The British culture is very much of the opinion that owning a house is the best thing anyone can do. We grow up with this idea implanted in our minds, and it’s something many young — and plenty of older — people are keen to do. The idea of ‘getting on the property ladder’ occupies a lot of our time, and we sacrifice a lot for the privilege of having a home to call our own.
Yet just because there is this idea, and just because it is such a deep part of our psyche, does that mean it’s the right thing? The truth is, although some people will certainly benefit from owning their own home, just as many probably wouldn’t do so well out of it, and renting would be a much better option.
If you are on the verge of buying a property, whether it’s your first or you’re simply moving house, why not stop and consider things for a moment. Why exactly are you buying somewhere to live, instead of opting to rent like many of our continental cousins prefer? Is it because it’s what you’ve always expected to do and what society considers to be ‘best’? Or is it because the benefits outweigh the negatives in your own personal situation?
Read on to discover what some of the pros and cons of buying a house are so you can make an informed decision that’s right for you, rather than one that looks good to the outside world.
Advantage — It’s A Long-Term Investment
It’s always good to have some money put away for your retirement — the state pension won’t usually cover everything you need to pay for, and a private pension, although useful, will still mean you have to look carefully at your expenditure. It can be worrying for those who don’t have any property to fall back on, but if you do own a property, then it can be the ideal way to enhance your retirement and your pension, and it might even be an excellent way to help your children out, should you have any.
This is because property has always been considered a long-term investment. A mortgage — if you can get one — over 25 or 30 years (or even longer in some cases) means that by the time that borrowing is paid off, not only will you have the equity in the house to do whatever you want with, but you’ll also have an additional amount on top because house prices will have risen during the time you lived in the property. If you can stay in one place for the entirety of your working life, then by the time you come to retire, your property will be able to cover all costs and give you plenty of money to enjoy later in life. Having this security is something that can help greatly and is undoubtedly an advantage. Of course, house prices don’t always rise. But you will have your equity available at the very least, and over 25 plus years, you’re likely to make a profit.
Advantage — Yours To Enjoy
When you rent a property, there will always be something in the back of your mind; it’s your home, but it’s someone else’s house. This essentially means that, although you’re living there, you might never feel entirely comfortable, and, of course, you can’t do what you want with the place when it comes to décor, extensions, or any other major changes – if you do, you’ll need to get permission first. That permission might not always be granted.
Some landlords will be willing to update a property, put in a new kitchen or bathroom when needed, and landscape the garden if required, but many will not. As long as they get their rent, there is no need for them to spend any additional money. Plus, if the tenant wanted to make changes — including large ones — and was given permission to do so, who would benefit? It might be the tenant in the short term, but it’s the landlord who would gain most in the long term.
When you own a property, it is yours to enjoy in whatever way you want to. You can change the carpets, the wall coverings, the doors and windows, or anything else whenever you feel the need to. You can add a conservatory or transform your garage into an office or anything else (subject to planning permission if required) that your budget allows for. There is much more freedom, and you will generally feel much more at ease and ‘at home’ in a property you own.
Advantage — Greater Stability
No matter how much you might like your rented home, there is never complete security with it. You could be asked to leave at any time, and the landlord would be well within their rights to do so — they don’t have to give you a reason, and it might just be that they want to retire and are selling the property to release the money (an advantage of owning property, that we’ve already mentioned). In other words, no matter how much you might want to settle somewhere, there is always the slight worry that you might have to move on before you choose to.
When you own a property, as long as you keep repaying your mortgage, you will be able to live there for as long as you want or need to. There is no reason to leave if you’re comfortable and happy, and since stability in life can be a great asset when it comes to your positive mental health, being able to know you always have a home to go to and being able to relax within it completely is a wonderful thing.
Not only can you feel more stable in terms of where you live, but you can also have greater financial stability. Rents can — and usually will — go up, if not every year, then certainly every two or three years. Your mortgage won’t change if you have a fixed rate, and even if it is variable, it will be a much smaller rise than a change in your rent might be. This means you can plan things for the future much more easily, since you’ll know exactly how much money you’ll have.
Disadvantage – High Upfront Costs
Buying a house is an expensive business, there is no doubt about it. From the deposit (usually 10 per cent of the asking price — although some mortgage providers will allow five per cent, and there are various government-backed schemes for first-time buyers that also offer a five per cent deposit option) to the stamp duty, to the solicitors’ fees, there is a lot to pay out in advance. This can cause many problems for those who would like to buy a property and is one of the main reasons they will opt to rent instead — those upfront costs are too much.
There are ways to mitigate these costs, of course. You can search for excellent law firms to help minimise the legal fees. You can add mortgage fees and stamp duty to the mortgage itself (in some cases). And you can negotiate a good price to buy the property. However, the problematic deposit is still an issue, and considering this would be between £15,000 and £30,000 for a £300,000 house, it’s a lot to save up for. Compared to renting, which usually only requires a five-week deposit and the first month’s rent upfront, it’s a huge cost to bear that many just can’t afford.
Disadvantage — Less Freedom
We mentioned that one of the advantages of owning property was the freedom it affords you to make changes and do what you want with the house. However, there is more than one type of freedom, and one that you will lose if you buy a house is the ability to move around wherever you want to. Once you have a mortgage, you are tied in for at least a year and often many more, depending on the type of mortgage you have. Plus, if you want to sell your home and buy another, it’s a long-winded process that can take many months, and unless you have gained any equity, you might find you’re unable to do it — mortgage companies won’t want you to sell if you owe more than the house is worth, as they won’t get their money back.
When you rent, you can move whenever and wherever you want. This kind of freedom will suit some people perfectly, and it makes them feel much more comfortable than being tied to one property for life (or at least a long time). If you have to move for work or just like seeing other parts of the country, or trying out different property types, renting is the best option for you.
Disadvantage — Maintenance Costs
Buying a house is expensive, that’s true. But so is owning a house. As well as the mortgage repayments, there is also the council tax, and the utilities you’ll need to pay for any maintenance required. This can be anything from something small like a leaking tap to something much bigger, like the boiler breaking down. These are costs that you may not have factored into your budget, and the extra payments you need to make can be problematic, and the disruption caused can be upsetting.
When renting, these issues are usually the landlord’s responsibility and, apart from informing them at there is a problem to be solved, you won’t have to concern yourself with them. If you prefer not to get involved in household maintenance and you like the idea of someone else dealing with (and paying for) it, then renting would be better than buying for you.
