The grass is always greener on the other side of the fence. In property terms, that means renters often find themselves looking enviously at those who have already established themselves on the property ladder, while those who have bought their own property may sometimes wish that they had the flexibility of renting. As is generally the case in life, the “buying versus renting” debate does not have any “hard-and-fast” answer; it’s a matter of “horses for courses”.
The case for renting
Rent is commonly described as “dead money” and there is a certain element of truth within this. When you pay rent, you simply acquire the right to use a property, often with restrictions on your activities; you do not end up owning an asset as you do when you pay for a mortgage on a home.
On the other hand, you do not have the commitments associated with home ownership either. Buying a home is a major financial commitment and the cost and effort involved in doing so means that it is usually only worthwhile if you plan to stay in the same home for at least five years, or to rent it out for a similar period.
The rental market depends on buy-to-let landlords for whom life has become rather more difficult over recent years. They have had to absorb all kinds of regulatory and financial changes, many of which have been highly unwelcome. At the same time, however, the fundamental strength of the UK housing market is beyond dispute and there is always a need for high-quality rental accommodation and hence opportunities for buy-to-let landlords.
The case for buying
The main case for buying is actually very simple – you wind up owning a house, which is yours to keep for as long as you want or to sell whenever you see fit, hopefully for a profit. There is, however, a secondary case for buying, which is that it offers stability.
This, however, may be more of a reflection of the UK’s culture than of the buying versus renting argument itself since, in the UK, renting is typically by means of “assured, short-term tenancies” (ASTs) and is usually associated with younger adults who value mobility. In many other parts of the world, including continental Europe, it is perfectly normal for people to rent over the longer term, in some cases all their lives.
Overall, there is a clear economic argument for buying a house if you have a stable lifestyle, at least in geographical terms, and intend to stay in it for at least five years, preferably longer or if you can let it out. Those considering buying a property with the intention of living in it part of the time and renting it out part of the time should be aware that part-time landlords are still landlords and therefore need to abide by the same set of rules. There are, however, different rules for those who let out rooms in their home and this may be an attractive and economical option for some people.
Author Bio
Indlu are new hybrid estate agents in Manchester, offering a ‘no sale, no fee’ fixed price service to rival traditional high street estate agents in Eccles, Monton, Worsley and Manchester City Centre.
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Daniel Peacock