Buy or rent a house: Which is best for you?

Buy or rent a house: Which is best for you?
If you slot nicely into the Millennial generation then there's a strong chance you'll be renting a property, but have a burning desire to buy.

After all, Millennials aren't known as 'Generation Rent' for nothing.

House price rises over the past decade, particularly here in London and the South East, have priced out the vast majority of potential buyers aged between 22 and 37.

But there are huge numbers, particularly within this generation, for whom renting is very much a choice.

Even the Baby Boomers, the generation for whom house buying was pretty much the be-all and end-all, are starting to accept that their offspring may never own a home - at least not without their help and the fabled 'Bank of Mum & Dad'.

Should I rent or buy?

Despite home-ownership remaining a dream for many renters, its benefits still mean many very much aspire to buy their own property.

But renting also brings with it a host of positives - and this is why many young professionals now choose to rent rather than buy.

Let's look at some of the pros and cons of renting and buying...

Is renting cheaper than buying?

Now, this depends on which factors you consider.

Generally speaking, mortgage payments can often be lower than what the equivalent rent on the same property would be.

But when you factor in the costs of buying a home, such as Stamp Duty, solicitors' fees, moving costs and the ongoing maintenance of owning a property, things do start to balance out - or even exceed rental costs.

Indeed, research in 2017 suggested homeowners would need to own and rent their own property for 10 years before the money they are saving in rent overtakes the cost of owning said home.

Renting flexibility

One of the biggest attractions for so-called 'Generation Rent' is the flexibility renting provides.

Whereas this generation's parents were very much of the 'own a house, have 2.4 children and a job for life' mindset, young professionals in 2019 often need to move jobs frequently to achieve higher wages or the positions they crave.

All of which means owning a home would be a huge problem.

Being able to move quickly is key and crucial for those desperate not to be left behind in competitive and fast-paced industries.

The amount of time it takes to sell a property compared with flexible, short-term tenancies mean renting is a no-brainer for many.

Paying off someone's mortgage

Yes, by renting you are helping to pay off your landlord's mortgage when, of course, you'd much rather you were paying off your own.

You're also helping to boost your landlord's pension pot.

Having a mortgage on a property means each month you move closer to owning that property, and its value, outright - not to mention the benefits of any capital growth.

But despite the upward trajectory of UK house prices over the past decade or two, it's worth remembering that prices can still go down.

And if you end up in negative equity, where your home is worth less than the mortgage secured on it, you're stuck where you are.

Renting is a quicker process

On average, UK property purchases take around three months to go from the 'offer accepted' stage to that amazing day when you receive the keys to your new home.

Some are quicker, but some take even longer.

Renting, meanwhile, can usually be sorted out fairly quickly with tenant references and deposit payment able to be done extremely quickly, meaning you can move into your new rental property within days rather than the months it takes to complete a purchase.

You can't put your stamp on a rental property

Of course, some landlords are flexible in terms of what they allow at their properties.

Some may even be happy for you to redecorate if it doesn't cost them anything!

But, generally, landlords prefer to keep their buy-to-let properties neutral in order to appeal to a wider-ranging market.

Which means if you're renting, you're stuck with Magnolia walls for as long as your tenancy dictates.

Buying, on the other hand, means you can put your own stamp on your own home and really make it feel 'yours'.

Rental property boiler broken? Not your problem...

Another huge benefit of renting over owning a property is being able to save money on maintenance.

Sure, you've forked out a hefty deposit, but that will be returned if you look after your rental property as if it were your own.

And an expensive maintenance issue such as a broken boiler in a rental home will come out of your landlord's pocket - rather than your own if you owned the property.

Whether you decide to rent a property in London or buy a home, speak to your local Ellis & Co branch who will be happy to help.