Rising inflation has meant rising costs for both homeowners and renters, with mortages getting more expensive, and the average rent in the UK jumping by 5.1% in the year to June 2023.
For those waiting to get their first step on the property ladder, it can be hard to know; should I buy, or should I rent?
RENTING
The Pros
- A tenancy can be just six months and you can move after this time if it doesn’t work for you.
- Being able to give notice to vacate gives you flexibility to move to a different type of property or to a different area.
- Moving out of a rented home can often be quicker than selling a property, which is useful in case a relationship breaks down. Renting can also be a handy way to test a new relationship.
- You don’t have to worry about maintenance costs, meaning you are not responsible for the likes of a broken boiler.
- If you rent a furnished place, the furniture and white goods are thrown in too.
- Getting on the rental ladder is substantially easier, quicker and cheaper than buying a property.
- You don’t have to pay a mortgage or legal fees and stamp duty.
- You don’t have to worry about house price movements.
- Landlords and letting agents can no longer charge admin fees thanks to a law introduced in 2019
The Cons
- Big upfront costs to pay when you move house, which can include a deposit and your first month’s rent. In England and Wales, the deposit is capped at five weeks’ rent. This rule doesn’t apply in Scotland and Northern Ireland.
- Your landlord might decide to increase your monthly rent when your lease is up for renewal.
- No control over organising maintenance of your home so repairs can take longer than you would like.
- If your landlord decides to sell the property, you’ll need to uproot your life and find somewhere else to live.
- Renters sometimes find themselves battling with the landlord to get their full deposit back.
- You are paying rent to your landlord, essentially paying their mortgage, rather than your monthly payment going towards owning your own home.
- You can’t redecorate without the approval of your landlord.
- Rising rental prices are going up making it harder to save for a house deposit should you want to buy.
BUYING
The Pros
- You will have the security of a home without the risk of a landlord deciding to sell, or opting not to renew your contract.
- You can decorate your home without needing to ask for permission.
- You have control over organising repair works which might be done quicker than if you were renting.
- Once you have paid off your mortgage, you will own an entire home.
- While you should think of it as a home rather than an investment, if property prices increase then you will benefit when it comes to selling it.
The Cons
- Saving for a deposit is hard work and takes a long time, particularly as house prices are rising which makes it more expensive. Some studies suggest it can take almost 10 years on average for someone to build up a 15% deposit.
- You have to pay mortgage and legal fees and might have to fork out on stamp duty too.
- If repairs need doing, you have to foot the bill.
- Homeowners are subject to the housing market and price movements. If the value of your home drops below the mortgage you secured on it, you will be in negative equity. Unless you have savings you can use to plug the difference between the value of your home and the mortgage, it will be tricky to remortgage or sell the property.
- Even if house prices don’t head south, the market can be sluggish. It can take months to sell a property so you can’t just move at a moment’s notice.
- Interest rates are increasing, gradually pushing everyone’s mortgage payments up too.
Our mortgage and financial advisor, Suzanne King, is on hand to provide tailored and personal advice based on your circumstances and set you on the right path to owning your first home. Get in touch with Suzanne here.
If you're looking to buy please make sure you register your interest early, plus keep an eye on our Facebook and Instagram stories for sneak peeks of the properties we have coming to market soon!
Postcode areas we now cover;
CF15, CF37, CF38, CF39, CF44, CF45, CF72
Posted on: 8 September 2023
