This can be a dilemma for some people. Many think that buying is always the best decision and that paying rent to a landlord is 'dead' money. But buying isn't necessarily the right choice for everyone. For some people it can be a mistake.
Should I rent or buy a property?
The pros of buying
- you're buying an asset which can increase in value over time
- you have the security of living in your own home for as long as you want to stay
- you can do what you like with the property in terms of decorating, extending and renovating
The cons of buying
- having a mortgage is a huge commitment - you have to keep paying a mortgage for many years or face losing your home
- getting a mortgage can be difficult
- houses are expensive your home might go down in value after you've bought it, even to the point of becoming worth less than you owe on your mortgage (negative equity) saving a deposit takes a long time doing any work on your home costs money
The pros of renting
- your employment situation might be uncertain or you might need to relocate
- you can move around without the expense of buying and selling
- you're not sure about your current relationship and might need to be flexible about where you live
- it gives you the opportunity to discover a new area before deciding exactly where to buy
- you might be able to rent in an area where you couldn't afford to buy
- the landlords pays for building insurance, maintenance and repairs
The cons of renting
- you pay rent to a landlord every month and this can go up
- your landlord can ask you to leave at the end of the lease
- you can't make changes to a place you rent
- you probably have to pay fees to a letting agent
First time buyers
People trying to buy their first home are in a difficult position. You have to save up a deposit before you apply for a mortgage but this can seem impossible if at the same time you're having to pay rent.
To get going, look at our guide on saving for a deposit.
Additional costs of buying your first home
- As well as the mortgage, there are one-off charges and expenses you'll face when you are buying your first home. These include:
- mortgage arrangement fee
- valuation fee
- legal fees
- stamp duty
Some mortgage deals pick up some of these costs for you.
There're more details in our guide the cost of buying a house (Link).
Buying a house if a life changing event. It can mean security and freedom for you and your family, just so long as you can keep up with the mortgage payments.
Always make sure you don't overstretch yourself because, if you can't keep up with the monthly mortgage payments, then your house could be repossessed.
Banks won't lend you more than they believe you can afford to repay. But don't rely on this as confirmation that you can afford the mortgage.
Be honest with yourself about how much you can afford. Be realistic when you work out how much money you want left over for spending on yourself.
You can also speak to one of our mortgage advisers. They are happy to answer your questions and give any help they can. There is no commitment and no charge. Our service is fee free.