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Rent or Buy? Choosing whether to buy or Rent a home could be one of the most important decisions you make in your life. Are you ready to settle down? Will one price work out better than the other?

Buying your own home can be expensive but could save you money over the years. Renting offers less freedom to live by your own rules but more flexibility if you need to move. Here are the benefits of each and how to decide whether to rent or buy.

Whether you rent or buy depends on your financial situation, like how you’d like to manage your savings, if you have an emergency fund, and whether you’d rather try to fix your broken toilet yourself or just complain to your superintendent.

It’s also a decision that’s harder and harder to make for young people, as financial inequality leads more young people to simply live with their parents, and to put off buying a home until later in their lives.

Check out our handy chart, first put together by Business Insider, that factors in all the major decisions you need to make when choosing whether you are renting or buying a home.

 

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Should you buy a home?

The benefits of buying

  • Your monthly repayments go towards buying your home, not into a landlord’s pocket

  • You fully own your home at the end of the mortgage’s term, and can then live rent free

  • You could make a profit if house prices rise

  • You can live by your own rules without needing a landlord’s permission (e.g. having pets)

  • You can make changes to the property such as redecorating or landscaping the garden

  • Renovations and changes you make could increase your home’s value

  • No landlord who could make you move house because they want to sell

  • Buying can sometimes be cheaper than renting

The drawbacks of buying

  • Upfront costs like mortgage fees and stamp duty can make it pricier than renting
  • If you get a joint mortgage and separate, it can be complicated to sell the property
  • Interest rate rises can increase your monthly payments (unless you get a fixed rate)
  • You have to pay for repairs, including if something urgent goes wrong like a leak
  • Moving can take a long time because you have to sell your home first
  • If your finances become tighter, moving to a cheaper property can take a long time
  • There are financial consequences if you fall behind on repayments, like getting into debt
  • If you fell too far behind you could face bankruptcy or your home being repossessed

Should you rent a home?

The benefits of renting

  • It can be easier to move house quickly when you need to

  • Finding and renting a home is usually quicker than the process of buying

  • No risk of losing money if the property’s price goes down

  • Your landlord has to pay for repairs and renovations

  • It is often cheaper and rental payments rarely change, making it easier to budget

  • You may be able to rent a bigger home in a nicer area than you could afford to buy

The drawbacks of renting

  • All of your rent payments go to your landlord, not towards owning a home
  • If you never buy a house you have to pay rent for your whole life, even after you retire
  • If your landlord decides to sell or get new tenants, you have to move out
  • Your landlord can set rules and restrict changes you can make to the property
  • You have to pay a deposit, and the landlord may keep some or all of it
  • Your landlord could decide to increase your rent
  • Improving the property could increase its price, but this only benefits the landlord

Which is cheaper?

It is usually cheaper to rent in the short term because:

  • The rent you pay could be lower than mortgage repayments would cost
  • The deposit you pay is usually much less than the initial costs of buying a home

Britain’s housing stock worth £7.76 trillion

Britain’s housing totalling 28.6 million homes grew in value by nearly £1.4 billion per day during 2015, says Zoopla research. Brentford and West Drayton are areas with largest increases in 2015 (24% and 17% respectively). Wales is the region with the lowest price gains over the past 12 months, at 2.2%. Edinburgh, Bristol and Glasgow amongst top online property searches in 2015.

 

Zoopla says that the country’s 28.6 million homes are now worth a combined £7.76 trillion (£7,764,650,690,201) — with the total residential stock value rising £519 billion (7.2%) over the past year.

 

The average British property is now worth £290,827 and has risen in value by more than £20,000 (7.4%) on average in 2015 – marking a bigger increase year-on-year than 2014 (6.9%).

 

Homeowners in London have seen the highest housing price growth in 2015 of any region, with an 11.8% annual uplift. The East of England follows closely with an 11.6% rise – up from 9.6% during 2014. However, property owners in Wales and Scotland saw the lowest growth in house prices in the last 12 months, with values rising just 2.2% and 2.7% respectively.

 

Bodacious Brentford
Brentford in Middlesex, Greater London finished the year with the greatest increase in housing prices, with values increasing by nearly 24% in 2015. Nearby West Drayton, along with Thame in Oxfordshire also experienced strong growth over the past 12 months, with both localities adding 17% on average to their house prices to round out the top three towns.

 

London, Edinburgh, and Bristol were the top three most searched-for locations by British house-hunters on Zoopla in 2015. Northern areas also performed well, with Glasgow rising in the rankings – moving from sixth place in 2014 to fourth place this year – while Leeds broke into the top 10, coming in eighth.

 

Zoopla also revealed what crucial criteria house-hunters using the property portal have been searching for in 2015. Amongst the most popular keyword searches over the past year were ‘bungalow’, ‘cottage’ and ‘village’, with aspirational property perusers also searching for homes offering a ‘pool’ and a ‘sea view.’

 

Lawrence Hall (left) of Zoopla, said, “Whilst the property market typically slows at this time of the year, prices have performed well in 2015, with some standout towns such as Brentford faring particularly well. Regions like East Anglia continue to boom as professionals and families seek out properties beyond the London commuter belt. Even regions like Wales, where growth has typically been very incremental, have totalled respectable annual growth rates. Of course, to every silver lining there must be a cloud and the price rises we’re seeing do make it harder for those looking to take their first step onto the ladder. But with Government Help to Buy schemes still in place and the promise of new homes to ease demand both buyers and sellers should have at least some reason to be upbeat as we go into 2016

Executive Durham Homes from Elite Estates