Should You Rent Or Buy?

What's Happening In Your Area?
Do The Finances Stack Up?
What Is Likely To Happen In The Future?

The property crash has wiped, on average, around 20% off the value of the UK's property stock, although property hasn't yet fallen by up to 50%, as some pundits predicted. Unfortunately no one seems quite sure what will happen this year, so if you have to make a decision on whether to buy or rent, read the following guide from our resident property expert.

By Kate Faulkner

This is a generic guide - but the situation of each of us will differ, depending on our own personal circumstances. So, we've given you three key steps to follow, which should help make your decision easier.

Step One: What's Happening In Your Area?

To start with, it's a good idea to get to know what's happening to your local property market.

From a national perspective, in 2008 rents grew by up to 10%, before frustrated sellers decided to rent their homes rather than sell them. This increased the number of rental properties suddenly available and resulted in rental prices falling back by 10% or more in 2009. Tenants experienced for almost the first time, a choice of properties and were able to negotiate hard with landlords and letting agents to keep the cost of renting down.

However, the excess stock from frustrated sellers started to disappear over the summer and through the rest of 2009, and as a result predictions for 2010 are that rents could go up between 5 to 10%.

House prices have fallen in many areas by around 20% and in some areas are set to continue to fall this year as demand is still lower than supply for some properties. In other areas, property prices have slowed and are showing some signs of small rises, but they don't appear to be increasing that much so far this year.

To summarise, on a national level property prices are likely to stay relatively stable, with some areas falling slightly and other areas rising slightly. While for renters taking out new agreements, it is a slightly different story in that rental prices are likely to start increasing, if they haven't done so already.

How Does This Help You?

If you are in an area where rents are increasing and properties to buy are hard to find and prices seem to be increasing too, then 2010 might be the time to consider buying. However, there is no panic to buy as most properties aren't expected to rise in price rapidly, and there are other things you need to consider before you make your final decision.