If you’re looking to acquire your first residence, you’ll no doubt be weighing up the benefits of renting vs. buying a place in which to live. In truth, there are no simple answers; it depends on a number of things, including your lifestyle and finances.
Here, we weigh up the pros and cons to help you make an informed decision.
Rent vs. buying – the finances
In terms of cost alone, buying a home is unquestionably cheaper in the long run – assuming, of course, you can afford to do so. But in the short term, you’re typically better off as a tenant, especially if you don’t have enough for a mortgage deposit.
Assuming you do qualify for a mortgage, however, and are able to make a long-term commitment to a place, buying is an investment in the security of your future, with monthly repayments ultimately leading to outright property ownership. So you’re effectively paying yourself each month, rather than someone else’s mortgage. Additionally, of course, properties typically increase in value over the long term, so that you make a profit when you sell up.
According to Uswitch, rent on average is slightly higher in the UK than monthly mortgage repayments across homes of similar sizes, but tenants don’t have to pay for repairs or maintenance.
On the other hand, the initial outlay is generally smaller when you rent, even taking into account the two months’ rent in advance you’ll typically need to supply. Equally, you may be able to afford to rent a bigger place in a pricier area than you’d be able to live in if you were buying. At the same time, you won’t miss out should property prices dip.
As a tenant, you can sometimes find some or all of your security deposit is withheld when a tenancy ends. (However, modern deposit protection schemes exist to minimise this and keep any losses fair.)
Finally, bear in mind that while interest rates and property prices can rise, so can rents.
Renting: the pros
There are a number of added advantages if you decide to rent rather than buy, including:
· Move quickly: When you rent, you can often move in within days – there are no lengthy mortgage application or legal process to go through. What’s more, if you need to move for work or family reasons, or don’t want a huge commitment, moving on is relatively straightforward. A tenancy can be as brief as six months, followed by an ongoing agreement which you can leave with, say, just a month’s notice. So it’s all really flexible.
· No maintenance expenses: Obviously, your landlord will expect you to take care of their property. But maintenance costs are not your responsibility – nor will you have to pay for buildings insurance.
· Rent furnished: If you need a short-term rental, some places come with furniture, which could be another bonus. You then have less stuff to shift when you move on.
· Lower risk: If for any reason you become unable to afford a rental place, you’ll just need to find a cheaper option. You won’t lost out on your investment. Equally, if you’re moving in with someone you haven’t lived with before and ultimately things don’t work out, again the risk is less and you can just move on.
Buying: the pros
· Greater security: When you buy, as long as you keep up repayments, no one can take your home from you. If you rent, the landlord can decide to sell up, rent to someone else or move back in themselves. You could be given just weeks to find somewhere else to live. At the same time, buy and you have an asset which someone else can inherit.
· Greater control: Your home is yours to do what you want with, including major decoration and renovations which enhance value. Or you could choose to rent out a room to a lodger. You decide who does what work on your property, and when.
· Pay less over time: Assuming you have a capital repayment mortgage and interest rates stay stable, monthly repayments should reduce over time, as the balance you owe gradually comes down.
Renting and buying from Carter & May
Carter & May is a leading independent estate agent for Salisbury and the surrounding areas, and we cover buying and selling as well as lettings and rentals. We have the expertise, local knowledge and access to the latest tech to ensure we’re with you every step of the way for your next move, offering a service that’s uniquely tailored to your needs.
Book a valuation or get in touch today.