Is it Okay Not to Buy Your Own Home?
For many years, buying your own home was one of life’s ultimate goals. Along with having children, getting married and having a stable job with a good salary, having your own home was seen as one of the main paving stones on the way to maturity. Until now, it would seem.
The global housing market has undergone a massive shift in the past few years, with a global depression meaning that thousands of people were kicked out of their homes and many more had to sell because they simply couldn’t afford to keep up with mortgage payments.
Although house prices are down on their boom levels, the cost of living has increased massively while salary rates have remained the same. This has been the catalyst not only for a shift in the housing market, but a shift in the thinking of those thinking to buy a home.
With banks increasingly unwilling to lend to first-time buyers unable to put up a sizeable chunk of the price of a home up as a deposit, more and more people are deciding to rent on a long-term basis. But what benefits does this offer over buying, and should more of us be doing it?
Renting Means Less Commitment
Entering into a mortgage agreement is a massive commitment, and not just financially. When you take out a mortgage on that home, you’re essentially committing to that home and the area it is in until you’ve paid off the mortgage or can sell it. In certain situations, like having to move for a new job, this might mean selling your home off at a loss.
By contrast, most rental agreements can be cancelled within a set notice period, meaning that you aren’t tied down to a property should you need to move.
Renting Helps You Save
A lot is made of the fact that paying rent is essentially ‘throwing money away’; while you get a roof over your head, you don’t come away from a rental agreement with any tangible assets.
Technically, though, that isn’t true as renting provides the perfect opportunity to save. In the majority of cases, rent rates are cheaper than mortgage payments. As maintenance is usually covered by your landlord, you can make a lot of savings there, too. In some instances, your bills for electricity and water will be covered, too. All contribute to building up your savings funds.
It’s Easier to Rent in Vibrant Areas
When you’re young, carefree and have a bit of money to spend because you aren’t looking after kids, you want to live somewhere vibrant, somewhere where you can meet other like-minded young and carefree people.
For most young people, this will usually be the centre of a city or town and the definitive choice of accommodation for city centre living is a swanky apartment owned by some multi-millionaire property tycoon. Okay, so it might not be the cheapest of options, but why invest a lot of money in a house you might not even want to live in until you’re more inclined to spend a Saturday night in watching reality television?
Of course, there are also disadvantages to renting, the big one being that you leave a tenancy agreement with no tangible assets to show for your years of saving. Deciding whether to rent or buy ultimately comes down to assessing your own personal circumstances.
Christopher Smith is a writer with a keen interest in property. He currently writes for Shepherd Gilmour.
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