It is often considered best to get onto the property ladder as soon as possible, however, buying a property isn’t always the best option, particularly if it’s your first home. Whilst buying a home does offer stability and the freedom to make changes to the property, it’s not always the best choice for everyone.
Here are 5 reasons why you should consider renting your first home instead of jumping straight onto the property ladder.
No Large Down Payment
The more deposit you can afford to pay, the better the mortgage deal you are likely to get. Gone are the days of being able to take out a mortgage with a 5% deposit or less. It can take a long time to save up a significant deposit, renting before buying can help take the pressure off and allows you to take your time saving up your deposit.
Flexibility of a Short Term Contract
If you aren’t sure where you want to live long term, renting is definitely the best option. There are fees involved when buying and selling a property so if you did decide to move after buying, you will incur costs. Selling a property and moving into a new one is also quite a stressful experience, particularly if you end up in a chain. If you were to purchase a property with a fixed mortgage, there is likely to be a considerable charge if you wish to sell the property and the end of the agreement. When renting a property, the length of the rental agreement can be as short as 6 months, meaning you are free to move as often as you like.
No Maintenance Costs or Repair Bills
When you rent a property, you are not usually responsible for any repairs that are needed or any costs involved with the upkeep of the property. If you have a plumbing problem, an issue with an appliance or if there are any external repairs needed, your landlord will pay for this. Costs can mount quickly if something goes wrong when you own your home. You will be responsible for paying tradesmen to carry out any work that needs doing as well as fixing or replacing anything that no longer works. You won’t have the luxury of your Landlord or Letting Agency dealing with any issues that may arise. It is important to look after a rental property though as you will be responsible for paying for any damage that you have caused. Taking care of the property is important to make sure your deposit is returned to you at the end of the tenancy.
Fixed Rental Agreement
When you sign a tenancy agreement, you agree to pay a particular amount to your landlord each month. This amount will remain fixed for the duration of your contract. If you have a variable mortgage, the amount you pay each month can vary depending on the current interest rates. In an uncertain property market, it can be difficult to know whether the amount you are expected to pay is going to increase. Renting is an attractive option in an unstable property market as you don’t need to worry about any changes in interest rates.
Sharing With Other People
If you want to live with a group of people or move in with a friend, sharing a rental agreement is a lot less risky than sharing a mortgage. There is nothing wrong with buying a house with someone else, in fact it’s a great way to share the costs, however, you could be signing an agreement for a period of up to 30 years, whereas a rental agreement is usually 6 or 12 months. Unless you are absolutely sure you want to live together long term, renting is a far simpler choice.