Our last newsletter threw a lot of research and reading your way, so now it’s time for something more personal. And what’s more personal than home?
We’re asked it a lot
A question we’re asked a lot is this: buying or renting – which is best?
It’s particularly prescient now given property and mortgages markets are in flux and a lot of people face a rethink.
We’ve recently met would-be buyers who say they’re shelving their plans. And we’ve met a handful of home owners who say they may soon sell-up and rejoin the rental market.
Not an obvious slam-dunk
In the Money Means Book we’ve a chapter dedicated to renting versus buying … and buying’s not the slam-dunk you might think.
In the UK we’re all about home ownership but that’s not the case everywhere. In Central Europe people choose to rent well into their 40s and 50s without the same social/ peer pressures to hop on the ladder.
Buying a home may seem the financially secure route, long-term, but on average it takes 15 years to save a deposit and you’re more exposed if trouble comes knocking.
If renting, you have flexibility. You can get out quicker with less paperwork and hassle and you can tag in a landlord for repairs, problems and fixes.
Do you have to own it?
In recent years, many have come to see a home as a financial asset … but it’s an emotional asset too.
It’s not carved into stone that you need to own that asset in order to see returns in intangible things such as security, happiness, peace and memories.
Is now a good time to buy?
The future is hard to predict. Sure, rising interest rates, high inflation, stagnant wages … indicators of a market slowdown are emerging but in property there are no guarantees. Prices might fall, but they very easily might not.
So don’t focus too much on the market. Instead focus on what’s best for you.
Property is a long-term commitment, financial and emotional. If you can afford to buy a home without overstretching — and your best calculations show you’ll have enough cash left over to pay for bills, life and emergencies — then make a decision based on what’s best for you, your loved ones and your situation.
What’s your home story?
Chanelle and Helena have two very different home stories. Neither’s wrong.
Helena moved to the UK from South Africa age 20. She rented five properties in eight years before jumping on the housing ladder at 28. Each rental property and subsequent move was right at the time.
Chanelle may be the other end of the scale. She’s 26, and lived at home until she bought her first house at 21. She bought again at 23 and, right about now, she’s planning to move house once more.
For a few months between properties A and B, she’ll be back to renting because, again, it’s the right move for right now.