You’ve probably heard people say that renting a home is like throwing money down the drain. While buying a house is often the sensible economic decision, it’s not always the most practical.
There are benefits and drawbacks to buying your own home. Consider them all before deciding which option is best for you. ‘Should I rent or buy a property?’ is a very complex question, and it deserves a lot of thought.
The benefits of buying a home
Ownership
You don’t truly own your own home until you’ve paid off your mortgage. But once you have, the property is yours to do with as you wish.
Something to bequeath
A lot of parents take great pride in being able to bequeath a home to their children. The sooner you buy, the sooner your children can benefit.
Generate equity
While there are fluctuations, property prices in the UK are generally on an upward curve. If you’re in this for the long run, a rise in local house prices could leave you with a lot of equity. And you can use this equity to fund other purchases, lifestyle decisions or home improvements.
No one to answer to
When you rent a home, you always have to ask the landlord’s permission before you make home improvements. And even then the answer could be no. When you buy, however, you can pretty much do what you like — unless the work involves major structural changes.
It’s often cheaper
Rental homes in the UK have never been so expensive. The rise of the buy-to-let-mortgage and a chronic shortage of housing has driven rents up significantly in recent years. But when you buy, the only intermediary is the lender. And that’s why owning is usually cheaper than renting your home.
The drawbacks of buying a home
A big financial commitment
Buying a home is a long-term commitment that must be taken seriously. If you don’t keep up with repayments, you could lose your home — and any chance of obtaining credit in the near future.
Uncertainty
Fixed price mortgages only last for a few years, after which time repayments can fluctuate in accordance with interest rates. This might complicate some of your long-term lifestyle plans.
Moving might be tricky
If you rent your home, moving doesn’t entail too many complications. Give notice to your landlord, and make plans for the future. Even if you have to wait for your lease to expire, there’s certainty in the process.
But when you own a home, you’re at the mercy of outside forces. There are no guarantees if you need to sell a house fast to fund your next move. Your plans for the future could be determined by the state of the property market at the time. But there are other options, including Sell Property Fast Cash if you need a quick house sale. This national homebuyer purchases property without the need for marketing and negotiating.
Maintenance costs
When you rent a home, you don’t have to worry about your boiler breaking down. Big repair jobs are the responsibility of the owner.
Splitting up complicates the issue
If you live with someone, owning a home can become a real headache if the relationship breaks down. Selling a house and dividing the proceeds can be a complex legal issue, but it’s no issue at all if you’re renting (although you’ll both be responsible for rent payments until the end of the lease).
Negative equity
If property prices fall, you might find that you owe more on your home than it’s worth. If you can afford to keep up with repayments in the medium term, this shouldn’t be a major issue. But if you need to sell up and move, negative equity could trap you in your property until house prices recover.
Buying a home is a big step in life. But the pride, security and comfort it delivers are why so many people choose to buy a property of their own.
