LETTING & ESTATE AGENT

Should I rent or buy? Working out what is best for you

Should I rent or buy? Working out what is best for you
Speak to anyone from the Baby Boomer generation and they'll tell you that buying a home is the best investment you can make.

But getting on the ladder, particularly for those born into the Millennial generation, is not as easy as it once was. This has fuelled a generation of renters, many of whom firmly believe renting is the future.

So, what is the verdict? Is it better to rent or buy?

We've been running the rule over the pros and cons of both here at Martin & Co Camberley...

RENTING IS FLEXIBLE

Baby Boomers, those born post World War II until the mid-60s, were very much a generation who worked in the same job for life, bought a home, got married and had kids.

Millennials, those born largely in the early to mid-90s, simply don't have that kind of stability in their lives any longer.

Flexibility is everything to those in their 20s and 30s and renting certainly provides that.

Being able to move quickly when a new, more lucrative job becomes available could mean the difference between getting ahead and getting left behind in today's fast-paced industries.

Buying and selling property is a long process, whereas renting under six-month rolling tenancies, for instance, is far more appealing to those with their eyes on the next prize in industry.


BUT YOU ARE PAYING OFF SOMEONE ELSE'S MORTGAGE

Yes, you are. As well as helping to secure your landlord's pension pot for retirement.

There's no doubt that buying a home can provide that nest egg for the future - particularly given the growth of property prices over the past decade.

By owning your own home under the terms of a mortgage, you are paying your way towards owning a property outright. Not to mention benefiting from capital growth in a buoyant market.

That said, prices can go down as well as up and with many first-time buyers holding little in the way of equity in their homes, a crash like the one we witnessed in 2008 could see many fall into the dreaded realms of negative equity - making selling up impossible.


RENTING IS A QUICKER PROCESS THOUGH

Buying a home, for all of its financial and security benefits, can be a slow process. The average time for a sale to go through is around 16 weeks. This is largely due to backlogs on local authority searches, but also long sales chains and snowed under solicitors.

Renting, on the other hand, can be completed quickly, with deposit and tenant checks able to be done in next to no time, meaning you can be settling into your new home in super quick time.


BUT IT'S NOT YOUR OWN HOME

While many landlords are flexible in regards to the things tenants can do to their properties, generally speaking there isn't a huge amount you can change in a rental property to make it 'your own'.

Most people have their own ideas and tastes when it comes to a property's look and feel and buying a home gives you the freedom to decorate and renovate to your heart's content.


BUYING IS AN EXPENSIVE BUSINESS

Even more so these days. Not only are purchase prices increasing year-on-year, the costs associated with buying a home are still extremely high.

Despite Chancellor Philip Hammond's generous reduction in stamp duty for first-time buyers in 2017, land tax will still wipe out more of your budget than you would like.

Add solicitor fees, estate agent fees and moving costs into the mix and buying a home is a very costly affair indeed.

Interestingly, research conducted in 2017 suggested those who own their home would need to run it for 10 years before money they are saving in rent overtakes the overall cost of buying the property. Food for thought...


OK, BUT MORTGAGE PAYMENTS ARE CHEAPER THAN RENT, AREN'T THEY?

They can be. And the Royal Institution of Chartered Surveyors warned only this week that a shortage of rental properties and landlords withdrawing from the market due to new tax legislation could see rents rise by as much as 15% by 2023.

That tax legislation, which means landlords can no longer deduct the cost of their buy-to-let mortgage interest from their taxable profits, could also see those who remain in the market increase rents to cover the cost of their larger income tax bills.

But with Brexit and its ongoing uncertainty on the horizon, too, a steady rise in interest rates would also cost those with non-fixed rate mortgages more each month.


IF YOU OWN A HOME, YOU ARE RESPONSIBLE FOR ITS UPKEEP

And we all know how expensive property maintenance can be. That broken boiler or failing roof could end up costing you more than a pretty penny.

For those who rent, however, those costs fall on to the shoulders of their landlords.

So while you may have to put up with some bedroom wallpaper you really can't stand in your rental, the invoice for a new heating system can simply be passed on to your landlord.


We have a whole host of rental and sale properties available to view at Martin & Co Camberley. Contact us today to see if we can find your new dream home.