The benefits of buying a home vs renting in the UK

Most people in the UK have dreamed of buying their own home at some point. But with soaring house prices outstripping wage growth, it can sometimes seem impossible.

Renting, as a result, has long been the achievable and affordable option for those who want to live in a specific area but are unable to buy in that same location. However, it can come at a cost.

According to the HomeLet rental index, house rent prices are now at a record high with an annual increase of 8.6% between February 2021 and February 2022. This means you’re putting more of your hard-earned money straight into the pockets of your landlord.

So which is best, renting or buying? Well, it all depends on your individual needs and financial circumstances.

Here, we’ll talk through the cons and benefits of buying a home vs renting in the UK. We’ll also explain how Adjoin Homes serves up the best of both worlds.

The pros and cons of buying a home

Buying a home is an investment. And with house prices continually on the up—particularly in major cities like London—it doesn’t take long to make a return on your money. In 2021 alone, average house prices in the UK increased by a whopping 9.8%. 

So if you are buying a house, you’re probably putting your money to good use. Other benefits of buying a home include:

• Lower monthly payments: Depending on the area you’re living in and the size of your mortgage, monthly mortgage payments are often smaller than rent. 
• The house is yours: When you’re a homeowner, you call the shots. This means you can decorate the house however you like, live with whoever you like (including pets) and make any structural changes (assuming the relevant permits have been obtained).
• Security: Not only is buying a house often a great investment, but it also creates a safe and permanent living environment. You needn’t worry about your landlord selling up at short notice and forcing you to move!
• Complete control: When you own your home, you can decide how long you live there. You won’t be tied into any tenancy agreement and you won’t need to rely on anybody else to solve issues like broken boilers and showers.
• Pride and joy: Buying a house feels good. Not only is it a great accomplishment, but you’ll also get the benefits of feeling like you’re part of the local community.

However, there are a few downsides to buying a home. According to Hamptons International, it takes almost 10 years on average for someone to build up a 15% deposit needed to buy. Other disadvantages of buying a home include:

• It’s expensive: Not only will you be required to pay a significant down payment to secure the house, you’ll also have to pay out stamp duty, legal fees and maintenance costs. And if interest rates rise, your monthly mortgage payments may increase.
• No guarantees: While buying a house is an investment, there’s no guarantee that your house price will rise. If your house value falls below the price you paid, you can lose money.
• More difficult to move: Selling your house can take time. If you decide you want to move, you’re at the mercy of the market.

For Harriet Jones, buying a house in 2014 has already been a great investment with his property in Gosforth, Newcastle-upon-Tyne rising almost 40% in 8 years. 

“Having rented for 10 years, it broke my heart paying so much every month and not getting anything out of it,” says Harriet. “Once I’d finally saved up a deposit, I was able to buy my own home. The capital growth on my property feels like a great achievement.”

The pros and cons of renting a home

Due to the financial requirements of buying a house, renting is often seen as the most realistic and attractive option to those that can’t afford to get on the property ladder. The benefits of renting a home include:

• Lower financial risk: Renting a home is less risky than buying. You won’t be tied into a long-term mortgage deal so if your financial situation changes, you’re free to move elsewhere. You also needn’t worry about house price movements and interest rate changes. All you need to do is keep up with your monthly rent payments.
• It’s fast and easy: Compared to buying, getting onto the rental ladder is quick and relatively straightforward. And if you decide to move, you can do so without the headache of selling your home first.
• No need to buy furniture: Rental properties often come furnished so you needn’t worry about the costs and hassle of buying furniture and white goods.
• Higher standard of living: Since renting requires smaller down payments and upfront fees than buying, you can often live in a better quality home in a more desirable location.

• Less additional expenses: Unless stated otherwise, your landlord is responsible for any maintenance costs. So if you experience a pipe leak or broken window, you won’t have to pay for it. 

But there are also cons to renting a home. Some of the disadvantages include:

• Zero equity: When you rent, anything you pay goes straight into the back pocket of your landlord. But when you buy, your monthly payments go towards paying off your mortgage, helping you build up housing wealth in the process.
• Limited options: Generally, you can’t decorate or make changes to a rental property. If you wish to paint a wall or hang up a shelf, you’ll need permission from your landlord first. You’ll also need your landlord’s approval if you want to live with a pet.
• Less stability: Once your tenancy agreement ends, your landlord has the right to change your terms. In theory, he or she has the right to evict you or increase your monthly rent payments.
• Less choice: Depending on the area you wish to live, you may find it hard to get a property that’s suitable. For example, those with families might find it hard to rent a 3-bedroom+ house in certain areas. 

How adjoin provides the best of both worlds

There are cons and benefits of buying a home vs renting in the UK. But Adjoin Homes offers the best of both worlds. 

If you dream of buying but can’t quite keep up with the UK’s soaring house prices despite having a relatively high salary, an Adjoin Homes rent-to-own scheme provides the perfect solution. 

Our solution is aimed at working professionals who are struggling to get on the property ladder. At any time during the agreement and up to 12 years, you can choose to purchase the property or walk away if you change your mind. You can also choose a payment plan that suits you and your circumstances. Through our tailored packages, you can move into your dream home now. 

In Summary

The decision to buy or rent a house completely depends on your individual needs and circumstances. If money is no object, your best option in today’s circumstances is to buy as you’ll likely be making a good investment. You’ll also enjoy security and complete control over your property.

If, however, you can’t afford to buy where you want to live, renting is a good option. It’s easier and more flexible than buying a home and you’ll be able to move out at the end of your tenancy agreement if you wish.

But if you can’t bear to see your rental payments going straight into your landlord’s back pocket, an Adjoin Homes rent-to-own scheme provides the perfect solution. You’ll build up housing wealth as you go with your monthly payments contributing to what you get at the end. 

Getting into your dream home is now a possibility…