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27.10.2022
Should I buy or rent a house?
- Renting is usually quicker, cheaper and offers more flexibility than buying. In reality, there are pros and cons to both, and which is best will depend on your personal circumstances and priorities.
- Rental prices are also shooting up, meaning tenants have less disposable income to set aside to build a deposit so they can buy a home.
- If you’re in a fortunate position to be weighing up your options, below I have outlined the upsides and downsides of renting and buying.
Advantages to renting a home
- A tenancy can be just six months and you can move after this time if it doesn’t work for you.
- Moving out of a rented home can often be quicker than selling a property, which is useful in case a relationship breaks down. Renting can also be a handy way to test a new relationship.
- You don’t have to worry about maintenance costs, meaning you are not responsible for the likes of a broken boiler.
- You don’t have to pay mortgage or legal fees and stamp duty.
Disadvantages to renting a home
- Big upfront costs to pay when you move house, which can include a deposit and your first month’s rent.
- Your landlord might decide to increase your monthly rent
- No control over organising maintenance of your home so repairs can take longer than you would like.
- Could have to move if your landlord decides to sell the property, which means you suddenly have to uproot your life and find somewhere else to live.
- You are paying rent to your landlord, unlike your monthly mortgage payment which goes towards owning your own home.
- You can’t redecorate without the approval of your landlord.
Advantages of owning a house
- In the long run you will have the security of a home without the risk of a landlord booting you out.
- You have control over organising repair works which might be done quicker than if you were renting.
- Once you have paid off your mortgage, you will own an entire home.
- While you should think of it as a home rather than an investment, if property prices increase then you will benefit when it comes to selling it.
Disadvantages of owning a house
- Saving for a deposit is hard work and takes a long time, particularly as house prices are rising which makes it more expensive.
- You have to pay mortgage and legal fees and might have to fork out on stamp duty too.
- If repairs need doing, you have to foot the bill.
- Homeowners are subject to the housing market and price movements. If the value of your home drops below the mortgage you secured on it, you will be in negative equity.
- Even if house prices don’t head south, the market can be sluggish. It can take months to sell a property so you can’t just move at a moment’s notice.
- Interest rates are increasing, gradually pushing everyone’s mortgage payments up too.
I am an Independent Financial and Mortgage Adviser and have worked in Financial Services for over 12 years. During my career I gained experience in assisting both individual and corporate clients.…
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