Benefits of renting vs buying
- April 21, 2020
Benefits of renting vs buying
Here at Copperstones, we make the process of finding a new home smooth and stress-free. From luxury houses to off-plan property. From new homes to overseas apartments, we have properties available to meet all of your specifications. Or, we can provide you with the finest renting services. Our professionals will work with you on every step to ensure you find the property that matches your requirements. With a range of options in both the rental and buying market, it is important to understand the commitments, flexibility, and benefits of each pathway.
Should you buy a home?
If you are in the position to buy a property and invest in your future then this can have a great many advantages. It is likely you will take out a mortgage and, though these monthly repayments feel very similar to rent, you can delight in the knowledge these amounts go towards buying your home – not into the landlord’s pocket – and eventually you will live RENT FREE. In addition, these payments can often be less than the equivalent rental price per month. Your home is yours and you may decorate, landscape, renovate, have pets, and make changes to increase the value as you wish. There is no threat of your home becoming suddenly unavailable due to a landlord’s personal circumstances, in short you are in charge. Finally the added bonus of making a profit, if you decide to move on, in the likely event of house prices rising.
It is, however, important to understand the potential drawbacks. You are in charge of your home which means you are responsible for repairs and it is vital to have an emergency fund in the instance that something urgent goes wrong and needs to be fixed immediately. The upfront costs, mortgage fees and stamp duty make it a much heavier financial commitment than a rental deposit and buying/selling is a much longer process. If you fall behind on mortgage payments this has the potential to lead to debt, repossession and bankruptcy.
Should you rent a home?
The main benefit of renting is the much smaller initial financial commitment. Coupled with this is the speed at which you can change your property. In London, in particular, it is common for rental properties to be let the very day they are advertised and there is always something coming available. There is no risk of losing money if the property prices decrease and you are not responsible for the cost of repairs and renovations. You may be able to rent a bigger home in a more affluent area than that which you could afford to buy.
There are of course disadvantages that cannot go unmentioned. Your monthly payments do not benefit your future, as they go straight to your landlord, and if you never buy a house you will have to pay rent for your entire life, even after you have retired. Your landlord has control of any changes made to the property and can set rules and restrictions on your tenancy there. They can also evict you should their own circumstances change or make a decision to have new tenants. Any work you do (if allowed) to improve the property could increase its worth however this will benefit the landlord, not you. Finally, your landlord could decide to increase your rent.
How to decide:
As a generalisation renting is cheaper in the short term, however over a longer period buying is usually the more cost-effective and beneficial. So ask yourself the following questions:
Do you have enough for a deposit? You need at least 5% of the property value and in addition: stamp duty, mortgage, valuation, solicitor and surveyor fees.
Do you earn enough to afford a mortgage? Your income must be enough to afford repayments whilst leaving enough money for living expenses and other regular spendings.
Will you live alone or with someone else? You can apply for a joint mortgage which may mean you are able to afford to borrow more if you buy a house.
How long will you stay in your next home? If this is a short period and your circumstances are likely to change the renting is probably best. If however, you intend to live in the property for a long time the buying often has more benefits.
Whether you rent or buy, Copperstones are committed to ensuring your journey with us to finding your next home will end in success. Within London, we have several high-end properties that promise luxury, comfort and style in the most exciting, up and coming developments.
The Royal Docks
Lying within an ‘arc of opportunity’ that has been identified as having £22 billion of development potential. With easy access to Canary Wharf, the City and the West End these apartments boast of generous living spaces, private wraparound balconies accessible from every room and floor-to-ceiling windows. Concierge service, underground parking and landscaped gardens are just a few of the benefits of living here.
Battersea Power Station
A development that will enrich and inspire your day to day life with luxury living spaces, a six-acre riverfront park, forty cafes and restaurants, event venues circa two thousand capacity and eighteen acres of public space. All this before you step out and explore the surrounding areas of Battersea, Chelsea and Clapham – to name a few.
Arguably the most exciting new district in central London and anticipating the arrival of a number of high profile residents, including the United States and Netherlands Embassies, favouring the contemporary and capacious Nine Elms environment over their current Mayfair and Kensington Addresses.