The average monthly rent per household in the UK currently stands at £876 according to a rental market report from property search site Zoopla. On the other hand, the average monthly repayment on a mortgage is £723 according to Santander Mortgages. The fact that people spend so much on housing could explain why it is such a divisive topic. The eternal question is whether to buy or to rent — and it’s probably a question you have pondered yourself.
While renting makes sense for those wanting more flexibility and little or no responsibility for property maintenance, there are several distinct benefits of buying a home that make it an excellent option. Let’s take a look at some of them.
Stability and peace of mind
Buying a home gives you a sense of stability. When you own a home, you can rest easy knowing that you will not have to deal with your landlord changing the rules or kicking you out of your home because they want to sell the property, remodel it or bring in a new tenant.
If you take out a mortgage to buy your home, as long as you make your payments, no one is going to interfere with your living. The monthly payments you make will go towards owning your own home rather than into the pockets of your landlord.
When you buy a home, you have the freedom to make changes to it as you wish. Whether it is repainting the walls, changing the landscaping, starting a plant garden or converting the garage into a painting studio, no one can prevent you from doing so. In your own home, you are also free to keep pets, something which many landlords frown upon and do not allow.
By buying a home, you get the freedom to live by your own rules and with minimal restrictions.
Value appreciation and equity building
In the absence of a major economic catastrophe, property value tends to increase every year. As this value increases and as you continue making mortgage payments, it’s possible to build equity in your home. Equity refers to the difference between what you owe on your home and what you could sell it for. It is the total value that is stored in the house.
If your home is worth £220,000 and you owe £180,000, then you’ve got £40,000 in equity. You can withdraw this equity and reinvest it, for example, into buying more property and therefore gain even more income. You might also decide to use the equity to fund your retirement. Either way, owning a house allows you to build equity – something that you will not be able to do while renting.
There are many other benefits of buying a home that are worth keeping in mind.
- Buying a home can help your credit score and therefore increase your chances of getting credit in the future. When you make regular mortgage payments, you prove your creditworthiness to lenders. As a result, lenders may agree further loans or raise your credit limit with little hesitation.
- Buying a home means that you have something that you can pass on to your children or other family members.
- A home that you have bought and own gives you a greater sense of privacy than a rented one.
- You still have flexibility. After buying a home, if your circumstances change, you can rent it out or sell it at any time.
Let’s be clear: buying and owning a home comes with several responsibilities, including making regular mortgage, home insurance, and property tax payments. You will also need to budget for repair and maintenance costs. However, these responsibilities are hugely outweighed by the potential benefits and enjoyment that comes with owning a home.
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