Whether you’re looking to move into your first home, or are looking for a change, you may be wondering if you should buy or rent. Which option is more suitable for you will be different for each individual. Your specific circumstances, what your property requirements are and your financial situation will all play a part in your decision. As with any significant financial decision there are benefits and drawbacks to both options. In this article we will discuss the benefits and drawbacks of renting and buying.

Benefits of renting a property

Flexibility is one of the greatest benefits of renting a property. Not only do you have the flexibility to move locations around the country as you wish, at the end of rental agreements. You can also up-or down-size as needed too. Maybe your family is expanding, or your children are grown up and moving to their own property. Or maybe you want or need to move to be closer to family. Renting does not tie you down to a specific area. It gives you the freedom to take up new opportunities that are offered.

If you’re moving to a new area, renting can give you the opportunity to get to know an area. There may be a locality that offers great access to the amenities you need. Renting allows you to find the perfect area for you before settling down. It also means that you may be able to afford to live in an area that you could not afford to live in.

Financially, renting a property has a lower financial outlay in the short term. A month or two of rent is usually required as a bond to secure a rental property. However, this is still significantly less than is required for a deposit on a property purchase. Renters also avoid the financial costs associated with making a purchase including stamp duty and solicitors fees.

Your landlord has certain obligations when you rent. One of these is to organise and cover the costs of any maintenance and repair work that needs to be carried out. With some repairs this could be costly, for example if the boiler breaks. Without having these ad hoc and unexpected costs to consider, it can be easier to budget. This is another significant benefit of renting a property.

Drawbacks of renting a property

Despite the benefits of renting a property, there are also drawbacks. Whilst you are making monthly payments, these will not lead to you owning your property at the end of the term. Some landlords also have tenancy rules. These may include about decorating the property or the use of nails in walls to hang pictures. With regards to repairs, whilst the tenant is not usually liable for the cost, the repairs may not happen as quickly as would be the case if the tenants were organising it.

Financially, rental payments can be higher than mortgage payments on a monthly basis. Whilst rent may be agreed for the duration of the tenancy agreement, if the agreement is extended, the price may rise.

Benefits of buying a property

As with renting a property, there are both benefits and drawbacks of purchasing a property. One major benefit is that the money you pay each month for your mortgage is working towards you owning the property once it is paid off. Should the value of your property rise, you’ll increase the equity you have in the property. If you come to sell it, you’ll see the benefit of this increased equity. Conversely to if you are renting, there are usually no restrictions on redecoration should you choose to, either.

Buying also affords you security in your living arrangements. With a fixed rate mortgage, monthly payments are the same amount each month, for the duration of your mortgage term. This allows you to budget more effectively.

Drawbacks of buying a property

The biggest drawback to buying a property is the large financial outlay at the outset. You will usually need a deposit to put down against a mortgage, which is usually at least 10% of the purchase price. In Newcastle, the average price for a house purchase was £207,000 in September 2024, according to the Office of National Statistics. This would therefore require a deposit of more than £20,000. There are additional costs involved in purchasing a property, that must also be taken into consideration. These include Stamp Duty, solicitors fees, the costs of surveys and more.

Whilst renting a property comes with the benefit of flexibility, purchasing a property is the opposite. If you move into a property and find that it is not suitable for your needs, or you just don’t like it, you may be unable to do anything about it. Some mortgages require at least one year of payments before you are able to make any changes. If you have a mortgage on your property, your home is also at risk of repossession should you default on payments.

A benefit of purchasing a property is that if the property value increases, your equity in your home increases. However the opposite is also true. Should the housing market have a downturn, and the value of your property falls, you may end up in negative equity. This means if you were to sell your property, you may be unable to pay off the balance of your mortgage. This can leave you in a position where you are unable to move house.

Which option is right for you?

As we discussed earlier in the article, the decision of whether to rent or buy is personal to you and your circumstances. Speak to an estate agents in the area you’re looking to move, such as Bell Estate Agents. They will discuss your requirements and budget, and help you to make the right decision for you.