2 Why buy your own home?
‘Getting onto the property ladder’ is a phrase that you hear repeatedly in the UK. This contrasts with most other European countries where ownership is far less common and renting properties throughout life is the norm.
Activity 1 Buying versus renting
What do you think are the reasons for buying your own property rather than renting? For example, think through the risks of renting, the comparative monthly costs, the costs over a longer time-span, the issue of investment and the level of security in each case.
- When you rent a property you might be given notice to move out if the owner wants to sell it or move into it themselves.
- You have freedom to renovate and decorate your own property as you want, although you will have to pay for the work yourself.
- House prices in the UK have risen markedly over time – even allowing for price inflation. So your home is likely to become a good investment. Note, though, that periodically house prices do fall – this can happen at times when the economy is weak and unemployment is rising.
- Buying a property can often be cheaper than renting. As you will see, buying a property involves upfront costs (such as legal fees) and ongoing costs (principally the cost of the ‘mortgage’ you’re likely to need to buy your home). However, in aggregate, these may be less than the rent on a rental property. In addition the money you spend when you buy is going towards eventually owning the property outright. By contrast the money spent on rent is commonly called ‘dead money’ as you do not end up owning the property.