To buy or not to buy a place to call home is the question on many people’s minds when they reach a certain point in life. If you have a good job, you’re settled in one place and can see yourself staying there for the foreseeable future, so would it be more beneficial to take out a mortgage or continue to rent?
Largely, the answer often depends on the person; you may have different values to the conventional home buying route. One reason for continuing to rent is the fact you have more freedom as a tenant, and will not find yourself tied to a scary mortgage contract with six figures written on it.
However, paying rent means that technically you are making your landlord better off, rather than contributing towards your own investment as you would be with a mortgage. Many refer to renting as throwing money down the drain; however, renting can initially be much cheaper than buying.
As a tenant there are no hidden costs and you know where you stand – you simply pay the regular rent each month and, apart from the odd bit of furniture as an investment, that will generally be all you pay for the roof over your head.
Buying comes with added costs; some mortgage lenders now charge arrangement fees, on top of several other costs that must be paid, such as stamp duty and surveys. These all add up and you could find yourself priced out of buying if you are not careful and forget to budget for all eventualities.
However, there is nothing quite like owning your own home. Yes the initial costs may be more than renting, but once these are out of the way, mortgage repayments are often similar – if not cheaper – than rent would be on the same property. What’s more, as a homeowner you can relax and do what you like in your own home – get a dog, smoke if or re-decorate, among other things. As a tenant you must abide by your landlord’s rules and there may be certain restrictions applicable to your tenancy.
One advantage of renting over buying is the cost of household repairs. If your water pipe bursts, or your roof leaks while you are renting a property, it is up to the landlord to foot the bill for repairs, whereas if this happens to you once you have taken out a mortgage, paying for repairs becomes your own responsibility.
But, if you are looking for a long-term home, buying may be the best option, as renting can be rather unreliable due to eviction risks and short tenancy agreements. Most private landlords only offer rolling six months tenancy agreements which are often subject to a satisfactory inspection at the time of the renewal of the tenancy; whereas local council and housing association tenancies are usually long-term leases, providing of course the tenant maintains rent payments.
There are pros and cons to both renting and buying a property, and the final decision about which route is best suitable depends on your own personal circumstances and whether you seek long-term security or not. It is also worth bearing in mind the housing market at the time as it may affect your decision if house prices are unstable.
Adam Singleton writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
