The debate of whether you should rent or own a home has been raging for a while and isn’t likely to end anytime soon. Both options have their own advantages and these can make the choice a little more complicated. To make matters worse, you could even build your own house, but we’ll come onto that below…
- Monthly payments go towards buying a home permanently.
- You’ll live rent free once you’re done paying back the mortgage.
- You can gain if the value of the house rises.
- You can live as you want and do more or less as you please with the house etc.
- It’s easier to move if you get sick of the house or location.
- The process is faster than buying.
- You lose nothing if property values drop.
- It’s much cheaper in the short term etc.
- The price of land is cheaper than the price of a ready-made house.
- You can design the interior and exterior to your own taste.
- The house can be made energy-efficient, saving you money in the long run.
- You can go as slow or as fast as you want.
It’s clear that each option has its upsides. The prevailing opinion has always been that, if all factors are kept constant and assuming that you can afford it, buying is the more prudent option. However, in recent times buying a home in the UK is not so straightforward, which is why people are turning to renting and self-building. Renting is a quick option but you get very little flexibility and freedom with the rules of tenancy and it ends up expensive in the long run. Self-building, on the other hand, is a slow process. First, you need to hire a land clearing Roanoke contractor or similar contractor in your area to prepare the land, and gain planning permission for building. All of this is before you even have a house to live in, but it’s worth it in the end if you have somewhere to live temporarily whilst the house is built.
Location, Location, Location
However, even as certain parts of the country have witnessed an increase in property values, mortgages are still quite affordable in other parts. In almost half of the cities in the UK, the average mortgage repayment was less than the average rent. This phenomenon has mostly been seen in cities to the north of the country. In Glasgow, for instance, the average mortgage payment is 450 while the average monthly rent is 578.
In cities to the south, the difference is true with the average rent being much lower than the average mortgage payments. For example, in Swansea, the average mortgage payment is 800 compared to the average rent which stands at 600.
How much do you need to earn to live comfortably?
With these prices, the question of how much you’ll have to earn to live comfortably will come up quite often. The reality is that comfort will vary for each person but the figures obtained at the end of 2015 from some of Britain’s largest cities suggests that a family needs an average income of 49,700 per year to be able to afford a home. This was an increase of 4,700 compared to 2014.
In Liverpool, the values were much below the average at 24,000 while in cities such as London, the figures climb all the way up to 100,000. If you’re considering to buy a home, you should start by figuring out how much you’ll be paying for it each month. It may turn out that renting is a much cheaper option for you.
Either way, it’s important to find a living situation that fits you comfortably. You don’t want to be living from paycheque to paycheque, as if you find yourself in even the slightest bit of difficulty, you could have debtors at your door within a matter of weeks and no rainy day fund to save you.