With the property market increasing by a whopping 12% in 2021, home owners are reaping the benefits of seeing significant increases in the value of their homes. It’s estimated that 86% of people in the UK want to buy their own home, however, buying your own house isn’t for everyone. Here we take a look at buying v letting – the pros and cons of each.
Buying your home
- You have ultimate security and freedom. You own your own house and no-one’s going to tell you what you can or can’t do in your own home.
- You can decorate it how you want to and furnish it to suit your exacting taste and lifestyle.
- You can make changes internally and externally to the house with extensions or floor plan layouts.
- You don’t have to deal with unreasonable Landlords who won’t do repairs, or may increase the rent frequently.
- You can’t be made to move out, providing that you’re up to date with your mortgage payments.
- Buying your own home can actually save you money. When interest rates are low and the property market is buoyant, you’ll see an increase in value with lower mortgage repayments. If you have a fixed rate mortgage, then the rate will continue to be relatively low for a fixed period of time.
- You can build equity in your property over the years, which could become your pension or savings plan if you’re thinking of downsizing when you retire.
- Buying your own home usually requires a substantial amount of upfront money. This comes in the way of deposit as well as the actual buying costs of mortgage arrangement fees, conveyancing fees and stamp duty paid to the Government on purchase. The larger the deposit, the better mortgage rate you’ll get. With the average property price in the UK now upwards of £250,000, even a 10% deposit will cost £25,000!
- If you have a house to sell, you’ll need to factor in the selling costs as well as the buying costs.
- As opposed to renting a property, you’ll be responsible for all of the repairs and maintenance of your home, which, over the years, could be substantial.
- Owning your own home is a big financial commitment. In fact, owning a house is probably the biggest financial commitment most people make. You can’t just run away from it!
- Mortgage repayments can become a burden, particularly if your financial situation changes, or interest rates increase.
- House prices can go up as well as down. If the property market declines, so will the value of your home. And if you can’t sit and wait for the market to turn round before you move, you’ll have lost money on your financial commitment.
- Renting a property can be more beneficial as the upfront costs are less. You’ll probably have to pay the first and last months rent and a security deposit upfront, but these costs are significantly less than a deposit to buy a home.
- Any repairs or maintenance that’s required is the responsibility of the owner, not the renter. So, if the boiler breaks down or the toilet leaks, the Landlord is obliged to repair them at his/her own cost, not yours!
- If your job means that you have to be flexible on your location, renting makes it easier to relocate without the constraints of selling your home before you move.
- When you rent a property, you won’t gain in any potential financial growth if the property market increases. Any increase in equity will be the owners, not yours.
- Your landlord could increase the rent without any notice, which could become difficult to budget for.
- Equally, the landlord could give you notice to move. There are laws surrounding the minimal amount of time given as notice to move, but if you’ve got a family or have been resident in the property for a long time, chances are, it’ll be stressful and difficult to find another suitable dwelling.
So, in conclusion, there are pros and cons to both buying and renting a property. It really depends on your circumstances – financial, employment and future plans. If you need any advice or help when considering whether to buy or rent your next home, take a look at our website ashgroveonline.co.uk or give us a call on 01452 690 870. We’d be happy to help!