If you are in your early 20’s should you buy or rent property in London
I bought my first home in Harrow, NW London, at the age of 24 back in 1989, it was simple back then even with 15% interest rates. Assuming that mortgages are simple to access (hardly the case in 2015), let’s compare the pros and cons of both buying and renting properties for the younger generation. You may even be of the mindset that living with Mum and Dad is the easy option and don’t see the need to move out, I personally know one individual, a professional businessman by the way, who is rapidly approaching 50 and still living at home, and if you think that’s bad enough he lives there with his older Brother!
Advantages of buying
Happiness – Buying your first home is a milestone in your life and often linked with other significant moments like having children, marriage and getting that dream job, if you achieve all of the above in your 20’s hats off to you! With mortgages available for up to 25 years buying a home in your early to mid 20’s means that you could be fully paid up by the age of 50!! Housing is the biggest single expense in life, if you can reduce that to zero it takes so much financial pressure off you meaning more social and family time and less work from 50 years onwards.
Investment – Though real estate is a volatile market there is a good reason to purchase property while you are young with the aim of having it as long-term asset. Certainly, you will enjoy the contentment of owning a property, and still have a chance to resell when it has appreciated. The reality though is that you really can’t ‘realise’ any profit for many many years as usually home owners ‘buy up’ purchasing bigger homes for an ever expanding family. Although the mortgage stays the same and is manageable its only when your children leave home and you find your self downsizing that you can ‘realise’ your investment, and that is called retirement! It’s a positive negative!
You could also buy to rent which would give you the investment opportunity at the same time as having the flexibility to move around in your younger years.
Look & Feel
As opposed to renting where you are limited to what you can do with the property you can create that perfect living environment exactly the way you want it to look and feel. This also increases the value of your property so its money in the bank
Disadvantages of buying
Buying your first home is a huge commitment not to be taken lightly, yes its all exciting just thinking about it but there are many factors to consider;
- is your job stable enough
- are you planning a family in the near future
- can you afford to live where you want to
Not only that but the legal and other costs associated with buying a home such as stamp duty, surveyors, estate agent, solicitor, deposit are just a few to consider.
Immobility – Settling in one property prevents young people from trying other possibilities – think of travelling globally or seeking that dream job, in another country possibly. When buying you would be looking to stay for three to five years on average whereas renting you have flexibility to exit your lease half-way through the term if a get-out clause is in place.
Maintenance costs – People often miscalculate the cost of maintenance and upkeep of a property. Clearing blocked drains, central heating issues, electrical wiring faults, roofing issues, kitchen and bathroom leaks, carpets, curtains, other home decor and refurbishment all of which cost money, and a lot of it. Not only the costs associated, but also the time as most young home owners will attempt to do the work themselves, this believe it or not will cause social issues as most of your spare time will be taken up renovating your home.
Advantages of Renting
Flexibility – So you have recently graduated from university and started a new job, however, can you tell where you are going to be in 4 years’ time? Renting lets you easily change locations whenever you want. This is your time to explore new places. Maybe even “find yourself” or that significant other?
Finances – Chances are if you get a job in Central London your pay will be higher than the national average, however, you may have a student loan debt to repay. Renting gives you an opportunity to choose, depending on how your finances are at that particular time.
Social Life – Living with friends is sometimes fascinating and staying with them in a rented place is less stressful than living with them on your own purchased house. You can leave a shared rented house whenever you have a disagreement with your friends, which is hard to do in a purchased house. Choosing the right house mate to move in with should prevent any issues further down the line though.
Disadvantages of renting
Control – Unexpected landlord visits may feel like an invasion of privacy, although there are strict guidelines for landlords which they should abide by. Living in a rented place leaves you with no alternative but to follow the landlord’s set rules and regulations.
Financial loss – In the short-term, renting can save you money nevertheless rent money is dead-money.
If you are a key worker or on low income it may be possible to part-buy a property with help from the UK Government with their affordable home ownership programme.
All in all, choose what suits your lifestyle or what fits your finances. And when it is time to move feel free to contact us. We are the best budget man with van company in London and we can guarantee you a safe and efficient move. Reach us using the info on the right for all your questions and concerns.
Please take a second to +1 this post using the G+1 button below, thank you for reading!