High mortgage rates may have put your plans to buy a property on ice in the last year or two, forcing you to continue to rent instead. Or it may be that buying hasn’t suited your life plans before and you are now reconsidering your stance. As interest rates fall and mortgage rates look set to follow you might be wondering whether it’s worth buying now, especially with rental prices so high. How would your mortgage costs compare to renting?
There isn’t an easy answer. You need to think long and hard before you commit to such a purchase, since it will tie up finances and your plans for the future.
Pros for buying
1) Your money is earning for you
Buying gets you on the housing ladder and means that your money is actually paying towards you owning a property rather than just disappearing into a landlord’s pocket. You’ll gradually build equity in the property as its value rises and your mortgage decreases.
2) Greater surety of the future
When you are renting you are at risk, while Section 21 is still in place at least, of eviction at any time with the required notice given. That means that you’re never 100% sure that you can settle. When you own your own home, you are in greater control of your own destiny. It also means that the landlord can’t increase the rent, although you will be subject to changing mortgage terms as you move deals during your repayment period..
3) You can do what you want with the property
Want to paint the walls fuchsia pink or knock through most of the walls to create a huge open plan space? Go ahead if you own your own property. If you are renting however, structural changes are a massive no-no and even painting a wall would require clearance from your landlord before you go near a brush.
Cons for buying
1) Large deposits required
A few weeks’ rent as a deposit is easy enough to pull together for a rental property. Pulling together the cash you need to purchase a property – usually at least 10% of its value - is a whole different ballgame. It will require some savvy saving and more than likely a handout from the bank of family, too if they are willing to oblige. Recent research suggested that buying with a capital and interest mortgage is currently 11% more expensive nationally than renting so you need to do your sums carefully.
2) You’re responsible for repairs
When renting it’s your landlord who is responsible for repairs and maintenance of the property. If something goes wrong, such as a boiler breaking down or a roof leaking in your own home, it’s up to you to deal with the stress and expense of getting it fixed. Bills can run into thousands, so your finances have to be able to withstand the shock of unexpected costs.
3) It’s less flexible
Bored with an area and fancy a change? Or maybe you’ve got a new job and need to move fast. Or perhaps you’ve fallen head over heels and are following your beau halfway across the country. When renting, this is easy enough to do but when you’ve bought you are far less flexible in being able to move when circumstances change since it will take time and expense to sell.
The final decision is yours
Ultimately, the final decision on whether to buy or to continue renting is yours. There are advantages to both – however it’s only with buying that your money can actually be an investment rather than thrown away, so we’d say ‘yes’, it is worth buying, provided that your circumstances and finances allow.
For more information on how we can assist you on your sales journey, please contact one of our branches in Essex, London or Hertfordshire today. We also offer a free and instant online valuation to give you an idea of how much your home could be worth on the current market.
