Mortgage Advice in London for Home Buyers and Renters

If you are currently renting in London, taking the dive and purchasing a property will be a massive financial decision.

For many, it all comes down to affordability. In certain parts of London, the average monthly rent can be higher than your mortgage repayments. Thus making buying a much better option (as long as you have the right amount of deposit).

Everyone’s circumstances are different, that’s why, If you are in the position to either rent or put down a deposit on a property in London. We hope this article will aid First Time Buyers in London when it’s time to make that decision.

Buying a House in London

More often than not, especially if you are younger, parents will encourage you to invest in property sooner rather than later. There are pros to doing this, but there are cons too.

Mortgage Payments

It all comes down to the type of mortgage you are on. In certain parts of London, you are looking to buy or rent. You’ll find that your monthly repayments will be cheaper than renting.

For example, if you are on a tracker mortgage, this tracks the Bank of England’s base rate. So you’ll find your monthly mortgage repayments may be much lower than renting. However, this could fluctuate every month.

There are ways around this. If you got put onto a fixed-rate mortgage, your payments would remain the same until the end of your fixed term.

With rising maintenance costs and fluctuating interest rates, your landlord might increase your rent. However, it’s a rare situation if your landlord decides to reduce your rent.

Security 

As long as you can keep up with your mortgage payments, you will always have that sense of security within a home. No one can force you out of your own home as you are the property owner.

Whereas being a tenant leaves you with next to no protection against the landlord wanting you out. Yes, they will have to give you notice, but the landlord owns the property you rent at the end of the day.

All of this worry doesn’t come with owning a home. In some cases, landlords may be more considerate and extend your notice period. However, not every landlord is as lenient.

Uncertainty

The property market tends to reshuffle things now and again, the good news is when you find out that your house is going to go up in value. However, this works both ways and unfortunately, your property price can also go down in value.

History has shown that even if you purchase a property during the very peak of the market. Make sure you can afford to keep hold of the property, eventually property prices will go back up. During the credit crunch in 2008, sold values dipped dramatically. After a few years and backing from the government, the market shot back up.

If you have no choice but to sell your home, doing so at the wrong time may cost you losing money. Sometimes you don’t have a choice but to sell your home quickly. We tend to find this was lead to a relationship breakdown, a reduction of income, or other circumstances.

Don’t rush into a purchase, get Mortgage Advice in London 

Never rush into a property purchase; buying a home is a huge financial commitment and you should only go forward with one if you are ready to do so.

If you are eligible to take out cover, it’s always smart to do so Mortgage protection insurance isn’t mandatory, but you should think very carefully about how you will keep up mortgage repayments if you find yourself out of work for a while.

If you are unable to work due to an illness, you could look at the Critical Illness cover to help down the line. You can always get the right support from a Mortgage Advisor in London if you are unsure about whether or not to purchase a property over renting one.

Renting a House in London 

Here are now the pros and cons of renting in London. Depending on your situation, renting could be the best option for you. There are a lot of different questions to ask before rushing into renting before looking to obtain a mortgage.

Flexibility 

Compared to renting, buying a home is a long-term investment, you need to be thinking about where you can realistically see yourself in the future. Whereas, when you are renting, you can move out whenever you want. For example, you could have been renting, but saving for a mortgage deposit over time.

Once enough has been saved for your deposit or you receive a gifted deposit, you can move out whenever you want to and get your mortgage process started in London; once your notice has been given.

If you can’t imagine yourself living in London for a very long time, you should consider the idea of renting. There is no point in obtaining a mortgage if living in a certain part of London is only a temporary part of your life.

Repairs

When you are renting, your landlord is usually responsible for any repairs on the property. We tend to find, that some landlords are better than others, for example, some may take their time in getting back to you, and some may be great and get right back to you within 24 hours. Make sure to do your research and check out reviews and recommendations before you go proceed with anything.

Major repairs should be handled by the landlord and minor repairs should be taken care of by you. In London, if you choose to buy a home you will have to take care of all of the repairs and damages inside and outside of the property.

Moving Home in London with a friend(s) / family member? 

When deciding to whether buy or rent with a friend or family member, as a Mortgage Broker in London, we would recommend that you look at renting first. Renting is a fantastic and more beneficial option if this is the route that you want to go down.

Being tied into a mortgage deal with your friend(s)/family can cause problems down the line when you want to move on and out of the property. It’s not always as easy as it seems to get your name removed from a mortgage.

Removing a name can often require Specialist Mortgage Advice in London to get this sort of thing moving. So, if you are looking at renting or even purchasing with a friend(s) or family, you should seek out an expert mortgage advisor in London help to assist you along the way. 

Summary – Buying vs Renting 

Now that you know some of the pros and cons of buying and renting, you should now weigh up your options. Which is right for you? Which will benefit you most? Where do you see yourself in 5-10 years’ time?

These are questions to consider during any big decision in your life. Some people prefer to make a list of the pros and cons, that seems to always help!

When it comes down to the numbers, the majority of people choose to buy over rent, they see it as an early opportunity to get themselves onto the property ladder. People would also rather the money go towards their own mortgage rather than paying somebody else’s.

If you need more renting vs buying advice in London, book your free mortgage appointment today to speak with one of our mortgage advisors in London today. 

Date Last Edited: April 12, 2023