Deciding whether you should buy or rent a property is a significant undertaking. There are benefits and drawbacks to take into consideration when exploring both options. At YOUhome, we want to share our knowledge of the property market and give you an honest and transparent overview of the benefits and drawbacks of both buying and renting your next home.
Generally, buying a property tends to be more secure than renting. When you decide to buy and your mortgage is paid, the home is your own. You won’t have to deal with any landlords or third parties and you have creative control of the property.
Buying a property can be a good financial investment. The home you buy could gain in value over time as the property market changes. In addition to this, improvements and extensions can add monetary value to your home.
Mortgages have never been lower. If you are interested in buying a property, now is a good time to lock in a deal as you are likely to get a very good rate. In their latest report, Mortgage Lenders and Administrators Return (MLAR) said that the average rate on mortgage lending has fallen to 3.01% which is the lowest since the series began in 2007.
Buying a home is a big commitment. You have to be confident in your decision, including the size of the property, the location of the property. It is much mroe difficult to change these factors when you’re paying a mortgage.
If interest rates change, so do your mortgage repayments. While the rates could decrease, they could also increase and you could end up spending more money than you originally planned.
Maintenance, upkeep and improvements including costs are your responsibility. For example, if your washing machine breaks down, you will not have the luxury of calling your landlord to purchase a new one.
Renting provides flexibility. It allows you to be more decisive about where you choose to live. You also have the option of agreeing relatively short terms so you can be where you want, when you want.
You are not bound to one property. While renting, you can move around more freely. For example, if your working arrangements change and you need to relocate, when renting you are in a much better position to be able to change property quickly and easily.
Maintenance costs will generally be covered by your landlord. Although you are paying out money every month in rent, if something goes wrong with an appliance or a furnishing, generally the landlord is liable to cover such costs.
When renting, you are bound by a tenancy agreement from your landlord. This can limit your freedom. While you are more free to move, you do not have a lot of control over the aesthetics of the home. Improvements, decoration or renovation will have to be approved by a landlord.
There is no guarantee of a lease renewal once a tenancy expires. You may end up being happy in a home but the landlord may want to suddenly sell their property meaning you would have to vacate. This can cause upset and a lengthy search for a new place to live.
As a rental tenant, there are no long term investment benefits for you. Tenants end up paying out money in rent but have nothing to show for their expenditure at the end of a tenancy.