Buying a house is a significant decision that requires careful consideration of the pros and cons. On the one hand, owning a home provides financial stability and security, but on the other hand, it also requires a significant financial commitment and responsibility. We explore the pros and cons of buying a house.
Pros of buying a house
Freedom and control
One of the best perks of buying a house? You make the rules!
Owning a home gives you the freedom to customise your living space according to your preferences and needs. You have the power to make changes to the property and create the living environment that suits you best.
Buying a house is an investment
One of the most significant benefits of owning a house is building equity. Equity is the difference between the value of your home and the amount you owe on your mortgage. As you make your mortgage payments, your equity increases, and you build wealth.
No rental uncertainty
Homeownership provides stability and security for you and your family. You don’t have to worry about a landlord selling the property or raising the rent, which can disrupt your living arrangements.
Resolve issues fast
Another upside of owning property is control. You handle any issues that arise yourself.
If you have a broken shower or damp issue in a room, you take ownership of finding a resolution. This means you can fix it at your own speed, within your budget, to a quality that satisfies you. There’s no need to rely on anyone else.
Become part of the local community
Buying a house helps you settle down for the long term. This helps you become part of the local community. From local facilities to schools, you and your family can find a place to call home. Owning property in an area gives us a sense of belonging and permanency.
Own the property outright
At the end of your repayment mortgage term, you’ll own the property outright. This is a seriously attractive situation. You’ll substantially reduce your monthly outgoings and have a significant asset behind you.
Want to know how long it’ll take you to pay off your mortgage? Give this handy calculator tool a try.
It feels good!
Owning a property comes with responsibilities, but also gives a great sense of satisfaction and pride. It offers a safe environment for you and your loved ones to live in. If managed sensibly, it can become a valuable asset at the same time.
Cons of buying a house
Inevitably, there are some downsides to owning your own home.
Buying a home is a huge ongoing commitment, so you need to consider the potential downsides of property ownership before taking the leap.
Buying a house requires a significant amount of upfront costs, including a deposit, home moving costs, and other hidden costs. This can be a significant barrier to entry for some, especially for first-time homebuyers.
Owning a home ties you down to a particular location, making it difficult to move if you need to relocate for work or personal reasons.
Maintenance and repair costs
Homeownership comes with ongoing home maintenance and repair costs. You will be responsible for repairing any damages or issues that arise, which can be expensive.
Interest rates can rise
You’ll be paying interest on the money you borrow to buy your home. You need to be aware of the effect an increase in interest rates can have. Even a small uplift can dramatically alter a family’s budget.
There is a way to mitigate against unexpected interest rate rises. Consider a fixed-rate mortgage for a period of time so you can manage your monthly budget.
Buying a house is expensive
Expect to pay out additional and unexpected costs to maintain your house. Some properties are a lot easier to maintain than others – modern flats and new builds will need minimal work/money spent on upkeep. Though some properties can become a real drain on your resources.
Don’t just consider mortgage payment costs when working out affordability. Think about the ongoing cost of ownership, such as homeowners insurance – especially if you’re buying an older property. Even if you manage to negotiate your house price down, upfront payments aren’t the only costs you need to worry about.
You can’t assume property value will increase
While property values generally appreciate over time, they can also decrease depending on market conditions. If you need to sell your house during a market downturn, you may end up selling at a loss.
If your property ends up being worth less than the amount you outlaid to buy it, you could run the risk of going into negative equity. This means selling your home may not generate enough proceeds to repay the amount you borrowed. This is a very unfortunate position to be in.
Some people prefer to rent
Some people just prefer to rent – they have no definite ties to their home, any issues are resolved by someone else and they don’t have to commit for an extended period of time.
Usually, if you’re renting, you’re not responsible for the cost of maintenance. For those who want to avoid the headaches of ownership, renting is a perfectly viable option.
Decided on buying?
It is important to carefully consider your financial situation and lifestyle goals before making a decision to buy a house.
If you have financial stability and are ready to settle down in one location for several years, homeownership can be a good long-term investment. However, if you value flexibility and do not want to take on the responsibility of ongoing maintenance and repair costs, renting may be a better option.
First things first – speak to a mortgage adviser, find the right mortgage for you and know what you can afford.
Last Updated: September 25th, 2023