The big debate: To rent or to buy?

When it comes to time to move out of the parental home and into their first property, most young people will be faced with the same dilemma:whether they should try to buy their first piece of UK property or simply find rental homes until the market improves at some point in the future

At the moment, house prices are constantly proving difficult to predict, and this is leaving many feeling uncertain over what they should do with regards to their accommodation.

While rental prices at the moment are hitting 2012 peaks, with LSL Property Services reporting that the £718 per month figure seen throughout July as the highest seen since the record monthly cost was broken at £720 in October, house prices are seemingly staying low.

Nationwide has recently reported that a fall in prices between June and July was the fourth time in the last five months that the value of homes in the UK has seen a downward trend. However, while this would look to be a buyers' market, there are difficulties still involved, with the high cost of deposits on mortgages meaning that it is not a straightforward choice.

With these two differing choices in mind, and neither looking particularly promising for those looking to move into a house, it can be confusing as to which one people should choose.

Mark Hayward, the chairman of the National Association of Estate Agents, said that there are benefits to be had from both, but there are also pitfalls to be seen no matter what way people choose to spend their money.

On one hand, Mr Hayward said that renting is always good because of the fact that it can be difficult to get into the property market, and this allows them to get into a home, without being tied to something long term. This will mean that they can move to buy a house as and when conditions improve.

However, he also said: "Against renting, is that we are seeing unprecedented demand in the private rented sector and therefore we are seeing rents rise. If you are paying a premium rent then it is very difficult to start saving for a deposit for a home, which is just compounded by the fact that you are having to provide a much larger deposit to get on the housing ladder."

One of the most difficult issues that surround the purchasing of a house can be the financing of a mortgage. Because a lot of lenders will be looking for upwards of 20 per cent simply for a deposit, it can be the case that people will harm their own finances simply to get into the market.

However, for those who do have the money behind them already, Mr Hayward suggested that the ideal suggestion is to get themselves buying.

"There are some very good deals to be had. What you also have to remember is that while you see house price statistics, they are generally for the whole country and at the moment we have probably got two markets in this country. We have got London and the south-east as one market, and then the rest of the country. They are different and there are some very good deals to be had."

With all things considered, Mr Hayward admitted that buying a home is far cheaper in the long run than renting. The only issues can stem from trying to find the money to finance a move into home buying, which can affect most first-time buyers.