Everyone dreams about their perfect home. Whether it's a luxurious five-star flat or a rustic cottage in the Cotswolds, everyone wants a place to call their own. But for potential first-time buyers like me, buying that first home is becoming an increasingly unattractive prospect. There are mortgage rates to consider and deposits to get hold of... and even if you manage to get to grips with all that, you could end up in negative equity due to an unforeseen economic downturn. If that sounds a bit off-putting, don't worry - you're not alone. Here are just some of the reasons why I won't be taking that first step onto the property ladder:
It's hard to get a mortgage
With house prices at an all-time low and interest rates beginning to fall, you might think now would be an excellent time to buy that dream home. Unfortunately, the banks don't seem to agree. The trouble is, banks are still being extremely careful who they lend to and have tightened the criteria on most of their mortgages - often turning down applicants for the tiniest infringements on their credit records. In fact, one poor couple spent over four hours being interrogated by HSBC over their loan application… just to be turned down.
Most lenders expect a huge deposit
Despite these increasingly-lower house prices, the size of the average mortgage deposit remains fairly high. In July 2012, the average first-time buyer deposit dropped to just less than 20% - the lowest it's been for over 3 years. But when you put that into real figures, it doesn't sound quite so reasonable. With an average new home price of around £200,000 that measly 20% translates to around £40,000. I don't know about you but I don't have forty grand just lying around the house and saving up that kind of money is going to take a while.
You'll have to pay for maintenance and repairs
Without a landlord to turn to when things go awry, you could find yourself saddled with a lot of extra costs down the road. Dodgy wiring? You'll need an electrician. Burst pipes? You'll have to pay for a plumber. And it might not end there. A friend of mine recently bought a lovely rural property with a number of beautiful but enormous trees on the surrounding land. After moving in, his new neighbours informed him that it was his duty to keep the trees pruned - or face legal action should fallen branches cause any injuries or property damage.
You could end up losing money
One of the main reasons people give for buying a house rather than renting is that it's a great investment. But what if your investment goes bad? Over the past few years, the UK has seen house prices plummet. While this is great news for buyers, homeowners have seen their investments fall through the floor. In fact, someone I met recently had purchased their home several years ago for £160k… a home which is now valued at around £70k. He's now in the position where he's trapped by his investment - unable to move home due to the inability to sell at a reasonable price.
Personally, I find these issues a bit too much too much to handle. With a rental property, I don't have to worry about securing a mortgage or raising a massive deposit and there aren't any extra costs unless I want to buy some new furniture. I have the flexibility to move house at the drop of a hat and the only thing I'm tied to is my rental agreement. So for me at least, the rental market is a much more comfortable prospect.
Have you thought about buying your first home? Or would you rather rent instead?