Beware the hidden regrets of buying versus renting

Kirsty Mcluckie ruminates on the perils of offering advice

In these days of having to jump through hoops to purchase your own home, we are encouraged to feel sorry for those who can’t get on the property ladder.

The decline in homeownership has social repercussions but on an individual level it can be miserable to be settled in a job and a relationship but still have the uncertainty of living in rented accommodation if you would rather not be.

But there is the other side of the argument. A contemporary in age, who has never owned a property, says that although she used to worry about her tenant status when her children were small, her feelings have changed recently.

Now, as a newly single woman with grownup children, she is glad that she doesn’t have the burden of a mortgage or a house to sell as she wishes to embark on a new phase of a her life.

Relieved of the financial responsibility of children, and without prolonged negotiations with her ex-husband over the family home, she has made a snap decision to start a degree while working part time.

She just handed back the keys to the landlord and found a nice affordable flat to rent in the new location.

She has no regrets, but that isn’t something every house buyer can say.

To my shame, I remember a group of us advising – perhaps even hectoring – a colleague in his late 40s on a decent salary to buy a property, as, in our opinion, renting was a surefire waste of money.

He eventually caved in and purchased a flat which then promptly cost him a fortune in communal repairs and unexpectedly high factoring fees.

To make matters worse, the purchase was made in around 2010, at the top of the market and so it probably took him a good few years before he could get his money back by selling.

I can’t imagine that he looks back particularly fondly on our “common sense” advice.

Equally, regretting buying a particular property is a horrible feeling but apparently not an uncommon one.

Interiors specialist www.hillarys.co.uk, in a poll on the subject found that 25 per cent of respondents who have bought in the last two years regretted their decision.

Nearly half of these said that unexpected problems were the cause of their regret, such dodgy electrics and poor insulation.

When asked how much they estimated they had spent fixing these problems, the average was £4,550.

Despite this, the latest Halifax buying vs renting review found that firsttime buyers are better off financially than renters.

The average cost – including mortgage payments – of buying a three-bedroomed home in the UK was £679 a month in December 2017, compared to the average monthly rent of £754 for the same property type.

Buying is consistently more financially attractive than renting across the UK, with some of the biggest savings made in Scotland where the cost of buying is 17 per cent lower than renting.

It is true that rents are on an upward trajectory, while mortgage rates are comparatively low and competition between lenders means that the market is throwing up some good deals.

But interest rates are on the rise and so before I would advise anyone swithering to leap blindly on to the property ladder, these days I would perhaps be more cautious, and less hectoring.