Home ownership is a particularly British aspiration. Even in today’s straitened economic times, 63% of property is owner-occupied. In Germany’s more robust economy, it is only 41%. There, renting is seen as entirely acceptable, particularly among younger people. Many of the same advantages that they perceive in renting can also apply in the UK. This leads to the question that increasing numbers of UK property-seekers are asking themselves: to rent or to buy?
The Money Advice Service provides lots of useful information for those taking this decision but here are several of the most important considerations.
Finance represents the biggest hurdle for many people. Renters have to find a deposit, which is often sizeable. Meanwhile, the would-be buyer must stump up for a deposit, stamp duty, survey costs and legal fees. Clearly, the upfront costs of renting are lower. However, looking into the longer term, the picture is not so simple. Figures from multiple sources suggest that a mortgage is currently cheaper than rent on a comparable property. Partly this is due to record interest rate lows and partly it stems from higher demand for rental properties.
Maintenance and buildings insurance are two costs that renters do not need to worry about. Even though most landlords will account for these costs in the rent they charge, the fact remains that renters also do not need to concern themselves with the hassle of organising insurance and maintaining the property.
The risk of negative equity aside, most homeowners will, once they have paid off their mortgage, have the benefit of a sizeable capital asset. Conversely, renters have nothing of their own to show for the money they have paid to their landlord.
Renting offers greater flexibility. With even the speediest purchase taking around 12 weeks to go from offer to completion, house buying is never quick. It is far easier, and often cheaper, for a renter to respond to a change in employment or family situation. A good estate agent, such as Gloucester estate agent TGRES can help in either situation. Indeed, your Gloucester estate agent is well-placed to answer all your property-related queries.
Provided they always meet the mortgage repayments, homeowners cannot be evicted. Although renters have some legal protection, it is possible for them to be given notice and evicted.