If you find that you keep asking yourself “Should I buy or rent my next home?” then you’ve landed in the right place.
We’ll take a look at current market trends and what pros and cons may be associated with both renting and buying, so that may make an informed decision as to what your next move will be.
So without further ado, let’s dive in.
What’s currently happening in the property market?
To start things off, a quick snapshot of the current property market, where the average asking price experienced a 1.5% monthly increase, reaching £368,118, and average rents now lie at £1,273 pcm (+0.9% up from last month) with variations across all UK regions.*
With this in mind, we’re here to help you on your property journey – whether you choose to rent or buy your next home. Read on for a list of some pros and cons associated with renting and owning.
What are the pros of buying a home?
- Security – buying a property offers you a level of security and independence, as you’re not reliant on another party, i.e. a landlord.
- Additionally, you’re more in control of your costs and outgoings and not reliant on a landlord increasing your rent.
- You can decorate your home as you please (within reason where it’s a leasehold property).
- Even if you change your mind, you have options. You can sell up or turn your property into a rental property and supplement your income.
- Investing into bricks and mortar has historically been a safe investment that, over longer periods of time, increases in value. Since 1980, UK property values have increased by 1,392%.^
What are the cons of buying a home?
- Buying a property is a big financial commitment. Especially when considering the size of the deposit needed, you may feel that the initial cost outweighs the benefit.
- You’re responsible for any repairs and additional costs that are required to maintain a safe living space.
- Although bricks and mortar tend to be a good long-term investment, in the short term you may experience market volatility or face higher mortgage rate payments, depending on the type of mortgage deal you secured when buying your home.
What are the pros of renting?
- You can choose who you want to live with – from sharing with friends and loved ones to living by yourself.
- There are few additional costs, as maintenance and repairs aren’t your responsibility. Additionally, if you rent a property where bills are included, you may also have an easier time budgeting.
- You have fewer upfront costs with lower financial risk.
- Renting often means that you can live in a location in which you may not usually be able to afford to buy.
- You have more flexibility. According to Rightmove, 42% of renters wanted to move to a different city, which is 37% more than last year and 28% up from February 2020, exemplifying the flexibility that’s often associated with renting when compared to owning a home.** By renting a property, you have the freedom to be able to move to a different location fairly easily and quickly.
What are the cons of renting?
- The increasing cost of living, rising inflation and, as aforementioned, the rising cost of rents may create greater financial pressure, potentially requiring you to make changes to your lifestyle, e.g. downsize or move location to accommodate the increased costs in your budget.
- Many rental agreements set out an initial period without a break clause, meaning you’re tied in for a set amount of time. Additionally, once you’ve reached the end of your tenancy agreement, you may be faced with the insecurity of not knowing whether you can extend your contract and/or if your landlord chooses to sell the property.
- By far, one of the biggest negative points for many individuals is the fact that, when renting, you’re spending rent money that could be going towards your own mortgage.
