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Buying
Pros
•A property is an investment, effectively once your mortgage is paid off you will have a valuable asset.
•From painting walls to knocking them down if you own the property you are free to do what you want.
Cons
•A substantial amount of money is required upfront when buying a house, including a deposit, which can be as much as 25% of the property’s value and legal fees, as well as money for removal, refurbishment and furniture (if required).
•The legal process and organising the removal of all your belongings can take months.
•Risks are far greater with buying. Inflation could mean mortgage interest rates could rise beyond what you can afford. Defaulting on a mortgage repayment is very serious; a missed payment would remain on your credit report for up to 6 years making it very difficult to get any other loans or a remortgage. Whether you are buying alone or with another person you should have a plan on how you would pay the repayments if one or both of you were to lose your job.
• It is down to you to finance repairs to the property, no matter how big or costly!
•You have to be certain that the area you buy in is where you want to live, it is far harder to get out of a mortgage than a rental agreement and the responsibility will lie with you to find a buyer.
•House prices are volatile and are equally as likely to fall as rise making you in negative equity, i.e. repaying a loan that is worth more than the value of your property.
Renting
Pros
•Initial costs are much lower, other than a small deposit (normally equivalent to a month’s rent) very little finance is needed, especially true if the house is already furnished.
•Rental agreements can tie you in for anything from 1 to 12 months, either way it is far easier to relocate if you decide the area is not for you.
•The landlord is responsible for maintenance of the property, if it is deemed wear and tear.
•From viewing the house from moving in could take as little as a few days with rental properties, no waiting for legal papers.
Cons
•Renting is not secure, there is always the risk your landlord will not renew your contract.
•Since you will never own the property it is not an asset, renting is often deemed as ‘wasting’ money as you will never reap any financial benefit from it.
•Landlords are not always reliable when it comes to repairs, you may have to pester them before work is done.
• The landlord may restrict how you can decorate/personalise the house.
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