Should I Rent Or Buy A House?

If you are a young professional, couple or family

, the idea of buying a property might make sense, as long as you can come up with the capital for a deposit. But the recession caused most property prices to plummet and, although increasing, are still unpredictable. Nobody can really afford to buy a property with the chance of it decreasing in value but who wants to flush their money away on rent when they could be making an investment.

Many people overlook the benefits of renting; maintenance and upkeep is not your responsibility in any way, contracts are usually around 12 months so after that you can up roots and move on if you wish. There are certain legislations in place to protect you and you have no chance of falling into negative equity.

Although there are some rare try-before-you-buy schemes, rent is dead money; you pay it and never see it again. Many renters are naive and end up spending so much in rent that they cannot afford to save for a deposit to actually buy a house. You could get stuck with a cheap landlord who refuses to spend any money on maintenance and need constant chasing; you should make sure you have a decent landlord who is registered and will put your deposit in the right place as stated by law.

If you can save up enough for a deposit, paying for a mortgage will be paying money into something that should ultimately hold its value if not increase your investment giving you a greater return in the future which can be put towards a bigger property. You can avoid any of the problems associated with a landlord and can ultimately do whatever you want in your own pad, your house, your rules.

There are quite a few costs involved in buying a house and setting up a mortgage; solicitors fees, surveyors etc, this could also include any repair costs needed to make the property liveable. Choosing a mortgage is difficult as you will need to find the right one for you, interest rates can vary and some banks and lenders offer more than others. You will be responsible for the property both aesthetically and legally.

Fundamentally, it comes down to two things; do you have the equity to buy a property? And are you willing to take a risk with an investment? If you do then shop away but if not, consider saving money for that deposit.

by: Tom Doerr.

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