Mortgages Vs Renting

The Disadvantages of Buying a Home:

Enormous initial costs...

It's estimated that the average deposit payment required for buying a UK home is now between £40,000 and £50,000. This is the kind of money most people simply do not have.

Repairs and maintenance...

When you rent a property, it is the responsibility of the landlord to organise and pay for all essential repairs and general maintenance. When you own a property, all such responsibilities and expenses fall with you.

Commitment...

Buying a home is perhaps the biggest commitment most people will make during their lifetime. If you change your mind about the type of property you live in or your location, it's not quite as easy to switch to another home as it is when renting.

The Advantages of Renting a Home:

Minimal initial expense...

While it's usually necessary to pay a deposit before moving into a rented property, it's not nearly on the same scale as a typical mortgage deposit. In addition, if the property needs any repairs or refurbishments to bring it up to scratch, it's the landlord who pays for them.

Flexibility...

A general tenancy agreement will run for one year, after which you have the opportunity to stay where you are or move elsewhere. This can be useful if you haven't yet decided where you want to live, or if there's a chance your job/career could make it necessary to move in the near future.

No depreciation risk...

Buying a home means accepting the risk that its value could fall, just as it could rise. When you rent a property, there is no risk of depreciation whatsoever, given that it isn't you who owns the property you live in.

The Disadvantages of Renting a Home:

Their house, their rules...

?Throughout your entire period of tenancy, you will be bound by whatever rules and restrictions your landlord decides to implement. As a result, it may never feel as if it is truly your home.

You're paying their mortgage...

Surprisingly often, monthly rental payments made by tenants vastly exceed the monthly mortgage payments they'd need to make to buy a similar property. As a result, this technically means you're paying the landlord's mortgage on their behalf, without benefiting from any equity in the property whatsoever.

An uncertain future...

Last up, landlords are (to a degree) free to alter the terms and conditions of their tenancy agreements in any way and at any time. They've also the right to terminate tenancy agreements for a variety of reasons,or simply refuse to renew an agreement after it expires. All of which adds up to a somewhat uncertain future for the tenant.

In Summary...

If you have the option of buying or renting and can't decide which way to go, it's worth consulting with an independent adviser. Establish a budget, consider your priorities (immediate and long-term) and carefully evaluate the pros and cons of both.