Home ownership is a dream for many people. Holding the keys to your first property, the one that’s finally “all yours”, is something that plenty of young people still strive towards… although the facts indicate that it’s something as many as 57% of people between the ages of 20 and 45 have given up on.
But is home ownership all it’s cracked up to be? That’s a difficult question to answer, partly because the issue is so deeply personal, but I’m going to do my best to take a look at some of the advantages renting offers over owning.
Many people look at property as a no-brainer of an investment, but that’s far from the case. While it’s true that most properties do go up in value over time, it’s not the sure thing that some people believe.
For example, just look at the recent Brexit: some experts are predicting that house values in the UK could fall sharply as a result of Britain leaving Europe. We’ll just have to wait and see whether or not that comes to pass.
But the falling value of property doesn’t have to come from anything quite so serious: a neighbourhood taking a turn for the worse, a lack of kerb appeal or an out-dated interior can all damage a property’s resale value.
Arguably the best thing about renting is that, should anything go wrong, all you need to do is call up the landlord or letting agent to arrange for the repairs to be made.
Exactly how quickly they get around to it – there are some real horror stories out there – might vary but at least you always know, provided you didn’t do anything silly to cause the damage in the first place, that you won’t get stuck with the bill.
When you’re a homeowner, everything from a broken down boiler to a dripping tap is suddenly your responsibility. Get hit with an unexpected expense and you can wave goodbye to the holiday fund!
Ease Of Moving
Thinking about your next property before you’ve even moved into this one might seem a little strange, but this is one huge advantage that renting has over buying. While renters don’t face any less stress on moving day (*shudder*) in terms of how much they have to pack, they definitely do have less to deal with should they decide to move once their lease is up.
Plus, trying to co-ordinate moving from one home to another on, more often than not, the same day that the occupier is moving can be an absolute nightmare, but it’s the usual for most buyers.
The Small Print
As well as taking the above into consideration, there are some financial factors in play here too. When you adjust for inflation, a house costs more or less the “same” as what it did a hundred years ago. Follow that link for more on this by a Nobel prize winning Yale economist!
Plus, factor in the fact that you could tuck away any money you had been planning to use for a deposit on high yield investments. This is a tricky one to calculate, but it is theoretically possible to “beat” the equity gained through a mortgage by putting money into savings instead.
In other words? Next time someone tells you that buying is always better than renting, send them this way and we’ll have words with them!