Around 30% of adults do not own their own home, which suggests something more than financial constraints are at play. For many, renting is the sensible option. If you’re trying to decide whether to take the plunge and enter the owners market to increase your future financial security, or stay free as a tenant, take a glance at our pros and cons.
- You can save money. A house worth £650,000 costs £3,250 per month in interest (based on a mortgage rate of 6%). Even in London, it’s quite possible to rent a similar property for half that amount. Other costs like insurance should also be provided by the landlord, although it’s always worth seeking out your own contents insurance so you know you’re properly covered. Allianz Your Cover (www.yourcoverinsurance.co.uk) offers flexible, custom-made home insurance packages so you don’t have to rely on the landlord.
- No home improvements necessary. If you’re not too handy at DIY, and can’t afford to pay someone to fix that dodgy plumbing, renting takes all that responsibility and puts it onto the landlord’s shoulders. They are legally obliged to pay for maintenance and repairs, and it’s in their interest to get the job done properly. It also means you won’t get lumbered with an unexpected bill.
- Relocation is easy. If you are unfortunate enough to have difficult neighbours, or you go off the area you live in for some other reason, renting makes relocation relatively hassle-free. The cost of re-entering the buyer’s market can be significant, but for tenants it’s a question of providing six months notice, paying for cleaning costs and moving up and out without even thinking about stamp duty.
- You have no stake in the market. When the property market experiences the sort of boom that took place during the nineties and early noughties, the wealth of homeowners grows enormously. In the UK, personal wealth has increased by trillions of pounds since the start of that boom, and tenants don’t see a penny of it.
- Landlords. When it comes to interior decorating, some landlords are easygoing, some less so. It’s pretty much the luck of the draw that decides whether you’re going to be allowed to hang pictures or make other changes to your home. Dodgy practices are common amongst the less scrupulous landlords out there, so it’s a very important factor to consider when looking at renting.
- You could be evicted. Most private tenancies last a year and stipulate a notice period of one or two months, which means you could be evicted at the drop of a hat. Even if you have been the model tenant, you have no recourse when the owner decides to sell.