The market

Renting versus owning

The comparison is usually presented as a sum. It is better understood as a question about who carries which risks, and how quickly a household needs to be able to move.

The monthly figures are not comparable as they stand

A rent is close to the full monthly cost of occupying a home. A mortgage instalment is not: it sits alongside maintenance, insurance, and in some forms of ownership a recurring charge for shared parts of a building. Comparing rent with an instalment alone compares two different things.

Part of a repayment instalment is also not a cost at all in the ordinary sense — it reduces a debt. The interest portion is the closer analogue to rent.

Transaction costs and time

Buying and selling both carry substantial one-off costs. Spread over two years those costs are heavy; spread over fifteen they are minor. This, more than any view about prices, is why the length of time a household expects to stay is the most important single input to the decision.

Who carries the maintenance risk

An owner carries the cost of a failed heating system or a roof that needs work, whenever it happens. A tenant generally does not, though they carry a different exposure: the possibility that the arrangement ends before they want it to.

Maintenance is not merely an expense; it is an unpredictable one. Owning converts a predictable monthly payment into a smaller predictable payment plus an unpredictable occasional one.

Security and mobility

Owning gives control over how long the household stays and what it does to the building. Renting gives the ability to leave at relatively short notice and without a sale. Which of these is worth more depends entirely on the household's circumstances — work that may move, family that may grow, an area not yet known well.

Households that expect change often overvalue ownership; households that have settled often undervalue the cost of the transaction they are about to repeat.

What the comparison cannot settle

The comparison cannot be settled by arithmetic alone, because its largest terms are unknowable in advance: future borrowing costs, future rents, and how long the household will actually stay. Any calculation that appears to settle it has quietly assumed answers to all three.