Buying vs renting: The benefits of home ownership

Buying vs renting: The benefits of home ownership

Home trends come and go. But in 2023, one new trend we’re seeing is a small shift in attitudes towards home ownership.

According to data from specialist lender Kensington Mortgages, Millennials (those born between 1980-1994) are ‘not buying as eagerly’ as the previous generations. While Gen Zs (those born between 1995-2012) see home ownership as being ‘completely out of reach’.

To buy or not to buy

“Of course, buying a home isn’t for everybody,” Jo Jingree, mortgage adviser at Mortgage Confidence, says. “But there could be a multitude of reasons for these changing aspirations,” Jo adds.

“For example, many young people carry the burden of student debt. Plus, the average UK home now costs around nine-times average earnings. And then there’s the current cost of living crisis to consider.”

However — becoming a first time buyer and owning your own property does have its benefits. Let us count the ways:

 

1. You can put your own stamp on it

Remember those prints you’ve longed to put up? Or those walls you’ve always wanted to paint?

“When you buy, you get to choose what your home looks like and there’s no landlord to tell you otherwise,” Jo says. “For example, it could be something as small as nailing pictures into the wall (which most renters aren’t allowed to do). Or something more substantial and long term, like giving your home a green glow-up, kitting it out with solar panels, heat pumps and triple-glazed windows.

“Plus, if you’re the proud owner of a pet, you won’t ever have to check the T&Cs of your rental agreement again to make sure its pet friendly. When it’s your own pad, all furry friends are welcome!”.

 

2. You’ll be mortgage free (at some point)

Decided you do want to buy? “If you can’t afford to pay for your home outright then, like the majority of all UK homeowners, you’ll need to get a mortgage,” Jo explains.

 

The term of a mortgage is often around 25 – 35 years. And this is the length of time that you pay back your mortgage. Once you come to the end of your term, you’ll own your four walls outright.

 

Whereas, when you rent, the monthly payments keep on coming. In fact, if you were to rent for an entire lifetime it would cost you £1 million more than purchasing your own home. That’s according to 2018 data from new home builder Strata, which compared the cost of owning a home in the UK to average monthly rental payments over a 60-year period.

 

3. You’ll have a strong sense of security

If it’s security you’re craving, then here’s some food for thought: “When you buy a home, it’s your home and no one can tell you otherwise,” Jo says. “As long as you keep up with your monthly mortgage repayments, you’ll have a strong sense of security.”

 

But this isn’t the case when you rent. When you rent, unfortunately your landlord can evict you for a number of reasons — and they only need to give ‘reasonable notice’. As set out in current law, ‘reasonable notice’ is the length of the rental payment period. So, if you pay rent monthly, you’ll get one month’s notice to find somewhere else.

 

4. You’ll have the predictability of monthly mortgage payments

“We know rising interest rates can sound worrying,” Jo says. “Especially in the current climate we’re living in. But when you buy, you can choose to fix your monthly mortgage payments if you so wish.”

A fixed term mortgage is a type of mortgage deal where the interest you are charged is fixed for the length of the deal. “This can give you certainty in the amount of money you are repaying every month,” Jo adds.

This is unlike a fixed term tenancy agreement, where your landlord can determine how much money you’ll part with. And as stated by Rightmove, when it comes to rental prices, it looks like the only way is up. The property website found that average rent increases for newly listed properties rose by 9.7% in 2022, and it’s been predicted that newly available properties will rise a further 5% in 2023.

Seriously considering buying?

Contrary to what you might have heard, there are a range of options when it comes to buying a home. No matter whether you’re self employed, credit impaired or a first time buyer. Multi-award-winning mortgage adviser Jo offers a free 30 minute no obligation phone call. So if you’ve decided 2023 is the year you want to scope out the property market, do get in touch.

 

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