Should you rent or buy?

There are so many financial commitments, lifestyle decisions and mortgage options to consider when buying your first home that it's easy to become bewildered. Here we look at one of the most fundamental questions facing any first time buyer: is purchasing a property the right decision for them? Should you rent or buy?

House prices

There's no denying that house prices have taken a tumble over the last four years. However, the general trend over the past two decades has been for house prices to increase steadily. The experts are split on whether the market has bottomed out or whether prices will continue to fall for the foreseeable future. Instead of trying to predict the unpredictable, a better strategy would be to consider your own personal circumstances and how they could be impacted either way.

Fees and other costs

Most first time buyers will not have to pay stamp duty (unless you purchase a property with a purchase price of over £250,000). However, there are other - often sizable fees - involved in buying a house. With conveyancing, mortgage fees, removal fees and sundry costs, the average cost for moving into your first home is around £4,250.

How long you want to stay in the property

When considering whether to rent or buy, one of your primary decisions should be how long you would want to stay in that property. It's unlikely that you can afford to buy your dream home right away, and the less time you plan to spend in the home the more you should look at it as an investment.

Rent or buy?

Based on the data from the last few years, renters have been more successful financially. In addition to falling house prices, maintenance costs and fees can add up for buyers. However if you are looking for a home rather than an investment, the financial commitment should be viewed as part of your family life rather than just numbers on a page.

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