Renting has become increasingly popular in the UK in the last decade. In 2017, 4.5 million households were living in rented accommodation, compared with 2.8 million a decade earlier. It’s clear from this leap in numbers that there are more of us favouring the ease of renting their home rather than saving for a hefty deposit. So, while the aspirations to get on the property ladder are still high on the agenda for many, it’s evident that for others being a tenant is a more desirable option or one that works better for them. If you’re currently renting and want to know why this could be more beneficial to you than buying, here are some top reasons why it could make sense to stay put.
Flexibility and freedom to move
Whether you’re a first-time buyer or you’re selling your second property, dealing with the property market can be a long, stressful, process. Having the freedom to move around without having to worry about being part of a chain or dealing with being gazumped at the last minute is a huge draw for renters.
As a tenant, you have a clear idea of how long you can stay at the property, which means you can easily start looking for alternative accommodation if you don’t want to renew your tenancy. This knowledge of how long your contract runs for is also beneficial as you can relocate to a different area, city, or even country when your contract comes to an end without being responsible for finding a tenant to take your place.
In some instances, you might be able to end your contract early, too, which adds another level of flexibility. Should your circumstances change and you need to move on quickly, this is an especially useful benefit of not being tied into a mortgage.
No mortgage to pay
A mortgage is a huge debt. In fact, it’s the biggest debt you will ever have to take out and it can take decades to pay off. This means that homeowners can’t miss monthly repayments, and if they do, they could see their credit rating damaged and, potentially, the property could be repossessed.
While there are repercussions to factor in if you miss your rental payments, such as the threat of eviction, as a tenant, you have more opportunity to look for rental properties at a price that suits your income should your circumstances change. Therefore, if you feel you can’t afford your rent for any reason, you might be able to reach an agreement with your landlord and find an alternative property in the meantime.
As a tenant, however, your landlord sets the rent. If they increase this, you have the opportunity to agree to the higher payments or move out. In addition, when you buy a property, the repayments are influenced by interest rates and you’re tied into paying your mortgage, even if the interest rates rise increasing the payment. You can of course, potentially shop around for a better deal, but again that likely comes with additional costs of conveyancing, legal fees and product fees of a new mortgage product. The best deals also likely come with a tie-in period, where if you choose to move before the end of the ‘deal’ period, you could face potentially thousands of pounds of ‘early repayment charges’. Ouch.
Being a homeowner means that you have responsibilities towards your own property, and these can be costly. Everything from ensuring the roof is functioning and in a good state of repair to checking the boiler’s in working order are things that you need think about.
Renters, on the other hand, aren’t responsible for the upkeep and maintenance of the property. If you’re a tenant, you do have to be concerned about causing any damage to your landlord’s property, but you’re not accountable for maintaining the structure of the building or the fixtures within it.
When you rent, you’re not restricted to one area. Homebuyers have a set amount to spend and need to narrow their search to fit their budget, while tenants can search in their preferred locations and potentially afford to rent in areas that they might not be able to buy in. Mortgages are often set to strict criteria with borrowing limits of X times your income, X% LTV (loan to value) calculations to consider, not mentioning ERCs (early repayment charges) if you want to move, whereas renting is a little bit more lenient. As long as you can afford the rent and pass your referencing checks, you're a lot closer to your new home than having to jump through the hurdles often required to buy!
The cost of moving house, as a homebuyer could potentially not be too dissimilar to the cost of a wedding. With estate agents fees, legal fees, stamp duty and removal costs – depending on the value of the property you’re buying and selling you could easily be looking at a five figure sum (or more). According to this news article by Which? Based upon the average house price of £216,096, the average moving costs could reach £10,414 in 2019.
You don’t have to think long-term
Unlike homebuying, which involves a search based on future needs, such as a growing family and decent schools, as a tenant, you can choose the area you live in based on where you want to be right now.
Your tenancy could last as little as six months, so if you’re working in a contract role or you know you’ll need to move on soon, you can plan for the short-term and not worry about what’s coming up in five years’ time.
Plus, as you don’t own the property you live in, you don’t have to worry about the property market and house prices. Future elections, government budgets and changes to legislation therefore, aren’t likely to impact on you in the same way as they do for homeowners, so this is another long-term factor that you don’t have to consider.
Are you renting in an apartment complex? If it’s a contemporary purpose built apartment block, you may even be lucky enough to have a gym downstairs or a shop in the lobby.
It’s about freedom
Ultimately, renting gives you the chance to choose what works for you both right now, and in the future. So, should you be offered your dream job in a different city or you don’t know where you’ll be in five years and can’t commit to a mortgage, being a tenant could be the best option for you right now.