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 naïve 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
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: 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.
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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
|Landlord pays for maintenance||Your rent could increase|
|Move in quickly||Bound to an agreement|
|More affordable initially||No investment|
|Easy to relocate||Need permission to decorate|
|Live somewhere you couldn’t|
normally afford to
|Could be difficult with pets|
|Decorate as you like||A big commitment|
|An asset you’re investing in to||Takes longer to move in|
|Not reliant on landlord||Pay for your own maintenance|
|Mortgage repayments may be |
cheaper than renting
|Substantial deposit required|
|Property can be passed on||Your property could be repossessed|
if you can’t afford the payments
|More stability||You could end up with negative equity|
(home is worth less than mortgage)
|You could make money when|
|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?