With the world economy picking up it seems that the house market is once again on the move, however with the amount of mortgages now being approved rising an important question to ask is whether buying a home, rather than renting, really is beneficial. In this blog article we take a look at the pros and cons of each and explain why buying may not always be preferable to renting.
Security – Buying Wins
In terms of security many presume buying a home to be the outright winner, however if ever learnt anything from the past few years it’s that having mortgage doesn’t always provide the security that many had hoped for. In fact, until a mortgage is completely paid off it can still be seen as a liability, rather than a comfort blanket of security. Renting on the other hand is relatively neutral. Consumers are protected by tenant laws, however the long term future of having a home as an investment is obviously missing.
Expense – Renting Wins
As far as renting or buying goes both can be comparable in terms of the rent versus the mortgage on the same size property. However this is only the case for as long as the housing markets remains stable, as has been seen once interest rates raise, so too do mortgage repayments. What’s more homeowners have far more responsibilities when it comes to the upkeep of their home, as well as paying for the relevant insurances to protect their investment. All things considered this then means that renting is far cheaper than buying.
Personalising your home – Buying wins, mostly
When renting the majority of landlords will have stringent rules in place that most likely prohibit tenants from decorating at all. Quite obviously for this reason buying wins in this category.
Freedom – Renting wins
Having a mortgage is a reposnibisilty. It mean that moving is no longer a matter of handing in your notice and most certainly for the first few years you’ll have to stay in the same place merely to begin repayments on your actual home, rather than just paying the interest. For this reason renting wins hands down in terms of the freedom it affords tenants.
Cohabitating when something goes wrong – Renting wins
Whether you’re living with a friend or a partner it’s never nice when things go wrong and you either break up or fall out. If you have a mortgage however and this happens then you’re going to be looking at far more complex a situation than if you were renting.
So in conclusion, there really is no clear winner between renting and buying a home. Whilst on the one hand renting provides freedom as compared to an intimidating liability, on the other hand becoming a home owner does provide security in the future. It is then very much a matter of personal circumstances and what may be best for one may certainly not be best for another. One thing is for certain however if we’re to avoid the mistakes of the past, consumers and financial institutions may need to think more carefully before jumping into an agreement that practically lasts a lifetime.
