The Downside Of Renting Versus Buying
When it comes to property, it is the dream of most Brits to own their own home, and get that famous 'first foot on the property ladder'.
However, with prices going higher and higher, and getting more out of line with what people can actually afford, the prospect of property ownership looks more and more distant, like a pipedream, for many aspiring British property owners. Indeed, the average age of first time buyers is said to be going up at a steady rate, with property ownership in the mid 20s no longer common.
For some people, a point will come where they can decide to live in a very small property, that is far from what they want, but own it, or to carry on renting, potentially in a nicer location.
What is the downside of renting vs buying?
The biggest downside of continuing to rent rather than buying is two-fold:
1) All that money you are spending on rent is, in a sense, 'wasted': clearly it is not wasted in that it is giving you a roof over your head that without spending that money otherwise would not have been the case, however it is wasted in the sense it goes into the pocket of the landlord, and so contributes nothing to your ability to buy your first property.
2) All the time you spend renting, house prices may well be going up. And they may be going up at a rate faster than you are able to save; so the longer you wait to buy, the further and further away the prospect of actually buying is.
If you are renting, but are an aspiring home owner, then what can you do?
One of the first things would be to see if you can live somewhere at minimal rent. Yes folks, this does often mean moving back in with Mum and Dad, instead of renting! If you have a partner, this can be particularly difficult if it means that you both live with one of the families, however if possible it can save hugely on rent and make home ownership that bit less distant.
There is help available for first time buyers, which varies from time to time, with schemes opening and closing depending on the government of the day: therefore view the news section for up-to-date information on what help is currently available.
Although the bottom line is that many people have no option but to rent, rather than to buy, there are still ways of being savvy about it in order to try and keep property ownership more than a dream.
You might want to explore options such as joint ownership, although of course these can get complicated, particularly if there is ever a breakdown in relations, so these might be safest with a brother or sister, for instance, although even that relationship can and does break down for various reasons.
When you do rent, then - as unpleasant as it sounds - you might decide that you want to rent somewhere cheaper than you can afford even if your lifestyle takes a hit for a short while as a result, so that you can save more money and get onto that property ladder a little bit quicker than you might if you rented somewhere very nice, but a lot more expensive. It's a balancing act, and will all depend on what you want, how quickly you want it, and how much you can afford and already have saved.Last update: 27 Mar 2015
More first-time house buying articles:
- Pros & Cons of Buying at Auction
- What Types of Mortgage Are There?
- The Complete First Time Buyers Guide
- What is a Mortgage Adviser?
- Why London Property Prices are so High