Having just gone through the whole rigmarole of renewing our mortgage deal, sometimes you have to ask yourself if it’s even worth the hassle? This rate, that rate, this charge, that charge. It goes on and on. In the UK, around 4.9 million adults still live at home with their parents, which isn’t hard to believe given the housing market and economy we live in right now.
If you’re part of this demographic, and you’re thinking about moving out on your own, then there are two main options to consider. You can either live in a house that you own, or you can rent one. Each of these approaches has its own distinct set of advantages and disadvantages. Let’s have a look at a few of the more obvious ones.
Financial Considerations
To begin with, it’s worth thinking about money. Compare the amount that you might pay in rent with the amount you’d put up for a mortgage repayment, and then compare the quality of the accommodation you’re going to get. Of course, it’s also worth thinking beyond your monthly expenses, ensuring you have savings for when things might go wrong or you want to make home improvements. When you make payments toward a mortgage, you’ll ultimately end up buying the asset provided you’re paying capital off the mortgage, and then never having to worry about paying for it again. When you’re renting, this day will never come.
Mortgage providers, however, do tend to ask for a substantial deposit upfront. This is probably the biggest barrier for many would-be homeowners. This is a vicious cycle because those that can afford substantial rent amounts won’t even be considered for a lesser mortgage payment because they don’t have an up front deposit. Yet, they can’t save for said deposit because they’re paying over-the-odds rent!
Put simply, you’ve got to be able to afford it… and then some!
Lifestyle and Flexibility
When it comes to flexibility, rented accommodation tends to be preferable to the alternatives. If you need to relocate in a hurry, then you’ll be able to do so without having to go through the process of selling a home. This might make it preferable for people who don’t want to set down roots in a given area.
On the other hand, if you own a property, then you’ll have a different kind of flexibility to enjoy: you’ll be able to easily customise it to suit your needs. If you want to hang up a picture, paint the walls, or install a new boiler, then you’ll be able to easily do it as lots of landlords won’t allow you to make it ‘homely’ to you.
Legal Rights and Responsibilities
If you feel that your rights as a renter are not being protected, then you might take legal action against your landlord. For example, if you find that the boiler is broken and the landlord is refusing to replace it, then you might pursue housing disrepair claims to force the issue. Make sure before doing this, however, that you’ve made every reasonable attempt to raise it outside of court.
Also make sure you have a good contract in place and try and keep good relations with your landlord, it all helps!
Market Trends and Economic Factors
Deciding between renting and buying might also mean paying attention to the state of the housing market and what effect technical changes related to taxation and regulation might have. For example, the current Labour government is committed to a significant overhaul of renter’s rights in the UK. This will, among other things, remove the right of landlords to evict tenants without giving a reason, under the current section 21 procedure. Support is also being made available for first-time buyers, in the form of an easing of mortgage rates, which would get more of them onto the property ladder. Changes in stamp duty are being brought in, however, that will ultimately drive up the cost of owning a home.
Do you rent? Would you be able to buy? Would you even want to? What do you love about your housing position?