Deciding to rent or buy a house is a huge life decision with many factors to consider.
What you choose to do now could have implications in the future, so it is important to take the time to carefully weigh up these options and make the right choice for you.
Flexibility or stability?
One of the key questions you need to ask yourself before deciding to rent or buy, is how long do you plan to live in the house? Renting can be an economical and cost-effective option if you require flexibility. For example, if you wish to travel around or explore different cities, renting is more suitable. It makes no sense to save up a large deposit to buy a house if it will be short term accommodation.
However, buying is the sensible option if you plan on living there for years. Buying grants you stability that is not guaranteed when renting, as most leases are short term. Furthermore, the landlord owns the property and so they can sell at any time. Therefore, you cannot be sure when you may receive notice that you have to move.
Responsibility for the property
Arguably, the biggest advantage of renting is that the landlord is responsible for any maintenance that needs to be carried out on the property. This removes the hefty financial burden of having to pay for repairs, which can be both sudden and expensive. However, there is a downside to this. As you do not own the property, there are limits on what changes you can make to the house and you may have to gain permission for them. If you own a house, you have the freedom to take on any decorating or home improvement projects you want.
One of the most significant factors to consider is how buying or renting will affect your financial situation. Renting drastically reduces the requirement to save up for a large deposit. It also removes the need to pay maintenance costs, making it by far the cheapest option in the short term.
However, buying a house is an investment in the future. Every mortgage payment goes towards your home rather than just being ‘dead money’ paid to your landlord. If you stay in the property for a long time, you can pay off your mortgage and have no further costs. This makes buying the better option for a permanent home if you can afford the upfront costs.
If the initial cost is overwhelming, you may want to look into schemes such as Help to Buy. This may enable you to buy a high-quality new build home, such as those available from Muir Homes, which have a number of developments available through Help to Buy – certainly an option if you would rather buy new.
You could also consider buying a home through shared ownership, whereby you would buy a share of your home and pay rent on the rest. You can then buy more shares once you’re the owner – the price of these shares would just depend on whether property prices have gone up or down in the area.