Rent or
Buy?
Renting is money down the drain and property is a great investment. But is
it as simple as that?
When you decide to leave the family home and get your own place, you’re
faced with a big decision – to rent or to buy? Of course financial
circumstances may dictate that you don’t have a choice. Let’s look
at the pros and cons of both situations.
Renting
You can rent a property from many different people – private landlords,
estate agents, companies, even friends and family. Or you could choose to
live in a flat- or houseshare with other tenants.
The advantages of renting:
Flexibility to move out, depending on your contract
Maintenance costs are the responsibility of the landlord
Useful if you are only staying in an area for a short amount of time
The disadvantages of renting:
The money you pay in rent is gone forever
If there is a problem, you have to rely on the landlord to fix it
Although you live in the property, it is not yours, so you can’t decorate
it or otherwise treat is as your own
Buying
Buying a property is a serious undertaking. Most people borrow a large sum
of money in order to own their own home and that money has to be paid back,
one way or the other. If you fall behind on your repayments it can have major
consequences. Having said that, owning your own place gives you freedom and,
potentially, an investment that will only appreciate in value.
The advantages of buying:
The money you pay out goes back into your property
Your property is yours to do what you want with
The property may rise in value significantly
The disadvantages of buying:
Unless you are very wealthy, you are committed to repaying your mortgage
You are responsible for the maintenance and upkeep of your property, which
can be expensive
Your property may fall in value
Ultimately it makes more financial sense to buy if you can afford to. The
key is not to overstretch yourself – the bigger the deposit you can
manage to save, the less you will have to repay.
But if you want the flexibility to move around without being too tied down,
then renting will be your preferred option.
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own drawing plans for the Building Regulations as well? Why not obtain our
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Please note that articles on this site do not constitute regulated
financial advice, which recommends a course of action based upon the specifics
of your personal circumstances. The articles are intended to provide general
personal financial information. We urge you to consult an Independent Financial
Adviser (IFA) before making any important decisions about your finances.
Call 0800 085 3250 for details of IFAs in your local area. Any statement
regarding financial services products and tax liability is based on legislation
and tax practices as at 1 January 2004, which is, of course, subject to
change.The value of any tax benefits or reliefs depends upon the individual
circumstances of the investor.When investment performance is mentioned you
should remember that past performance is no guarantee of future performance.
Where products have an underlying investment content, in many cases the value
of the investment can fall as well as rise. For with-profit based investments,
there is no guarantee as to the level of bonuses that will be declared, if
any. Where mortgages or secured loans are explained do remember that your
home is at risk if you do not keep up repayments on a mortgage or other loan
secured on it. All mortgages are subject to underwriting, status and are
not available to people under the age of 18.
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