When it comes to finding your new home, some people will have a choice to make – should they rent, or buy? For some, buying a property is a must, and is something that they have been wanting to do for many years. For others, the idea of owning a property just doesn’t feel right, and they would much rather spend their money on rent. There are pros and cons to each option, and it will come down to your own situation and personality. Here are some things to consider if you’re just not sure.
To Own Or To Borrow?
Owning your own home means that you can make all the improvements you want (within reason, of course – some are going to require planning permission, and don’t forget to check which walls are structural before you start work on a big project) – whereas when you rent someone it’s unlikely (although not impossible) that you can do any renovations. To all intents and purposes, you are borrowing that property from the owners, even if it is a long term thing.
Even if you’re not worried about such things right now, what about the future? If you are renting in a place that doesn’t allow children, for example, what will happen if you choose to start a family? Of course, renting means you’ll be able to move to somewhere bigger, or more flexible, more easily than if you owned, so there is a benefit there. You’ll need to take all the renting restrictions into account before signing up.
Remember that although you’ll have a lot more freedom if you own your own home, you’ll also have a lot more responsibility, and in the end that can cost you more as you’ll need to repair any problems that occur. When you rent, many repairs will be the landlord’s responsibility.
The Money
No matter where you live or what process you use to get there, you’re going to need to pay out for it each month, either in the form of a mortgage, or rent. The first thing to do is to look at your budget and determine how much you can afford each month. Then look at where you want to live; can you afford it to buy there? And if you can’t afford to buy there, can you afford to rent there instead? It’s entirely possible. Renting in a popular area can often be cheaper than buying, and it’s this reason that a lot of people choose to rent. Yes, they could buy a place somewhere else, but since location is so important for so many reasons, it can often be the deciding factor.
What worries some people when it comes to renting rather than buying, however, is that there is no return on the investment. When you pay a mortgage you are paying off a loan, and putting more equity into your home each month. By the time you decide to move, you can usually afford somewhere bigger, and perhaps even in that location you wanted in the first place. So what is more important? Location or investment? One will be your priority and that’s the one you need to follow.
Deposit
The big issue with buying somewhere is less a question of affordability (mortgage payments and rents tend to be fairly similar) and more a question of the deposit. In many cases it needs to be 10 percent if you’re buying (sometimes 5 percent, depending on government schemes and the flexibility of your mortgage provider and the vendors of the property you want to buy), which is often tens of thousands of pounds. When renting, the deposit is a lot less – usually six to eight weeks of the rental price – which is a lot more affordable for many.
It’s Your Choice
If you’re ready to take that first step onto the property ladder, or to secure your first home with a landlord, The Good Estate Agent can help. Call 0330 223 0670 or email property@thegood.co.uk to find out more.