To rent or to buy? It can be a tricky decision for some. The costs involved in buying can be too steep for a lot of people, but others may see it as an investment. So which is the cheaper option?
The pros of renting
When it comes to renting, it can seem like the more affordable option. You'll mainly be responsible for your rent, bills and council tax. The good thing is that if your boiler breaks or another disaster, you won't be have to front the cost, it'll be up to your landlord. There are lots of other pros to renting as well, such as:
It can be easier for those who can’t afford to save up a huge deposit for a mortgage
your landlord should be responsible for dealing with any repairs that are needed
the process of renting is a much quicker process than buying
you may be able to rent in an area that you wouldn’t necessarily be able to afford to buy a house
you won’t be tied to a location, so if prices change you could move somewhere more affordable more quickly.
The cons of renting
The main thing that puts people off renting is the feeling that the money they pay in rent will be an investment for someone else, which they could be putting towards a home of their own. There are other cons to renting such as:
if your landlord decides to sell the house, then you’ll have to move out
you’ll still have to pay an upfront deposit, which could be a few hundred pounds or more
you won’t usually be allowed to make changes to the property, such as painting and decorating
if your landlord does let you make improvements to the property it will only benefit them in the long run
your landlord can decide to increase your rent.
The pros of buying
The most attractive part about buying, is that you’ll have full control over your home and be able to make improvements whenever you feel like it. Other pros to buying a house include:
your monthly payments go towards investing in your own home
once the mortgage is paid off you’ll own your home outright which will lower your living costs later down the line
any improvements you make can add value to your home should you come to resell
if you sell your house later down the line you could make a profit
your family could inherit your property.
The cons of buying
The most obvious downside to getting on the property ladder, is how expensive the process can be. There are a lot of fees involved before you even start living in the property, and these can stack up.
The main costs include:
the deposit – a deposit on a house is usually 10-15% of the cost of the house.
stamp duty– this is tax you pay when buying a property, but it is currently only applicable if you are buying a property that costs £500,000 or more.
It could be that in the long run, buying may be cheaper as it’s an investment. What you pay towards your mortgage and any money you put into your home, are likely to help the property build in value should you come to resell.
When it comes to it, location and the type of property you buy are a huge factor in the cost.
Renting can be more affordable when it comes to the monthly payments, but again, it depends on where you live – and you won’t get a return on what you pay in rent.