Will Leyland, 13 January 2021
Now, clearly, because we’re British you’ve read this headline and thought to yourself that this can’t possibly be true. From a young age we’ve had to grapple with a culture in the UK that places home ownership as the ultimate trophy to attain when becoming an adult.
We constantly see it shouted about all over the media, that there should be more opportunities for the young to get on to the property ladder and to own their own property.
By and large that’s a fair and reasonable expectation that when younger generations want to buy their own property they should have the access and resources to be able to do so, however, what we take some issue with is the suggestion that it’s the only conceivable option lest you be stuck in an undesirable rental home which would obviously be terrible, right?
Well, what if that was absolute rubbish and whilst it’s perfectly fine to want to own your own home, there’s also some considerable downsides to that, and some considerable upsides to renting?
Well don’t worry yourself dear reader, because we’ve got some very good reasons for you to consider yourself a perfectly functioning adult with some tangible benefits over your home owning friends.
Let’s tackle this head on – using your home as a personal investment either for returns or a pension often isn’t a hugely good idea.
First and foremost, if you want to buy property purely for its profit potential then you’re unlikely to prioritise the things you actually want from a home, such as sufficient living space, parking, kitchen, etc. When looking for a rental property this is your sole and driving priority, to pick the best property to actually live in.
Secondly, most people who have a profit incentive when buying their home don’t have the first idea about property investing. They don’t know about yields, location, rental demand or other factors. Some areas offer faster capital growth than others, some offer little capital growth but good yields, and there are a million different factors to consider.
According to research by Tranio, the average cost for maintaining a property in the UK per year is up to £3,000.
Take into consideration boiler repairs, roof repairs, painting, refurbishments, plumbers, electricians, insurance and all the other things that homeowners must consider each year and the costs start to rise fairly sharply.
Whilst the cost of renting in comparison to a mortgage is often more expensive, that’s not taking into consideration maintenance costs that can add thousands per year.
As a renter, your landlord should take care of all these reasonable costs and this in itself saves renters a fortune each year, not to mention the time and hassle it takes to carry out these tasks! You may ask how landlords absorb this cost, but many professional landlords have contracts across a number of properties with professionals they have had relationships with for years.
Ok, moving is never completely hassle free. There’s moving vans, furniture, bills to move and paperwork to sort out, but consider the difference in moving house as a tenant and a homeowner.
As a tenant your only requirements are to complete a credit check and pay your deposit before signing your tenancy agreement and then arrange the date.
As a home owner you must find an estate agent, put your property on the market, facilitate viewings, consider offers, place an offer on the property you want to move to, hire solicitors, enter into a chain, pay taxes, the list goes on and on.
This entire process of moving home as a homeowner can so often be absolutely torturous and fraught with potential disaster if a chain collapses.
As a renter, maybe you’ve got things a little easier than you’d thought?
Will Leyland, 13 January 2021