Should I Rent Or Should I Buy Now?
The recent turmoil in the housing market, over the past few months following the effects of the credit crunch, has had a profoundly negative effect on the number of first time buyers starting out on the property ladder.
With the average price of a house reducing on a month by month basis at the present time, and the increased difficulty and higher costs of obtaining a home loan to purchase it, it is not surprising that many potential first time buyers have been put off taking the plunge and have opted to rent a house instead.
There are of course advantages to renting a property. You don’t have to worry about finding a large deposit or being accepted for a home loan, although many landlords will require a bond and also screen potential tenants more stringently than they have done previously, often conducting a credit search on the applicant before letting the property. Also, a tenant doesn’t have to be concerned with factors such as negative equity if house prices continue to fall, or worry about the potentially high costs of property maintenance or repairs to their home, as the landlord will take care of such things.
However, for a first time buyer who has a reasonable level of deposit saved to put down on a house and who also has a good credit record, allowing them to be accepted for a home loan, now could be a particularly good time to buy that first property.
A recent survey has shown that someone purchasing a property could be much better off in the long term than one who is renting. It is a buyers market at the moment, with a large number and wide choice of properties available for sale and a vendor may be prepared to accept a significantly lower offer than the advertised price in order to sell their house.
In the long term, property will increase in value and by purchasing now, when prices are relatively cheap, a first time buyer has the potential for considerable growth in the value of their home over a number of years.
