Those in retirement have options when it comes to living in London. Recent news states that renting can cost 10 per cent less than buying a home in London. The renter can actually be 16 per cent off or up to £4,200 better than any buyer. Housing prices are also increasing for buyers which mean property value is up, but for buyers it means spending more right now. If you already have a home, then the consideration takes on a whole new thought process instead. Use the Saga equity release calculator and compare equity releases to rental savings.
The Ups and Downs of Renting
Yes, in 31 of 32 London boroughs renting is cheaper than buying a home. However, if you already have a home then you are more concerned with the fact that in the last year housing prices have increased and will continue to increase for the next several years. The argument that renting might be better than owning is valid in certain circumstances.
First with a rental you do not own the property. You do not have to take care of the outside, the lawn, or maintenance. It is stress free. If you are cash poor, but currently property rich then selling your London home could net you a nice stipend to live on. You can pay rent, enjoy your live as usual as long as the cash in your bank account from the house sale lasts. Getting into a new mortgage is certainly not a pleasant consideration to make. If you consider mainstream mortgages then you have monthly payments, which are higher than renting, you still have to take care of the home, and you could be out of cash just as easy or more so with owning.
So there are definite advantages to renting. There are also disadvantages. Renting means there is no guarantee that you can remain in that property for your entire life. You may not be able to take out long term tenure on the rental location. Since you need to pay rent you might find that your money runs out. The costs of starting the rental added to the living expenses in London could mean the money you have runs out before your life. You are also not in charge of the property so making changes for your needs as you grow older is not possible.
There is also a very dangerous situation that can occur. Older individuals can have any number of accidents and while rental insurance should be a part of the scenario it can also be most difficult to be liable for a rental. With owning your home, and having property insurance if an incident occurs at least, it is on your own property.
The Benefit of Home Equity Release to Renting
For those who need to gain cash, but are property rich and gaining every year as London prices get better there is an alternative to renting. One main advantage is remaining the owner of your property for life. You decide when you move out and sell or if you die in your home. If something needs to be fixed, if you need to modify it for health reasons, or make any improvements you have the ability to make those decisions.
So no one can kick you out. You have control. You also get to remain in London the capital of the UK, but you can do so with a little cash on hand through London equity release. The Compare Equity Release calculator is a great tool for helping you determine how much cash help you can get. It can also help you calculate the best product for your situation as this unique equity release calculator will provide three answers from just two calculators. Most equity release calculators only offer a roll-up lifetime mortgage, however the www.EquityRelease2Go.com calculator goes one step further by providing results for interest only lifetime mortgages and enhanced equity release schemes.
Drawdown lifetime mortgages are one suggestion that can help over renting. If you decide you want to have access to cash, you can establish an home equity account. You get a small lump sum of cash up front, and then as you need money you can take out more home equity up to a certain maximum. As long as you do not use the entire equity release in the reserve, there will be inheritance left in the property. Interest only accrue on the funds actually used from the account, rather than the entire equity amount which was available to you.
You can help your children, make home improvements, enjoy entertainment and dining out yet retain control of your property. Consider using the Saga or Compare Equity Release Calculators to decide if renting is still the least expensive option over the long term since the long term in both scenarios is what matters most.