Buying vs renting: Do you really need to own your home?

A "chronic under-supply of homes could lock an entire generation of Britons out of the housing market, according to recent warnings from The National Housing Federation (NHF).

But is owning your home always better than renting? We look at the pros and cons of both options.
Buying is best
Recent research from Halifax reveals that the monthly costs associated with purchasing a typical first-time buyer, two-bedroom flat are £110 less a month than the rent you could expect to pay on the same property.

This marks a big change from 2008, when the average cost of buying was 29% - or £212 a month - more than the average rent paid.

Reasons for the swing include that lower house prices and mortgage rates have come own over the last few years, slashing the cost of getting onto the property ladder by a massive 40%.

Rents, in contrast, have only fallen by about 8% over the last three years and have actually jumped 6% in the past 12 months.

What's more, researcher Oxford Economic predicts that average rents will jump by almost 20% over the next five years.

So even with the burden of raising a large deposit, those who get on the housing ladder now could well be thanking their lucky stars in years to come.
Renting is right for me
It's all very well saying that owning a home costs less than renting one, but property prices still remain out of reach of average workers in many parts of the UK, with typical prices at £204,981. And this is keeping people out of the market.

Royal Institution of Chartered Surveyors (Rics) research shows that home ownership continues to fall in the UK, as well as in other developed countries such as the US, Australia and Ireland, to name but a few.

Andrew Haywood of Rics said: "By 2025 home ownership could be below 60%, while by as early as 2020, the private rented sector could well include more than 20% of all households."

Financial constraints are not the only reason more people are choosing to rent long-term, though.

The days of having a job for life are more or less over, with the majority of workers switching employers numerous times throughout their careers. Committing to a house purchase, and shelling out on mortgage and legal fees and stamp duty, can therefore seem less appealing.

For others, meanwhile, the responsibility and maintenance requirements that come with home ownership are also a deal breaker.
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