Rentals are so last year:
Does buying your own Home
still offer a 'win-win'
situation?

With Spring well on the way it is time to take stock of the future and make sure that we are making the most out of our decisions. Buying residential property is still a growing trend, and many industry pundits are amazed by the longevity of the current housing market’s popularity.

‘Rightmove’ predicts UK prices will rise 6% on average in 2007 which certainly means that it is not too late to get a strong foothold on the property ladder, protecting your future.

There are many advantages of owning your own home if you are looking at a long-term investment however it isn’t without risk as property prices can fluctuate according to interest rates, market demand and the economy.

Owning a home gives us all a sense of status and everyone enjoys the freedom to put their own stamp upon their habitat. However, having the freedom to choose the house of our dreams, in a location we desire, can often be thwarted by the reality of finding the initial 5% deposit – amounting to thousands of pounds and often taking years to save. Today’s property market shows that rental costs are often higher than the mortgage repayments on like-for-like properties, however, the deposit required for your dream rental home, typically at a month’s rent, is much easier to find.

House-builders are aware of this, which is why they have devised all sorts of cash incentive and start-up schemes in order to secure their buyers. In this current climate a deal can almost certainly be done! For example, a ‘Part Exchange’ scheme provides a hassle-free move. Typically the price is agreed and held from the moment you reserve a new home with a house-builder. They will then take care of selling your existing property while you concentrate on moving into your dream home. You save the cost of estate agent fees and remove the stress of having to find temporary rented accommodation and being caught up in long, unpredictable chains.

It is also wise to consider the extra costs involved when buying your own home. There are legal fees, property tax, insurance fees, repairs and renovations as well as the general upkeep and landscaping costs. If your taste is aimed at older properties with charm there are potentially huge unbudgeted costs, which can cripple your bank balance. Renting a property is not without financial or emotional pressures as the vendor can increase the rent or terminate your tenancy, after an agreed six or twelve-month period. You are also legally bound to adhere to the constraints of a lease agreement. Nevertheless, a fixed rent can allow you to budget more efficiently, as you are not financially responsible for the bricks and mortar, or indeed the internal appliances that could go wrong.

However, the overall feeling in the UK still seems to support the fact that instead of pouring hard-earned cash into renting, you should consider pouring it into your own foundations of your own home. But make sure you are aware of all the potential pitfalls and assess your circumstances. The pressure is on. With the national average price of a typical home in the UK rising year on year, you’d better make the right decision, and fast.

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