• Renting VS Buying… How To Decide?!

    The decision to buy your first home will only come once in your lifetime, and it’s one I haven’t taken lightly. I started working when I was 15, and it feels like I’ve been saving for a deposit ever since I received my first pay slip all those years ago.

    Jump forward a few years to 19 year-old me, moving out of home for the first time and renting a house with my boyfriend. My savings did take a bit of a hit by renting initially, but I think it was necessary to rent together first before we bought a house – I was totally na├»ve of course at age 19, we had never lived together before… who knows what could’ve happened! The whole world of renting vs buying houses was totally alien to me and I had no idea of the costs involved, such as…

    • your initial deposit, usually 4 or 5 months rent
    • upfront rent
    • holding deposit (usually refundable)
    • insurance (not mandatory but recommended)
    • new furniture
    • cost of moving – van hire, boxes etc
    • parking permits
    • bills

    We also had to pay tenant fees but since June 2019 they no longer apply – yay! As I was moving out of home for the first time, I didn’t own any furniture whatsoever so I totally underestimated how expensive it would be to furnish a whole house – my savings definitely took a knock but it was so worth it.

    If you’d like more info on this, RightMove have a really helpful post on What To Expect With Renting Costs

    The Spanner In The Works – COVID

    We ended up having to move out of the house we first loved and moved in to a one bed flat (story for another time) but we were happy… then the COVID pandemic happened.

    My partner and I are both in good health – I know the pandemic has hit other people so much worse than us so for that I’m super grateful. However each family has had their own struggles and we sure have had our own! As a key worker, my job didn’t change so much but my boyfriend started to work from home and this was tricky with the limited space we had. Buying a house was already on our minds but the lack of space was definitely a catalyst for the decision to buy our first home together.

    renting vs buying happily ever after

    Renting Vs Buying: Getting My Head Around Mortgages

    Before we could do anything, we had to establish a ball park on what we could afford – clueless me didn’t really have any idea on what house price would equate to the monthly payments we were already paying in our rented property. I found this Mortgage Calculator so helpful to work out monthly repayments and what interest we would pay.

    MortgageCalculator.uk Logo.

    Powered by Mortgage Calculator UK widget

    This was so helpful for us to know what the monthly repayments would be for the price of the property. Obviously you will need to provide evidence that you can afford to borrow the mortgage amount which will be based on your income which is obviously a big difference from renting vs buying.

    The costs involved in buying are of course a bit different to renting, and can vary quite a lot more. This is not an exhaustive list, but could include…

    • Deposit, usually between 5% and 20%
    • Surveyor’s fees (to check the property’s value is accurate)
    • Solicitors/conveyancing fees (all the legal work)
    • Stamp Duty, if over threshold
    • Moving costs – removal people, van hire
    • Arrangement fees – cost for mortgage to be set up
    • Ground rent/service charge if leasehold
    • Insurance & bills

    Zoopla have a great post about the costs involved when you’re buying a house which explains these points in a bit more depth – you can check that out here. As you can see there is a lot to consider when deciding whether to buy vs rent your next property. It is best to make your own pro/con list, but here are some of the positives and negatives to both renting vs buying

    Renting

    ProsCons
    Landlord pays for maintenanceYour rent could increase
    Move in quicklyBound to an agreement
    More affordable initiallyNo investment
    Easy to relocateNeed permission to decorate
    Live somewhere you couldn’t
    normally afford to
    Could be difficult with pets

    Buying

    ProsCons
    Decorate as you likeA big commitment
    An asset you’re investing in toTakes longer to move in
    Not reliant on landlordPay for your own maintenance
    Mortgage repayments may be
    cheaper than renting
    Substantial deposit required
    Property can be passed onYour property could be repossessed
    if you can’t afford the payments
    More stabilityYou could end up with negative equity
    (home is worth less than mortgage)
    You could make money when
    reselling
    Can take a long time to sell

    Everything I have mentioned here is what has helped my partner and I to make the decision between renting vs buying. Of course, there’s always going to be a lot of research when you’re making such a big choice but I hope all of the above has been helpful if this is something you’re trying to decide on.

    Thank you so much for reading this post – if you found it helpful, why not check out some advice on making a large purchase?

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    Kerri
    Kerri

    Lifestyle Blogger based in Devon.
    I like to write, drink tea and read great books.

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