Most people you ask see renting your home as a waste of money. If you are younger and your parents are Homeowners then the chances are they might encourage you to look at first time buyer mortgage advice, and take that leap to buy if you can afford it.
Times have definitely changed though and many more people rent now than in the past. Here we will delve into the pros and cons of buying a home.
The property market goes in cycles and no one ever knows for sure if a boom or crash is around the corner. It’s really disappointing if you buy a property and it goes down in value.
This has happened to thousands of UK Homeowners over the years, but history suggests that even if you buy at the very peak of the market as long as you can afford to keep the property eventually prices tend to go back up.
Just look at Sold values from the period of the Credit Crunch. That was one of the worst economic periods of our time yet less than a decade later UK property values for first time buyers had reached a new all-time high.
You could also lose money if you are forced to sell your home at the wrong time, for example, due to a relationship breakdown or reduction in your income.
You should discuss all possible eventualities with your mortgage advisor (and family) before committing to a purchase so you can ensure you are as well protected from some of these things (such as being unable to work due to illness) as possible.
That said, we are talking about a Home here not simply an investment and the most important driver is finding a suitable one for you given all of your circumstances.
Often mortgage payments will be cheaper than rent. Interest rates go up and down which means your mortgage payments can go up and down too.
If you are worried about that then you should take out a fixed-rate mortgage, so your payments remain the same for a set period of time. On the other hand, rents either stay the same or go up – it’s unusual for a Landlord to reduce your rent.
Some people feel that owning their home creates a more stable situation for them and their family. No one can force you to move from your own house if you don’t want to (assuming you can afford your mortgage payments).
Whilst you do have some protection as a tenant in terms of how much notice your landlord needs to give you, if they want the house back there’s not much you can do. This is not ideal, especially if you have family or work nearby or you have children in a local school.
Sometimes Landlords give their tenants the first refusal to buy the property if they are selling it so they can save on Estate Agents fees.
Renting can be more flexible than owning. There’s nothing to stop you from giving your Landlord notice to leave if you get a job offer in another area for example. This is not as easy as a Homeowner.
You will have to decide whether you want to rent out your home or sell it. The process of selling a home and buying a new one is time-consuming and expensive.
If you think you may not be around in a particular area for very long you should consider whether it’s worth buying. Buying somewhere should definitely be viewed as a long-term investment.
As a tenant, your landlord should be responsible for any major repairs. Some Letting Agents and Landlords are better than others when it comes to repairs however and even if you are renting you might end up doing some minor maintenance of the property yourself.
If you are a Homeowner then all this is down to you, as is insuring the property which will be a condition of any mortgage you take out.
Contrary to what some people might say, owning your own home is not for everyone. If you are young and moving in with your partner for the first time there’s nothing wrong with renting for a while.
Things don’t always work out the way we plan, and it can be really hard to get removed from a mortgage.
Buying a home is an enormous financial commitment and everyone should consider all the options before diving in. If you decide to rent though it may take you much longer to save up for a deposit.
Ultimately, in the end most people end up deciding they would prefer to buy than rent. Whether you are renting or paying a mortgage you are making monthly payments to live somewhere, and most would rather see this go towards their own benefit than someone else’s.
It’s sometimes just a case of getting your timing right and also being in the right financial position to be able to proceed.
If you are looking to purchase your first property, please don’t hesitate to contact us for first time buyer mortgage advice.