As house prices continue to spiral out of control, more and more people are renting. A lot of people would argue that, although it means you can move into your own place sooner, it will cost you more in the long term. Buying a house can sometimes be the cheaper option, depending on the average rent in the area, but there are a lot of hidden costs involved in buying and maintaining a house of your own. When making the decision to rent or to buy, most people haven’t properly considered the maintenance costs you will have to pay after buying the house, or the extra fees involved in the process.
Here are some of the hidden costs of buying and maintaining a house.
Surveys and Valuations
When you are buying a house, you can’t just choose based on the location and whether you like the feel of the property. You need to make sure that the house is actually safe to live in, and that you won’t get any nasty surprises once you’ve moved in. Unless you are an expert yourself, you will need to pay for a surveyor to come and check the structural integrity of the house.
It is also a good idea to have an independent valuation done, to make sure that the asking price for the property is fair. Both of these things will add extra cost to the process of buying the house.
Mortgage Arrangement and Broker Fees
It is likely that you will need to enlist the help of a legal professional to negotiate your mortgage. This usually means that your interest rates will be better, but it is still another cost that you have to pay up front. Similarly, most mortgage companies will charge you an arrangement fee that can be as high as 1 percent of the total mortgage. It doesn’t sound like much, but on the price of a house, it can amount to a considerable sum. Some companies will ask for this upfront as a lump sum, while others will add it to your repayments. Either way, it is another chunk of money that you will be paying out.
One of the benefits of renting a house is that the landlord is liable for any money that needs to be spent on the property. This can include any number of things, some of them very expensive.
For example, if your boiler breaks down and you are left without hot water or heating, you call the landlord and he will send somebody to fix it. If you have bought the house yourself, you will have to arrange the repairs and pay for them yourself.
Smaller maintenance costs are manageable, but if you have some serious damage to your house then you could find yourself struggling. If you have structural damage due to a pest problem, for example, you will need to call companies like Terminix to fix it, and you will be paying for it. If you are renting, then the landlord is obliged by law, to fix the problem immediately.
Insurance is another thing that people often overlook. Most landlords will have contents insurance that is included in the rental price. If you own the house yourself, this is another monthly cost that you have to add to the rest of your bills. You could risk not having insurance, but if you are burgled, you will have to pay to replace everything yourself.