Rent or Buy in 2024?

Buying a home has always been seen as a life goal for many young people, often being favoured over renting and holding precedence over other ways for people to get onto the housing ladder. Some people see renting as throwing money away, or paying for your landlord’s mortgage while considering buying their own property as an investment.

But, is buying a property always the best option? It’s a question that so many ask themselves when looking at property, but the answer to such a question is one that can’t be answered with a one size fits all approach.

With both average house prices and rents increasing, the decision between renting or buying has never been trickier. Renting is more flexible but can cost more in the long run, while buying your own home is a big commitment and comes with a lot of upfront costs. With these issues in mind, let’s take a look at whether renting or buying is best for first time home seekers in 2024.

Is It Cheaper To Rent Or Buy A House?

Factoring in monthly accommodation costs, renting is considered to be more expensive than owning a home. Recent studies have shown that the average rent paid for a property in the UK is £1,223 per month, following a growth of 7.2% in the past year.

Compare this to the average mortgage payment of £944 (based on a house valued at £244,000), and there is a considerable difference. However, one thing to note is that these figures are based on averages, when the amount of rent paid and monthly mortgage payments vary across the UK due to location, house value and deposits.

There are also other expenses to factor in when buying a house. Solicitor’s fees, moving costs and stamp duty all need to be accounted for as well. When you own a house, you are also responsible for its upkeep and maintenance, whereas renters can reach out to their landlords if they need work or repairs done. If you rent a property, then you might not be responsible for the maintenance and repair of your home, but you will still be responsible for bills such as council tax and utilities.

Before you decide whether renting or buying a home is the better option for you, it’s important to understand and weigh up all the costs involved.

What Are The Advantages Of Buying A Home?

Owning your own home comes with many advantages. One of the main reasons why people choose to buy is that, over time, the property will increase in value. This ultimately means that, when you pay off your mortgage, you then have the option to sell and recoup your investment’s value. Other advantages of owning a home include:

• Monthly mortgage payments go towards you eventually owning your home, rather than into a landlord’s pocket.
• At the end of your mortgage’s term – usually between 25 – 30 years – you will fully own your home.
• If house prices have risen during your mortgage term, you may end up making a profit.
• You don’t need to seek permission for redecorating, renovating or owning pets.
• You will be the sole beneficiary should any maintenance, renovations or repairs lead to an increase in house value.
• You aren’t dictated to by a landlord, should they look to sell or increase rent.
• When you die, you have what is known as an asset, which can then be passed on.

Are There Disadvantages To Buying A Home?

When you set out to buy a house, you will be faced with more initial costs than if you were to rent. As well as this, there are some disadvantages to consider, such as:

• If you get a mortgage with a partner or spouse and you separate, it can be complicated when looking to sell the property, sign over ownership or take on a sole mortgage.
• If interest rates rise, then so will your monthly mortgage repayments. Fixed-rate mortgages can keep your repayments at the same level for a fixed amount of time, helping you to budget.
• You will have to pay for repairs and maintenance, including urgent repairs such as leaks or electrical issues.
• The process of moving can take a long time, particularly if you are in a chain.
• There are serious consequences if you fall behind on mortgage payments, including repossession or bankruptcy.

What Are The Advantages Of Renting?

While buying a house comes with a number of advantages, there are also plenty of benefits that come with renting.

• Renting offers flexibility so if you need to move due to work commitments, you can quickly relocate.
• Finding and renting a property is much quicker than looking for and buying a house.
• If the value of the property reduces, then you won’t lose out.
• Your landlord is responsible for repairs, maintenance and renovations.
• Rental payments rarely change and you only need a small security deposit, so renters may find it easier to budget.
• Compared to if you were buying, you might find that by renting, you can afford a larger property or one in a nicer location.
• If you do need repairs or maintenance done, and your landlord works with facilities management companies in Yorkshire or something similar, then the turnaround should be relatively quick.

Are There Disadvantages To Renting A Home?

One of the biggest disadvantages of renting a home is that your monthly rent payment is essentially going towards your landlord’s properties rather than towards your own home. Other disadvantages of renting include:

• If you rent, then you face the possibility of not getting out of the rental loop.
• It’s becoming increasingly expensive to rent compared to buying.
• If the property you are renting increases in value, you won’t see any of this.
• If your landlord decides to sell, get new tenants or increase rent, then you will be left with very few options.
• Your landlord can put restrictions on the property, such as with the decor, improvements or pets.

What Else Do I Need To Consider When Deciding Between Renting and Buying?

Making the decision to buy or rent should be based on your personal budget and circumstances. Renting, for example, might be a good solution in the short term if you are considering relocating or you’re still studying. If you are still able to live with your parents while you save up and know that you want a house that is your own, then buying may be a more suitable option for you. Other things you should consider include:

• Do you have enough money for a deposit if you decide to buy?
• Do you have enough money saved to pay a landlord’s deposit if you rent?
• Have you factored in the upfront costs of buying a property?
• Do you earn enough money to be able to afford a mortgage?
• Will you struggle to keep up with monthly rent payments?

There is so much that goes into deciding whether to rent or buy that there is no black and white answer to which is best for you. It all comes down to being able to take your own personal factors into account and make the best decision based on them.