To buy a house or to rent a house?
Which came first, the chicken or the egg?
Ok, well it’s not the same sort of question as ‘shall I buy or shall I rent?’ but as with the chicken and egg question, the answer is definitely a matter of opinion!
To begin with you have to decide whether you wish to buy a house, and if you understand all the responsibilities and risks involved. Here, we focus on the key advantages and disadvantages of buying/renting a property.
Buying a House
• Becoming a home-owner can be seen as an investment. This is on the assumption that over time you pay off your mortgage, of course! Once this is done you are left with valuable asset.
• You have the freedom to make any changes to the property that you wish.
• You are not dependent on the landlord when it comes to maintaining the property, and can alter and decorate as you see fit.
• The financial costs can be daunting, both in terms of size and complexity. As well as your mortgage repayments there are many other costs to factor in, for example legal fees, estate agent fees and stamp duty.
• You will have to finance any major repairs to the property, and those bits and pieces always come unexpected!
• You are less mobile than if you were renting a property. If you decide you want to move then you have to sell before you can do so.
• Negative equity – If your house value falls, you may be repaying a loan that is worth more than the value of your property.
Renting a House
• The initial costs are much lower. Although a bond/deposit is usually required, there are very few other up front costs such as legal fees etc. If the property is furnished, this lowers costs further.
• It is far easier to change property. Many people rent because it offers them the flexibility of relocating with relative ease.
• The landlord is responsible for maintenance of the property and any required repairs.
• Due to the possibility of eviction or non-renewal of contract, there will always be a certain sense of insecurity when renting.
• The money you pay in rent is passed to the landlord. Unlike purchasing a house, the property is not retained by you as an asset.
• If sharing a property, you may have conflicts with fellow tenants.
• Some landlords may attempt to “cut corners” when maintaining your house, which may lower the quality of your accommodation. Not ours, we hasten to add!
These are just some general thoughts to take into account to help you make a decision on whether to buy or rent.
We are more than happy to give you some further, tailored advice if you wish.
Simply give us a call and we can help point you in the right direction.
Alternatively, come along to one of our Advice Clinics (every Wednesday 4pm – 6pm at our office!) for a face to face chat, and we may even make you a coffee/tea with some biscuits!