Buying and renting: Your biggest financial decision!
Renting is more worthwhile for anyone needing flexibility, and also easier on the budget over the short term.
However, mortgages pay more each month, but each payment buys you more of the roof over your head. If you are considering of these two options, it is important to weigh up the pros and cons, as it’s a big decision affecting you on a long-term aspect. There are several advantages and disadvantages of buying and renting, therefore we have highlighted some for you.
Pros of renting
Renting gives you more freedom and flexibility; it can be easier to move when you need to. Renting individual rooms, takes away your responsibilities of the bills, cost and appointments of maintenance and repairs rather than renting the entire property where you will be maintaining this all by yourself. The search is usually also quicker than the buying process, this will save you time but renting also saves up money despite the fact that its your new home, your landlord has to pay for repairs and renovations if needed. Its often cheaper, there is no risk of losing money if the property’s prices goes down and rental payments rarely change, making it easier to budget.
Cons of renting
The drawbacks of renting are that the payments go to your landlord, not towards owning a home. Improving the property could increase its price, but this only benefits the landlord. Your landlord can set up restrictions and rules for you while living in the property. Additional cost when renting could be:
-Holding deposit, contract & administration fee
-Early termination fee, check out fee & inventory
Pros of buying
When buying the monthly repayments goes towards buying you a home, this means that at the end of the mortgage’s term you fully own your home and can live then rent-free (after 25 years). If your home increase in value you can use the equity to fund a comfortable retirement, moreover when the prices drop you can lose value. Owning it also means that you can make changes to the property such as landscaping the garden or redecorating the house, furthermore with the renovations and changes you make could increase your home’s value and you might be unable to sell if you owe more to your mortgage lender than your home is worth.
Cons of buying
The drawbacks of buying are that it’s a big commitment; you need to be sure that you can afford what you are taking on. If you fall behind on repayments, it is like getting into debt, then your home might be repossessed. You also need to make sure you can afford maintenance cost like fixing a broken boiler or leaky roof and any other repairs. Buying also involves a large financial outlay such things as:
-Deposit & mortgage fees (Interest rate rises can increase your monthly payments)
-Legal fees & stamp duty
These upfront costs can make it pricier than renting.
2019 brings us some surprises about the housing price:
A. First-time buyers are the most likely to buy a home*
B. There's no place like home (with your parents)*
C. We know exactly where we want to live*
D. New homes are not always brand new*
For short term aspect 1 or 2 years it is much cheaper to rent due to the lower rent paid rather than what mortgage repayments would cost. Consequently, renting or buying both entails risk and rewards. For personal advice about renting or looking to looking to rent, contact our team.