There comes a time in most people’s lives when the dilemma to buy or rented is most apparent. So why is it tough to know when to buy a home? Well, there is no shortage of content online that’s contradictory, so, understandably, there is a lot of indecision when it comes to committing to homeownership.
You may have heard property experts say it’s always a great time to buy or timing is everything. So which is it? One of the other, both or neither! If you’re confused about what action to take, you’re not alone. Indecision is probably the main reason prospective first home buyers are still renting.
Indecision or Procrastination
Are you struggling with the commitment to buy a property? Not everyone wants to be a homeowner. There is no right or wrong reason for your decision to rent or buy. Many prospective first home buyers struggle with the sales transaction. Once they sign the sales agreement, there’s no going back.
Maybe it’s the location of the property that’s just not working for you. When you’re renting, you can choose the exact location you want to live in, whereas location depends on affordability. For example, renting in Chelsea, London is more affordable than buying.
While buying a property is more cost-effective than renting, it seems location really does play a huge role in affordability.
A recent study by the Telegraph on Hometrack and Zoopla found out that;
- Areas with higher property prices have cheaper property rentals
- Areas with lower house prices have higher rent
Areas That are less costly to buy than rent.
Apart from Scotland and Wales, every local authority in the north-west and north-east of England has properties that are less costly to buy than rent.
London the anomaly
London is the only place in the UK where the cost of renting a property is lower than the price of buying one, and the weekly rent rate is lower compared to other cities.
Buy In The North
The north has lucrative and affordable housing prices and market.
The northern part of England has properties cheaper to buy than rent, especially its north-western and eastern parts, making the region an excellent place for investors and homeowners.
Areas such as Leads have close to 20% rate difference between renting and buying a property as the cost of renting a property here is close to £623 while purchasing one is £498.
Midland’s High Demand
With a 22.7% rate between the rental and property purchase costs, the demand to buy property has soared high in Birmingham. The area’s average cost of purchasing a property is £512 while renting is £663.
Manchester & Liverpool
Manchester also has a whopping 28.4% percentage difference between the cost of buying and renting a property. And the area with an enormous difference between renting and buying a property is Liverpool which currently stands at 40.6%.
In the UK, the North’s property markets are the lowest and provide many investment opportunities. What may work best for prospective homeowners struggling with indecision is choosing the rent and buy.
No Need To Compromise
Getting onto the property market can be an achievable goal without compromising on your lifestyle. If where you live is non-negotiable, i.e. location, choose to rent but buy an affordable home in an area favourable to homeownership. In the north, you can buy and rent out your first home. There is no rule that you must live in the property you purchase. 🙂
Later on, when property prices have gone up and there is more equity in your rental, you can make another decision to get you into your own home. Do you sell the rental property and use the profit for a deposit on your own home in a location you desire?
Or do you keep the rental property and leverage the equity for the deposit on your own home? If you’re asking yourself these questions, you’re in a good position and thankful you decided to buy your first home when you did.
It’s hard to argue against either line of thought about homeownership – i.e. timing is everything, but you create the timing through knowledge and knowing how to minimise the risk, which makes it always a good time to buy.
Are you considering buying off-plans? See our article here.
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