Should I buy or rent? A guide for graduates

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Buy or rent – a guide for graduates

So far in the way of living arrangements, you have experienced the works. From the family home you grew up in, to living with a bunch of strangers in halls or in a house off-campus. Now you are about to come face-to-face with a whole new chapter of living as a fully-fledged graduate.

You may have already started to consider your options and how to go about making your first steps, but it always pays off to receive some extra guidance when it comes to making the next big decision in your life. Everybody’s situations are different so in this guide, we hope to provide a thorough breakdown for those considering buying, renting and for those who just don’t know what to do.

Sensible saving

As you approach the end of your academic studies, it is important to consider your spending and budgeting.  Some students are blessed with a weighty student loan. If you are one of the lucky ones, allocate a small part of your time to budgeting your remaining loan so you can set some aside for when you finish.

However, if your student loan isn’t substantial, you can still be thrifty with your spending. It wouldn’t be unfair to sit out on a few student nights out or to budget your food shop and shop at cheaper supermarkets to save some extra pennies.

The whole point of saving now is to make your money go as far as possible and to only spend what you really need to live off.

The house hunt

Buying a house is a massive commitment but it’s also an amazing opportunity to get started on the property ladder sooner rather than later.

For example, if you were looking to buy a property in Wolverhampton, during the last year the majority of sales were semi-detached properties selling for an average price of £147,517. Detached properties sold for an average of £269,304, with terraced properties fetching £129,235 – the choice is yours.

If you’re looking to rent instead, the same rules apply in terms of suitability to your needs and requirements, but remember that you’ll be on a short-term contact so you’ll have the flexibility to change property much easier than if you were buying.

Don’t forget, whether you’re buying or renting you will need to make sure that the property is within your budget, so you can afford to pay additional bills which you may incur such as gas and electricity, water and TV licence.

Bountiful borrowing

You’re probably aware of how difficult it is to save money for property which continues to rise at an ever growing rate. But, where there is a will, there is a way. The government offer a variety of schemes to help you on the pathway to affording your very own home. It will pay off to work out the best loans, ISAs and deals available to you.

One of the most popular and successful options is the government’s Help to Buy ISA. What this entails is that if you put money into this ISA once a month at a maximum of £200, the Government will boost your savings by 25%. So, for every £200 you save, you will also receive a government bonus of £50. The maximum government bonus you can receive is £3,000 if you have savings of £12,000 or more.

Additionally, you could look into the Help to Buy loan, which provides a loan of up to 20% of the purchase price of a new-build home. This loan is also interest-free for five years.

Do make sure to research all of the peripheral costs of buying a property, such as stamp duty and valuation fees, as well as understanding how the process of buying a property works.

What do I do if I’m still unsure?

Either speak to your local buying and lettings agent, or speak to a financial advisor who will be able to direct you into making a well informed decision regarding your options and next steps.

So, to conclude, whether you end up buying or renting, make sure that your moving checklist is planned down to a ‘T’, so that your move from Uni to adulthood goes as smoothly possible.