Buying vs Renting – Which is Better?

Posted 11 March 2019 by Nick Parkhouse

New research has shown that renting is cheaper than buying. But which is best? Here’s your guide to buying vs renting...

Recent research from the Halifax has revealed that the gap between the cost of buying and renting a home is at its lowest for nine years.

Buying a property has generally been cheaper then renting, but with the gap narrowing is there still an advantage to owning your home?

In this guide we look at the pros and cons of buying vs renting. Keep reading for more tips and advice.

Weigh up the costs involved in buying or renting

New figures from the Halifax have revealed that the gap between the cost of buying and renting fell by 59% in the last year.

In 2017, if you bought your home you’d save an average of £900 each year compared to renters. However, according to the lender’s figures, this amount fell to £366 in 2018.

In December 2018, the average housing costs for a three-bed home in the UK were £729 if you have a mortgage, compared to £759 if you are renting the same property type.

Deciding whether to rent or buy can also depend on whereabouts in the UK you live.

For example, the Halifax research found that Scottish buyers save an average of 20% compared to people who rent, equivalent to £1,574 each year. Buyers are better off than renters in Wales by more than £2,000 per year, while buyers in Northern Ireland save an average of £382 compared to renters.

However, in Yorkshire the gap is only 5%, with buyers enjoying a £361 average saving versus renting their home.

Russell Galley, managing director at Halifax, says the gap between buying and renting is narrowing, primarily driven by reduced first-time buyer prices deposits in some regions and continuing house price growth, meaning buyers are paying more on their mortgages.

He adds: “With more products available for borrowers, these factors combined have pushed up the price of buying quicker than the price of renting. Meanwhile, the cost of rent, household maintenance and average deposits have remained broadly flat.”

Bear in mind that while buying may currently be cheaper, future rises in interest rates could make your mortgage more expensive. You need to be sure you can continue to pay your mortgage even if your monthly repayments rise.

Read: Your complete guide from switching from renting to buying your home

Upfront costs

Renting and buying a home come with very different upfront costs. When you buy a property, you’ll need to fund upfront fees including:

  • Your deposit – at least 5% of the purchase price of the property
  • Conveyancing/solicitor’s fees
  • Survey fees
  • Mortgage arrangement or broker fees
  • Stamp Duty

Renting a property typically comes with fewer upfront costs. You’ll normally have to pay a deposit of 1-3 months’ rent and perhaps some administration fees.

Maintenance and dealing with a landlord

As well as your monthly rent or mortgage cost, one of the main differences between buying and renting concerns who is responsible for repairs and maintenance to your home.

If you buy your home, you’ll be responsible for its upkeep. This means you’ll have to pay for any repairs, improvements or maintenance – and this can include everything from painting the walls to a new roof or boiler.

The advantage of home ownership is that you can make any changes and improvements that you like to your property. You don’t have to ask anyone’s permission to hang a picture, paint the walls, or upgrade your kitchen or bathroom.

Read: Your complete guide to extending your home

If you rent your home, then your landlord will be responsible for any repairs. While this may save you money, the downside is that you will have to rely on your landlord to ensure your home is maintained properly.

Some less scrupulous landlords fail to look after repairs in a timely manner, an this can make living in a rented property a difficult experience.

Flexibility vs stability

One of the main advantages of renting your home is that it gives you flexibility to move at the end of your lease. Getting out of a lease is typically much easier than selling a house and so renting gives you flexibility if:

  • You’re only working in an area for a short period
  • You are not sure what your employment or family circumstances will be in the future
  • You need to retain the opportunity to move easily.

Of course, the downside of renting is that you could be given notice to vacate the property by your landlord at any time. If your landlord decides to sell the property, then you may only have a month or two to move.

Owning your property gives you the stability that you can stay in your home for as long as you like. However, you should bear in mind that selling your home can take time, and so if you do have to move there will be costs and time involved.

In addition, splitting a property that you own if you separate and divorce can be complicated and expensive.

Building up equity

When you rent a property, your monthly payment goes to your landlord. Many people refer to renting as ‘dead money’ as you never build up any equity in the property. You don’t ever own the asset or benefit from any increase in the value of your home.

When you buy a property you own it, and any equity that accrues. Over time, property tends to increase in value, meaning that as the value of your home rises, the equity you build up also rises. The downside is that if the value of your home falls then you could end up in negative equity.

In addition, once you have paid off your mortgage you will own your property outright. You won’t have to worry about paying for somewhere to live as you’ll own your home.


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