After 20, or 30, or 40 years of renting, you own nothing. The bricks and mortar, which have been your home for decades, are no more yours than the sky or sun. Had you gained a mortgage for the same property you might have paid it off several years ago at a similar outlay per month – and now you would possess it lock, stock and barrel.
It sounds obvious that buying is better - but there are plus points to renting, as this article from financial advice website Moneyadviceservice.org.uk explains; although it you want to find out if you can afford a mortgage check out this useful tool.
Renting can be a lot less stressful. Faulty boiler? Call the landlord. Collapsed fence? Call the landlord. Vandals put a brick through the window? Call the landlord. You won’t have to pay for any of these repairs yourself.
And if you don’t like your rental home you can just give a month’s notice and move out, as easy as that. If you own a home it takes months or years to sell. You may get offered a dream job which you can’t take because you can’t sell your home in time.
Similarly, what happens to your family home in a divorce? A battle might ensue over ownership, and even if you agree a 50/50 split you may be unable to move out until the house is sold - because you will not be able to pay the mortgage and rent or buy another property.
As well as all the legal fees involved in divorce, you’ll also have the extra costs of putting the house on the market and buying a new one. Even if you do somehow move out, you may also face maintenance costs for any children as well. This article by The Guardian reveals some of the difficulties divorcing homeowner couples face.
In other European countries, particularly Austria, Denmark and Germany, buying is not viewed with the same importance, as it is in the UK – indeed many people are happy to rent. Only 41% of Germans own their homes, compared to rates as high as 83% in Spain and 81% in Ireland. There are many reasons for this – it is cheaper to rent in these countries, and the rental market is regulated differently, prohibiting steep rental rises, as this piece by Quartz.com explains.
Renting will not buy you a home, but it will buy you freedom. The teenager or 20-something who wants their own space and immediately buys a home is a rare beast indeed.
Many rent for a few years, saving for a deposit and perhaps gaining a partner, before finally buying their own place together. Living at home might be cheaper, and this article in The Guardian shows that the current housing and job markets mean that record numbers are doing so, but it is not good for self-esteem – while renting gives a young person a chance to spread their wings.
Overall then renting does not buy you a house, or even a share of one. But its benefits should not be ignored.