Should I rent or buy a house?

To buy or not to buy? It’s a tough question and the answer can change dramatically depending on your circumstances.

Ultimately, you need to make the decision based on affordability, commitment, location and a number of other factors. But if you do need a hand making your mind up, we’ve pulled together the pros and cons of each, as well as some tips to help you answer the million-dollar question.

Buying a home
Home ownership brings a number of benefits, such as a sense of stability, belonging to a community, and a pride of ownership.

To buy a house you will need:
• Six months’ worth of expenses, including bills and mortgage payments set aside in a savings account
• A good credit rating to get access to the best mortgage deals
• At least 10 per cent of the deposit amount set aside
• To be able to commit to paying a monthly mortgage without any large debts outstanding

Buying a home is a long-term investment and can work out cheaper than renting over the term of a mortgage, which is normally between 20 and 25 years. Plus, once you’ve paid off your mortgage, your home will be yours and you won’t have to worry about paying for somewhere to live.

As you own the house, you are free to decorate and style your home however you like. You can also add value to the property through home improvements and upgrades such as building an extension.

But, this also means that as a homeowner you are responsible for your own maintenance costs. This could be anything from paying a fee to call the plumber out if you have a problem with your shower, to shelling out thousands of pounds to fix a leaking ceiling.

As well as maintenance, there are some other factors which may put you off buying a house, such as:

• You could suffer from negative equity – this is when the value of the property falls below the level of the mortgage that you took out to buy it, and you end up owing more than you paid for it
• If you get a joint mortgage with a partner or spouse and separate, it can be complicated to sell the property
• Interest rate rises can increase your monthly mortgage payments
• There are financial consequences if you fall behind on repayments, like getting into debt
• If you fall too far behind on your mortgage, you could face bankruptcy, or your home being repossessed.

Renting a home
Renting a property is a great alternative if you aren’t wanting long term commitment, for example, for example, if you move around for work.

Finding and renting a home is usually quicker than the process of buying, so if you are wanting a place to move in quickly, it can be a very good option for you.

Tenancies can be as short as six months and you can move after this time if you want or need to. Being able to give notice to vacate gives you the flexibility to move to a different type of property, to a different area (or country!), or move in with someone else. Moving out of a rented home can often be quicker than selling a property, which is useful in situations of relationship breakdowns or sudden changes to circumstances, like a job loss.

Renting can also be a handy way to test a new romantic relationship or living with friends. You may also be able to rent a bigger home in a nicer area than you could afford to buy.

Plus, if you rent a furnished property, you won’t need to spend a fortune buying items like sofas, tables and appliances – they’re included in the cost, and there for you to use for the duration of your tenancy.

The expense of maintenance costs isn’t yours, meaning you are not responsible for the likes of a broken boiler, which makes it easier to predict your monthly costs.

However, there are some factors which may put you off renting a property, such as:
• You will be making large monthly payments to your landlord, not towards owning a home
• The landlord can change the price of the monthly rent at anytime
• The landlord may decide to sell the property, meaning you will have to find somewhere new to live
• You won’t build equity
• Improving or changing the property could increase its price, but this only benefits the landlord
• You have to ask to make any changes to the property as you don’t own it

How to decide whether you should rent or buy
It depends on your financial and personal circumstances on whether you should rent or buy a home. To help make up your mind, ask yourself the following questions:

• Do you have enough money to pay for a deposit, as well as the other upfront costs of buying a property?
• How long are you planning on staying in this home?
• Are you living alone or with someone else?
• Do you earn enough to afford a mortgage?
• Are there any reasons why you may be turned down for a mortgage, such as poor credit?

We hope this has helped you understand the positives and negatives of renting and buying, and given you some tips for choosing which path is right for you.

Ultimately, it’s important you choose the option that best fits your circumstances and budget – but whatever that is, are here to support you.

If you need any help finding your dream home, get in touch with our team, or head over to our Facebook, Twitter and Instagram pages for more tips and tricks.