Should You Rent or Buy?

Should You Rent or Buy?

Dec 01, 2022

With the cost of living perpetually on the rise, homeownership, rent prices, and property availability are hot topics. According to recent polls, over three-quarters of UK citizens want to own property at some point in their lives. However, is buying a house really all it’s chalked up to be? Of course, the answer is complicated, and there are many advantages and disadvantages to both buying and renting. Let’s explore these pros and cons. 

Renting Advantages

The primary advantage of renting a property is flexibility. With the freedom to come and go as you please within reason, it’s easy to see why renting is favoured by the younger generations. Rental contracts are usually six or twelve months long, so if you need to move to a different area or a smaller property, you can hand in your notice and leave with minimal disturbance. 

In terms of maintenance, it is the responsibility of your landlord to organise repairs and maintenance work, provided they are reported promptly. Extensive home repairs can be costly, so having your landlord take care of these issues could save you a considerable amount of money.

Some landlords will grant tenants a sufficient level of freedom in terms of superficial changes made to the property, so you will likely be able to repaint your interior provided you return it to a neutral tone upon handing in your notice. 

Renting Disadvantages

Many favour the sense of security that comes with being a homeowner; however, as a rental tenant, you are essentially paying your landlord’s mortgage. Living in somebody else’s property means potential changes in your rental costs, and of course, your landlord is free to sell should they need to. That said, for fixed-term tenancies, landlords can only legally raise your rent if you agree. 

Signing a tenancy agreement invariably involves paying a deposit for your rental property - usually at the rate of one month’s rent. You are entitled to the full return of your deposit at the end of your tenancy unless your landlord uncovered reasons to make deductions, such as failure to keep the property clean or direct damage to the property.

One issue many renters come across is a lack of flexibility concerning pets. With the exception of service animals, many landlords can refuse pets living in their properties. However, some may use their discretion.

Buying Advantages 

Buying a home is often considered a significant life achievement, and many of us scrimp and save for the deposit on our dream home. Buying primarily offers financial security and a strong sense of home pride. Buying property safeguards your future - in the long-term, you could release equity to buy a second, larger home as your circumstances change or save for retirement by unlocking money tied up in your current property. 

Becoming a landlord by renting out your property can be an exceptionally lucrative commitment. Providing you jump through all the necessary legal loops, such as informing your mortgage provider, purchasing landlord insurance and procuring mandatory certificates - EICR report, fire safety check, etc. - you can turn an efficient profit on your investment. 

While rental tenants have freedom of movement, as a homeowner, you have the freedom to change your property as you see fit. From installing new kitchen units to knocking down walls to creating an open-plan space, you can create your dream property without being confined to rental standards.

Buying Disadvantages 

Buying a home comes with a lot of additional costs. Homeownership can rack up eye-watering sums - from saving for your deposit to repairs and maintenance. Significant financial commitments should not be taken lightly, so careful consideration and discussion are required before making any decisions. 

Buying a home as a couple can be a significant milestone in a relationship - it offers a secure environment to raise a family. However, in the unfortunate event of splitting up or divorce, equity is often split between you and your partner as you are tasked with dividing any shared assets. This can exacerbate divorce proceedings as both parties have the right to remain in the property until the financial Order is approved by the Court. 

Although it is a societal expectation to strive for your own property, many are not financially able to do so, particularly as the persistently volatile UK housing market changes.


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