When looking at where it is better to buy or rent your home, there are 2 main angles I think we need to consider. This post will just look at the key points in a little more detail in the hope it will help you decide whether buying or renting is better for you.
Flexibility of renting
Without doubt, if your priority is flexibility then I think renting is probably the better option. Typically a tenancy agreement is for 6 months, you can then sign an extension or if the landlord is in agreement you can go on to a monthly rolling contract.
This is perfect if you are looking at new areas to move to, you need to move around the country for work or if you do not need to be in a specific place for work and you want to explore the country. You can just move at very little notice or cost.
Unlike if you are a homeowner, you would need to put your home up for sale, get an estate agent round, solicitors involved, potentially stamp duty implications etc, it is quite an expensive and time consuming process. There are exceptions where you can get consent to let on your own property but thats a post for another day.
I am going to use myself as an example in this part. My first home I bought, my mortgage was around £325 a month. To rent the same house it would have cost around £600-650. That allowed me to save up more money for my next home. Added to that when I come to sell the property it had increased in value, I ended up selling it and making around £50,000 profit. Added to that, I had also paid down the mortgage over the 4 years.
That then put me in a position where I could buy my current home. My current mortgage is also around half what it would cost me to rent a similar property. Added to that, the value of my home has increased faster than our household income has. That means I probably could not afford to buy my home now!
There are of course other factors to consider when deciding on whether to buy your own home or rent.
There are extra freedoms that come with home ownership, if you want to decorate you can do. If you pay your mortgage on time, you are not going to be evicted. With rental properties you may find you have a landlord who wants to pop round to check on the property.
If there is a problem with the property, you have to call the landlord. This can be a good or bad thing, the upside is that you are unlikely to be footing the bill for the repairs, however you are also not really in control of who does them and to what standard.
When looking at whether it is better to buy or rent, there is no cut and dry answer. Ultimately it comes down to you and your requirements. If it is purely financial then I think it is an absolute no brainer that buying is the better option for the majority of people. That assumes you have a stable income and the deposit. Had I not bought my first home at the earliest opportunity I would have probably stayed at home. I do not think I would have been able to save as quickly as the increase in house value… My first home was not very nice either, it was damp, had not been decorated in 30 years, it was dark and cold. But I think that also helped me in the long run. The house was on the cheap side for the area and it allowed me to add in some value.
If your priority is flexibility and freedom then I do not think home ownership is really the best option. Renting gives you the flexibility to move at the drop of a hat and typically only ties you in to a 6 month contract.