The state of home6ownership in the UK has changed dramatically over the past few decades.
Renting is standard practice in many European countries (in Germany, the national rate of home-ownership hovers around the 40 to 43 per cent mark), and due to a number of factors such as inflation, a shortage of housing availability and buy-to-let initiatives that have helped many people become private landlords, renting is now commonplace in the UK as well. The English Housing Survey (2017) reported that home-ownership in England is at a 30-year low, and that the private rental sector has doubled in size since 2004.
This change in accommodation landscape has left many people wondering, “is it better to rent or buy?” Millennials especially
Things to think about when deciding whether to rent or buy
No doubt for most people, this will be a key if not the key consideration when deciding whether to rent or buy. As of December 2017, the average property price in the UK was £226,756 – bringing the standard 20 per cent deposit sum up to £45,351. This can be a substantial blocker for many people when it comes to buying a place of their own. Of course, if you can afford to buy, you can use your property as an investment and retirement pot in addition to it being your home, so there are many benefits to buying as well.
What do you need from a property? Can you live in a flat, or do you need a house? Do you have children or pets (some landlords may have caveats against allowing pets in a rented property). Do you require parking? If you live in a busy city with a bustling rental market, finding a property that ticks all your boxes might be challenging, whereas if you buy, you have more control over your requirements and can always make amendments to the property and it’s surrounds to meet your needs.
It may be the case that you can afford to rent where you live, but couldn’t afford to buy in your neighbourhood – in this case, you may be faced with choosing between getting on the property ladder and living in your chosen location for lifestyle or work. For many millennials especially, renting is therefore the more practical and affordable option. There are other location considerations such as proximity to transport, schools and amenities to think about as well.
Maintenance and running costs
Landlords and property managers can take care of this in rented properties, whereas homeowners will have to incur the hassle and cost of any maintenance and emergency repairs, along with the disruption to life while those repairs take place.
For many people, purchasing a home is the biggest financial investment they’ll make, so it’s a decision that should warrant a great deal of thought and planning. There are many home-buying and mortgage advantages and disadvantages, however more people than ever are feeling more comfortable in rented accommodation. Ultimately, whether you want to buy or rent depends on your personal circumstances and budget, but as the private rental sector has emerged and evolved in recent years, it can be seen that there are benefits to both renting and buying today.