Busting the myths: new research challenges assumptions about the cost of renting
- 27th January 2017
- Renting Property News
Deciding whether to rent or buy depends on individual needs, but many financial benefits of renting have been under-stated
There’s a widespread view that buying a property is of greater financial benefit than renting. New research from the University of Stirling suggests this is not the case for many people. It says that the financial benefits of renting may have been under-stated.
Many costs borne by the landlord, such as building’s insurance and maintenance costs, are often overlooked and when they are factored in – along with any transaction costs on purchase (and sale) – the balance of pros and cons between renting and buying is more complex than many people think.
When it comes to which is better, there are many factors at play and it depends on each individual’s personal circumstances such as how long they are likely to stay in the same home, as well as wider economic factors such as whether the inflationary environment will help boost or erode equity. As we have previously discussed, renting can offer a flexibility in lifestyle to those individuals who want or need it for their career.
However, for households who face higher mortgage costs – or for people moving relatively rapidly up the housing ladder as their families grow or circumstances change, renting could actually be a more cost-effective choice.
Stephen Ludlow, Chairman at ludlowthompson comments: “This should raise a cheer from “Generation Rent” because it highlights the unsung advantages of renting. As well as providing enormous flexibility over where you want to live, with whom and for how long, there are more financial positives than many people may at first realise.”
"Renting may also be a necessity for many individuals. For instance, many international employers require a mobile workforce, and for postgraduate students, especially from abroad, rental accommodation may be their only viable option."
“While home ownership may be a long-term aspiration for many, this gives assurance that renting is both a sensible option financially as well as practically in terms of lifestyle.”