themselves, and there are multiple positives and negatives to buying or renting. In this guide, we attempt to help you decide if you should buy or rent.
Positives of a Buying.
Over time your home could increase in value and can be a potential money maker if done correctly.
If you can afford to renovate, you can do this with ease and help to increase the value of the home or flat without asking for permission from a landlord.
Owning your own home offers a sense of security, this home is yours and can act as a fall back during any financial challenges.
Most Landlords don’t allow pets and in some cases even children, so a family with a pet would find it tricky finding a property that’s suitable to rent.
No one could force you to move because they want to sell, as the property is yours.
Negatives of a Mortgage.
Depending on the Current UK Housing Market, it can be hard to resell your home if you decide to move.
You will be the sole responsible for any maintenance costs like a broken boiler, mold or leaks.
When interest rates rise, your mortgage repayments will increase alongside.
If your property loses value, you might owe more money to a mortgage lender than the actual home’s worth.
Selling a home can be expensive because you will have potential estate agency fees and legal costs.
If you live in a city center, it’s much harder to find a property for sale
‘’The UK housing market has fallen slightly in 2019, the growth is a negative -1.2%’’
Positives of Renting.
There is a lot more flexibility when it comes to renting, as you may not be liable to pay for maintenance issues.
Renting offers further flexibility if your circumstances change and you need to move, this process can be done instantly with a lot less stress than buying or selling.
The process of finding a place to rent is easier and far quicker than buying.
Modern-day renting now comes with perks such as gyms, communal areas or discounts to local restaurants and bars.
It can be cheaper than owning your own home.
Negatives of Renting.
You don’t own the flat or home, so it can lose that sense of security that buying would offer.
All rent payments go towards the landlord, not towards owning the home.
If the landlord decides to sell the home, you could be in danger of eviction depending on your tenancy agreement.
The landlord can increase the rent.
Its harder to get improvements to the property made as it comes down to the landlord to decide.
The landlord can restrict certain things like pets or small children.
Can you afford to rent or buy?
In both sceneries, there are extra costs you must work out to see if you can afford.
If you rent?
Potential service charges or ground rent.
Agency Fees, deposits and first month’s rent.
Early termination and potential renewing fee’s.
Monthly utility bills. (Though some landlord’s offer all inclusive)
If you buy
A larger deposit than renting, at least 5% of a property’s value.
Survey and estate agents cost.
Monthly utility bills
For first time buyers, there are government funded schemes to help you get on the housing market such as the help to buy scheme, which is an Equity Loan that only requires a 5% deposit on the properties value.
Monthly Mortgage Payment vs Monthly Rent Payment
*ONS (Office For National Statistics)
Renting Vs Buying can depend a lot on the person that’s looking, if you’re a young working professional in the City Centre it would be a lot easier to rent, but if you’re a family its more logical to own your own home.
For a lot of occupiers, it comes down to what is easier for them, so if you’re looking to buy or rent, spend a lot of time making sure that the decision you make is the right one for you.