Trying to decide whether to rent or buy? We look at the benefits of each …
When deciding whether to rent or to buy, it’s important to weigh up the pros and cons. Owning and renting a property each have their own advantages, so make sure you think through the options available.
A good place to start is by asking yourself how long you plan to stay in your next home. Renting is often a more flexible option than buying, as you can move on much more easily. Tenants are free to move on once they fulfil their notice period, which is usually a month long, rather than being forced to wait until they have sold their home. This is a good option for those who may face unexpected changes, such as having to relocate for work at short notice, or if you are not sure how long you want to stay in a particular area. Renting can also allow you to live in an area that you could not afford to buy a home in.
Renting a property comes with fewer additional costs than buying. You are only required to insure the contents of your home, rather than the home itself, and any maintenance needed is often covered by your landlord. Renting also avoids the risk of your home depreciating in value over time, which can be a concern for homebuyers. While recent months have seen house prices rise, and the market as a whole more stable, any upsets to the economy can mean you are left with less equity than you expected when the time comes to move.
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That being said, there are some real benefits to being a homeowner. While you need a much larger deposit to buy a home than to rent one, government initiatives such as the Help to Buy scheme have helped huge numbers of people get on to the property ladder. A number of mortgage providers now also offer their own 5% deposit schemes, to help make the cost of homeownership more achievable.
Buying a home is a milestone in our lives that many of us look forward to reaching, whereas renting often feels more like a short-term commitment. This flexibility may be just what you need for the time being, but buying can offer a greater sense of security, and the opportunity to put down some roots.
Perhaps the biggest attraction to buying a home is that you can really make it feel like your own. When renting a property you are often only able to make changes with the landlord’s consent, and are generally obliged to return it to its previous state before moving on. However, you can paint, repaint and renovate your own home to your heart’s content, to get it exactly how you want it.
Owning a home can also have financial benefits. Monthly mortgage payments are a long-term investment that help you build up equity for when you move on. Likewise, you can withdraw money from any equity you do build up over the years, if you should need it in the future.
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When making the decision whether to rent or buy, think about both your current situation and your future plans. Are you able to cover the additional costs of buying, like solicitors’ and surveyors’ fees, or would it be better to spend a little more time saving? Would you want to stay in your next home for a few months, or the next ten years? Do you want to be flexible, or to settle down? If you need a little more help deciding, consider asking an estate agent for advice, so you can be confident your next move is the best one for you.
Nick James MNAEA MARLA