While many people consider buying property to be a mark of adulthood, the truth is that renting is a better option for some. To help you decide the best option for your needs, here is a look at the pros and cons of renting and buying.
Why rent?
Flexibility
One of the main advantages of renting is the flexibility it offers you. In fact, if you rent, you can pretty much live wherever you want (within reason). Some rental contracts last for 12 months, although most allow you to move to a new place after six months. So if you want to sample what’s like to live in an area before you commit to buying there, a short-term rental may be your best option.
Lack of financial responsibility
As a renter, the amount you pay each month is set in line with the exact terms of your contract. This protects you against falling foul of any adverse conditions in the housing market that may bring someone with a mortgage into negative equity.
If you are selling your property and wish to move to an area where the cost of property is high, then renting may well be the best choice. This is especially true for those on average salary.
For example, if you earn £32,000 a year and want to live in London, you would need to earn more than 250% of your current income to obtain a mortgage for an average-priced home. If you want to work out if you can afford to buy in a specific area, there is plenty of information available on the web.
No maintenance costs
As a tenant, it is your landlord’s duty to maintain the property and pay to decorate it.
Why buy?
You’re investing in your future
If you take out a repayment mortgage (as opposed to an interest only mortgage) on property, you are taking ownership of a valuable asset. This means that you are investing in your future, instead of essentially giving away money that you’ll never see again. While the value of your home may go up or down, you will own the property outright after a few years.
Freedom
If you own your home, you can basically do what you want with it (as long as you do so within planning regulations). You are free to stamp your personality on the place and make it a real home for you and/or your family. What’s more, you won’t have to answer to agents or landlords.