To Buy or Not to Buy – The Pros & Cons of Becoming a Homeowner

The thought of buying a home is as exhilarating as it is daunting, especially for first-timers. It can also get the pulse racing for those looking to upgrade to a larger property, or later in life, for individuals considering downsizing.

With the property market constantly evolving, and values rising and falling (depending on which news channel you subscribe to) a common query we often hear is…

“When is the right time to invest in property?”

With the prospect of a change in the minimum deposit to loan value, this question gains even more significance. At the time of writing this article, we’ve yet to hear if the Spring Budget is to introduce the already rumoured and reported 1% deposit mortgage.

If 1% deposit mortgages become a reality, it could encourage those caught in the rental sector to finally secure their own home. At present many renters are finding it impossible to save enough, a situation made worse by the cost-of-living crisis. If there’s a supply of affordable housing it could help to change the dynamics of property investment, making it an opportune moment to assess the long-term benefits of home ownership over any short- term risks.

So, let’s look at those risks and the upside to buying your own home.

Long-term Benefits over Short-term Risks

Investing in property should always be viewed through a long-term lens. Despite the fluctuations in market prices and the potential for economic downturns, the history of property investment shows a general trend of appreciation over time. The benefits of

building equity, the potential for rental income, and the security of owning a home often outweigh the short-term market volatility.

Pros and Cons of Buying a Home

To help navigate the decision-making process, here’s a few key pros and cons of buying a home:

Pros:

1. Equity Building: Every mortgage payment is a step towards owning more of your property outright, akin to a long-term savings plan. If you’re confident with DIY, and have trade contacts or skills you could consider a property that needs work and immediately add value. [See Homes Under the Hammer for tips!]
2. Stability: Homeownership offers a sense of stability and security, providing a permanent place to call your own.
3. Investment Potential: Over time, property values typically increase, offering the potential for a return on your investment.
4. Creative Freedom: Owning your home means you can customize it to your tastes without needing permission from a landlord. If budgets and planning permissions allow, you can also extend and re-design your home.

Cons:

1. Upfront Costs: The initial costs of buying a home, even with a 1% deposit, includestamp duty, professional fees, and other related expenses. Be sure to cost it out.
2. Maintenance Responsibilities: Homeowners are responsible for all maintenance and repair costs, which can be unpredictable. Ensure you obtain full structural surveys onany prospective property to avoid buying an unexpected money pit!
3. Market Risk: Property values can fluctuate, which might affect your investment in the short term. Don’t panic, economic conditions will impact many aspects of ourlives remember
4. Less Flexibility: Selling a home and moving is a more complex process than ending arental lease, offering less flexibility to relocate.

The Outlook

Regardless of the prospect of mortgage deals, the long-term benefits of property investment present a logical argument for buying a home. While it’s important to carefully consider your financial situation, have an awareness of your regular monthly outgoings and readiness to take on the responsibilities of homeownership, the current climate still offers a unique opportunity for prospective buyers.

While the decision to buy a home is highly personal and dependent on individual circumstances, the long-term advantages of owning property, make it an option worth considering.

Samantha Cook – Partner
Residential Property
Sherborne & Wells samantha.cook@mogersdrewett.com tel 01935 813691