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“Just over half of Londoners live in a home they own”
Our #ThursdayThought this week is whether it is better for people in their 20s to rent or buy a property in London. Assuming that mortgages are easy to come by (hardly the case in 2013), we will now compare our most popular pros and cons of both renting and buying properties for young people:
RENTING PROS
- Flexibility – So you’ve graduated and started a new job but who knows where you’ll be in 5 years’ time. Renting allows you to easily move locations to wherever your new endeavours take you. This is your decade to explore new places isn’t it? Maybe even “find yourself”.
- Finances – The chances are, if you’re working in Central London, your wages are higher than the national average but you’ve probably got a student finance debt hanging over you. Renting allows you to pick and choose depending on how your short-term finances are looking at the time. Having landlords cover menial maintenance costs is also a weight off your shoulders.
- Social Life – This may be the last time you can live with your friends, and renting is a much less stressful affair than buying a property together. Also, in the unfortunate event of a complete dissolution of a friendship group, it is much easier to renegotiate a rental agreement.
RENTING CONS
- Control – Of course, different landlords will have different expectations of their tenants but it can often be a hassle having to regularly contact them to ask tedious questions regarding the property. Unexpected landlord visits can feel like a serious threat on your privacy.
- Financial loss – Renting can save you money in the short-term when your other expenses soar but in the long-term, rent money is ultimately a sunk cost – money that you will never get back or any return from.
BUYING PROS
- Happiness – Owning your own property is a big but exciting step, and often goes hand in hand with other significant joyous occasions in your life such as marriage, children and finding your dream job – things which many people find in their 20s.
- Investment – Although house prices are, and always have been, a volatile market – there is reason to buy a property as a long term tangible asset while you’re young. You’ll be able to enjoy the satisfaction of having your own home and still be able to resell when the time is right for you.
BUYING CONS
- Immobility – Being settled in one property can stop people from exploring other possibilities, whether it be a better job in another country or travelling globally. Owning your own home can also become a financial burden if you encounter an unfortunate circumstance such as redundancy or a failed relationship.
- Maintenance costs – People often underestimate the maintenance costs that come with owning your own home, especially if your past experiences of renting have been with co-operative landlords. If these accumulate, it can become extremely difficult to manage these housing expenditures.
ALTERNATIVES
- Live at home – That’s what parents are for aren’t they? Living at home would allow you to save up an appropriate amount of money, and you’d even have a slim chance of getting a mortgage in the future (although at present, if you’re a 20-something, they’re about as rare as a Willy Wonka’s Golden Ticket!).
- Move out of London! – Yes, it’s a fantastic city to live in but also the most expensive in the country. Why not settle somewhere else for a few years; you might enjoy the peace and quiet! (Hull is set to be UK City of Culture in 2017).
Pictures source: Pinterest. Quote source: http://www.londoncouncils.gov.uk/londonfacts/default.htm?category=10
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This is really great informative blog , if you are going away on holiday or for business, letting your property on a short let basis can be a very efficient way of ensuring your home is occupied as well as bringing in rental income at the same time.
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