‘Compare and contrast the advantages of buying and renting a home.’ Model A

A requirement shared by most peoples, and across most cultures, is the need for a place to live, not merely a ‘house’ (which refers to the physical construction) but also a place where a family feels a sense of ‘belonging’, i.e. a ‘home’. Although a fortunate minority are given a home by their parents, for most a decision has to be made; whether to spend money to buy, or whether to rent. This essay will first look at the principal advantages of buying, and then at the main advantages of renting.

Martinez and Al-Fadel (1998:43) suggest that there are perhaps three principal reasons why people choose to buy. Firstly, many feel that there is greater personal freedom associated with buying a home. For example, the owner is free to redecorate as he or she wishes, without any fear of angering a landlord (and hence possibly losing the deposit paid on entering the property). Likewise, there will be no restrictions (within reason) on the behaviour of children or on the keeping of pets.

A second advantage of buying is certainly the possibility of financial benefit. In many countries, governments try to give incentives for home-ownership through tax cuts (Mortgage Interest Relief at Source is an example of this, from the UK), and home ownership may bring with it enhanced credit ratings. However, the main financial benefit undoubtedly accrues at the time when a mortgage is paid off; the home in this case can be seen as an investment, one which will be of particular value on retirement.

A final advantage of buying rather than renting is perhaps the most nebulous, but arguably for many of the greatest importance; the psychological factor. Ownership of a house can give a sense of security, a feeling that, in volatile times, there is something ‘concrete’ (in both senses of the word) upon which to fall back in time of need. And, as a lesser manifestation of a psychological state, many would accept that feeling part of a geographical area is enhanced by the process of buying into it; as MacFee (1999:86) puts it, "the investment of one’s time and energies into creating social links runs parallel to ‘investment’ in the more normally accepted financial sense."

Having looked at the advantages of buying a house, let us now examine the many and valid reasons why people choose to rent rather than buy. Firstly, there are without doubt personal freedoms which are enhanced by renting. Maintenance is predominantly the concern of the landlord rather than the tenant, and a considerable amount of stress can therefore be avoided by making the decision to rent (Brockway, 1989). Furthermore, as Bernstein et al point out (1987:78), a tenant benefits from greater mobility than someone who has chosen to buy (who will in turn probably need to find a buyer should he/she want to move to a new area).

There are also clear financial benefits. Firstly, it is the landlord’s responsibility to pay for all major repairs to the house (a point linked to the freedom from maintenance worries mentioned above).

Secondly, although many buy as an investment, there is also the very real risk that a property will decrease in value over a period of years; Dunbar (1999:83) notes that many in the UK, during the economic recession of the early 1990’s, found that their houses were worth much less than they had paid for them, and that a considerable number of houses were re-possessed by the banks who had provided the mortgage. The decision to rent is one clear way of avoiding this very real danger. However, a final point, and probably the most fundamental, is made by Brockway (1989:113); renting requires very little capital investment. For those with limited access to money, or those who choose to spend their earnings in other areas (such as travel or entertainment), renting will be preferable to buying.

A final advantage of renting is linked to the amount of time an individual is willing to devote to his/her chosen dwelling. We have already mentioned the worries and cost that house-maintenance can incur. Looking after a house can also take up a considerable amount of time, particularly for older properties,

and many often prefer to spend this time in other, more pleasurable or profitable, ways.

This essay has attempted an overview of the relative advantages of buying and renting a property, looking at factors associated with personal freedoms, financial benefits, and psychological well-being. In conclusion, it seems that it is not really possible to generalise by saying that the poor choose to rent, while the well-off buy; in the UK, people tend to buy when they can, whereas in other countries, such as Germany, renting is a popular choice across all social classes. Nor is it possible to say which method is ‘better’. Depending on the circumstances, as outlined in this essay, both renting and buying will continue to provide an effective means of ensuring that a ‘house’ is also a ‘home’.



Bernstein, O., Wilkins, W. and Morgan, P. (1987) ‘Problems for the future?: an analysis of the London housing boom’, Journal of Property 30/7: 71-83

Brockway, F. (1989) The housing market, London, Longton

Dunbar, E. (1999) A seller’s market?, Helensburgh, Freewave Press

MacFee, J. (1999) House trends, London, Kagan

Martinez, E. and Al-Fadel, M. (1998) ‘Investment options in US housing’, Business Quarterly 23/1:39-48

(this essay has been prepared as a model for study purposes only – the references have been made up to show bibliographic and referencing conventions)

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W.A. Guariento: March 2000


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