Is it better to rent a property rather than buy one?
Last Modified 16th of February 2021
The question of whether it’s better to rent a property than it is to buy is a hotly debated topic, especially with the unpredictable nature of the housing market. Unfortunately, depending on whom you are asking you may find yourself getting a little confused as there seems to be a divided opinion on the topic.
Even with the dramatic increase in house prices over the years there are numerous surveys that have been taken and the general consensus has been that buying your own home is cheaper than renting. However, new research is starting to suggest that this may longer be the case and that renting a property through letting agencies such as www.rentify.com may actually be much more cost effective than committing to a mortgage.
Buying is cheaper
A recent survey that was carried out by Zoopla proved that buying is the cheaper option. According to this survey renting is on average 14% more expensive than you would expect to pay in interest on an interest-only mortgage. To put these figures into perspective on a 2 bedroom property you would be paying almost £1,000 a year more by renting than if you were making payments on a mortgage.
Renting is cheaper
While the general trend is that it is actually cheaper to purchase a property and to get a traditional mortgage, there are some exceptions to the rule. These exceptions will depend on a number of different factors:
Where you live
One of the biggest factors that can make renting a much more cost effective option is the area in which the property is located. One such area where you can expect to be better off renting is Swansea. The average property value shot up by 8% in recent years. As a direct result of this the rental market has declined, meaning prices have gone down – making it much cheaper to rent.
There are other factors to be taken into consideration that may make renting a property through agencies a more attractive option than buying a property. In most cases, when on paper it looks like buying is more cost effective than renting a property; the figures are almost always based on interest-only mortgages. Nowadays these are getting much harder to find so many people are be forced to take out a repayment mortgage which will be more expensive in the long run than renting a property would be.
Then there are the running costs of owning your own home that should be considered. For example if you are a home owner and your boiler breaks down then you have to pay for the repairs yourself, even if you have boiler cover this is still going to be coming directly out of your pocket. Now if you are renting a property all you need to do is give your landlord a call and the problem will be sorted.
So can renting be better than buying a home? In short yes it can, although it will ultimately depend on a number of different factors.