Choosing a family home is one of the most important decisions we’ll make in life, and it can have long-lasting implications for our future happiness. In the UK today, the average family spends 23 years living in the same home, and buying a house represents the single biggest investment most people make in their lives.
Consequently, purchasing a home can present an unbearable pressure for many families and an increasing number are now opting to rent rather than take the plunge of making an outright purchase. The UK now has one of the lowest home-ownership rates in Europe – just 65.2% compared to the highest-ranking Romania where that figure is closer 95.8%.
Indeed, perhaps revealingly, the tendency to rent rather than buy is much higher in progressive countries like the UK, Germany and France than in less-developed nations like Hungary or Montenegro (second and third in the ownership list).
Renting vs owning – the convincing arguments to rent
As well as avoiding the considerable financial commitment required in owning a property, there are several other compelling reasons why renting might prove the ideal solution for you:
The majority of rental properties come fully furnished: Buying a home is just the start of a very long and expensive journey. As well as the upfront cost of ownership, you’ll also need to think about furnishing your house with everything from kitchen goods and utensils to beds and bedding. As the majority of rental properties (particularly apartments) come fully furnished already, you can save a tidy sum not having to shell out on the essentials.
Many rental homes come with bills included: Depending on your contract, you may find your landlord has already factored in electricity and other utility bills into your overall rental fee. Also, it’s not uncommon for properties to be rented with council tax fees as part of the overall price. Note: You should always thoroughly check with your letting agents or landlord to be sure exactly what’s included in your fees.
Reduced costs of insurance cover: If you own a home, you have to insure the property plus all the contents (i.e. furniture, valuables, computers, etc). However, when you rent a property, your landlord will have specific rental insurance that covers the building – meaning you’ll only need to cover your belongings in any insurance cover you take out. Also, some landlords even take out contents insurance. Again, you should diligently check what’s included.
The increased flexibility of renting: When you buy a home, you take on a considerable commitment – and one that can prove difficult or expensive to alter should your circumstances change. The time and costs involved in buying and selling properties can take a considerable chunk of any return you might have hoped to make on your investment while delays finding a buyer can put you in a state of limbo when trying to move. By comparison, renting property offers significantly more flexibility if you need to change home. Most rental contracts are either fixed-term or month by month meaning, at worst, you’ll need to see out the agreed contract length.
Remove the stress of volatile markets and fluctuating property prices: The world is a significantly less predictable place these days and it’s worth remembering house prices can go down as well as up. In a worst-case scenario, if you take on a mortgage on your home, you could potentially run the risk of ending up in a position of negative equity where the value of your mortgage exceeds that of your home.
In some locations, renting might be your only option: Owning a property in a large metropolis can be prohibitively expensive for many prospective buyers, making rental the only option. For example, if you work in London, you may find the cost of buying simply too high – while renting instead could allow you to live in your desired location.
Lowered cost of deposit compared to mortgage down payments: The majority of mortgage lenders require prospective buyers to commit with a sizable down payment on the amount borrowed (often around 20% of the total). Alternatively, when you rent, you’ll normally only need to pay one month’s rent as a deposit.
Improved amenities that simply aren’t realistic when owning: Many modern flats these days come with luxury facilities like gyms, exercise rooms, sculpted gardens or swimming pools. These extra amenities in a property are hugely desirable for many people but simply aren’t realistic for most of us when we buy a home. Moreover, even if you could afford to build these types of facilities, the maintenance fees will need to be covered by you alone. In shared accommodation, the entire building will pay towards the upkeep (often also included in your total rental fees).