Rent or buy?

NATIONWIDE confirmed a further 0.9% fall in the UK house price this month.

 

This is the 8th month in a row prices have fallen since their high in October 2007 and the downturn has led to enquiries asking if it is now a good time to rent.

 

The UK is unique in Europe, as most other countries already have a higher numbers of people that rent, rather than buy. The UK is obsessed with buying property. An English man’s home is his castle after all.

 

But consider some of the downfalls associated with ownership, and renting starts to look more attractive.

 

When you rent, the maintenance of the property is paid by the landlord and you can move more easily than those who have to sell and buy to do so. And if you’re renting and house prices fall, would you care?

 

A big advantage of renting is that you can stay in control of your savings, rather than having the majority of your wealth tied up in bricks and mortar. This allows you to invest more strategically to build funds for future use.

 

One use for these savings could be long term care in old age. If your money is tied up in your home, it could be taken from you to pay for your care. This results in a smaller inheritance for your family and high levels of stress when you are least able to cope with it.

 

But the UK is still in love with property ownership, and will continue to be so.

 

We should consider how to ensure our homes are left to our loved ones, rather than paying for our care in old age. This can be done, but independent financial advice should be taken to ensure that it is done correctly.