Boomin logo
BoominProperty AdviceBuyingBoomin Answers: Is It Better to Rent or Buy?
Buying

Boomin Answers: Is It Better to Rent or Buy?

The decision to rent or buy a house depends on an assortment of different factors, from finances to future goals. To help you answer, “Is it better to rent or buy?”, we present you the cold, hard facts.

Faye deGavre

|

Sep 03, 2021

|

4 min read

Boomin Answers: Is It Better to Rent or Buy?

There’s no doubt that buying a home is a significant life decision, and certainly not one to take lightly. So, is it right for you or should you stick with renting? Long-time renters may stress that they’re ‘throwing away money’ with every monthly payment, but it’s never as cut and dry as that. Deciding whether to buy or rent a house doesn’t have a one-size-fits-all answer. Your decision can boil down to several lifestyle considerations (such as flexibility or stability), your career goals and whether you want to commit to a place to call your own.

Stuck on when to rent and when to buy? We’ll go through just some of the benefits and drawbacks to both as well as important considerations to help weigh your options.

Benefits of buying a house

  1. Building equity – Instead of paying your monthly rent to a landlord, you can start buying into your own home equity. Every mortgage payment builds your equity and takes you closer to full ownership (since the bank technically owns it until you do). As homes generally appreciate in value over time, whether due to a hot market or home improvements, you could enjoy a sizable return when you sell.
  2. It’s yours – Even before you’ve paid off your entire mortgage, you still have the freedom to make changes to the home. Paint the walls yellow and upgrade the kitchen; the choices are entirely yours.
  3. Sense of stability – When renting, a landlord may decide to sell or move into their property at any time so you can’t always be certain how far into the future you’ll remain there. But when you own the property, you call the shots (provided you meet each monthly minimum payment).

Downsides of buying a property

  1. High upfront costs – While you can secure a mortgage with less than a 20% deposit, you do need a healthy chunk of cash ready for surveys, solicitors, stamp duty, mortgage set-up fees and moving costs.
  2. It could depreciate – We mentioned that home values typically often appreciate, but the market is not always moving in an upward direction. If your neighbourhood becomes less desirable or the housing market sees a sharp decline, your home may not be worth what you paid for it. This will be no concern if you plan to live in your home forever, but if you plan to sell, there’s no guarantee you’ll come out ahead.
  3. More hassle to relocate – If something comes up that requires you to relocate, selling a home is a harder, more complex endeavour than breaking a rental contract.

Benefits of renting a house

  • Flexibility – Whether you need to move frequently for work or you’re still finding the right neighbourhood, your home won’t tie you down. One-year rental agreements are the norm and if you need to leave sooner, breaking a lease is easier than selling a home.
  • Minimal maintenance – As a renter, the landlord is required to keep the property in good condition, which means taking care of emergency repairs and ongoing maintenance. On the other hand, homeowners have to pocket all of these costs.
  • Minimal upfront costs – To rent a house or flat, there will be some upfront costs of a deposit and moving expenses. While it won’t be anything like a 20% deposit on a house, you’ll still need to allocate some funds for renting.

The downsides of renting a property

  • Limited personalisation – Depending on your contract, you may not be able to hang frames, put up shelves or paint the space. A kitchen overhaul is out of the question without the landlord’s consent and money. What’s more, failing to clear DIY work with your landlord could result in losing your security deposit.
  • Not as stable – Even if you loved your rented home and considered yourself a good tenant, your landlord doesn’t have to renew your lease. They may want to sell the property or live there themselves. Overall, renting has less stability and housing security.
  • Not paying off an asset – The money that you pay doesn’t benefit you after you pay your rent. Although a mortgage requires a greater level of commitment, you’re paying for something that you will have complete ownership of one day.

Buying vs renting summary

Should I rent or buy a house?

It’s a numbers game

The average first-time buyer in Britain needs to save for around 6.6. years to save for a 20% mortgage deposit. In London, it’s close to twice the figure as it takes an average of 11 years to save for just a 15% deposit on a property. As you can see, even leading up to the purchase, buying a house is a big financial commitment. Some areas of the UK even found it cheaper to rent than to buy a home for the first time since 2017, showing the mortgage vs rent narrative isn’t always as linear.

Even after completing, there are costs beyond the mortgage. You’re on the hook for homeowner’s insurance, council tax, utility bills, repair and maintenance costs – and still have the means to live comfortably. There’s no point living somewhere that will force you to make unreasonable cutbacks. Make sure you consider these ongoing costs when planning your home purchase.

Longevity

Generally speaking, renting is well-suited for those who need short-term accommodation. If you plan on hopping from city to city or have plans to move away from the area in the future, then it makes more sense to rent. In contrast, if you’re looking to stay in the same area and put down roots, then buying a house could be the best economical option.

Find your next home to rent or buy

Is it better to rent or buy a house? There are compelling reasons for both, and what’s right for any individual depends on their unique situation. With this guide, you can weigh up mortgage vs rent, stability vs freedom and your financial picture to know where you stand.

Once you’re ready to kick off the search for your next property to buy or property to rent, Boomingets you ahead of the competition. See more of the market, book viewings online, 24/7 and receive instant confirmation.

Faye deGavre

Content Writer