Despite the uncertainty of Brexit and the possibility of an interest rate rise, UK house prices are going up. Most homeowners across the UK have had an average of £7,500 added to the value of their property in the last 12 months; the national average house price is around the £225,000 mark, which is in the region of 4.4% higher than a year ago. This is great news for current and prospective homeowners especially those living in Northern Ireland, Scotland and Wales, the UK’s fastest growing property price areas.
Should you rent or buy?
With property experts expecting house prices to continue to rise in the country’s most affordable areas, should you rent or buy? Buying your own home is a huge decision to make, however, it could save you money in the long term. On the other hand, renting is a more flexible option; it gives you the opportunity to move to a different location if necessary. There are pros and cons for both, so here are a few pointers to help you with your decision:
The benefits of renting
• Finding and renting a home is generally quicker than buying
• You may be able to rent a larger home in a better area than you might have been able to buy
• You won’t run the risk of losing money if property prices go down
• The landlord will pay for any renovations or repairs
The downside of renting
• You have to pay quite a large deposit depending on the monthly rental amount
• Your landlord can increase the rent
• The landlord could sell the property or get new tenants, meaning you would have to move out
• All the rental payments go to the landlord, not towards owning a home
The benefits of buying
• Buying can sometimes be cheaper than renting
• You can have the property exactly as you want it
• Your monthly mortgage repayments go towards buying the house, not into a landlord’s pocket
• You fully own the home at the end of the term of the mortgage
• Upfront costs like stamp duty and mortgage fees can make buying more expensive than renting initially
• Unless you have a fixed rate mortgage, interest rate rises will increase your monthly payments
• You have to pay for property repairs or any renovation work
• If your financial circumstances change, moving to a cheap property can take time
To sum up, in the current UK housing market, buying a property is probably the best option. With property prices continuing to rise, you should make a profit on your investment in the future. Buying a property will allow you to eventually live rent-free, while you’ll also have a viable asset for you and your family in years to come.