Question: A long-running argument with my partner about whether we should continue renting or not is holding up our plans to buy – and even, in my opinion, damaging our finances. Our £950 rent for a three-bed flat is now very pricey, it easily equates to what we'd pay on a mortgage for a similar property. We've rented for five years, yet my husband is convinced property prices will fall and so insists we should stay put and try to save. Who's right?" Kerry Grant, East Midlands
Answer: The jokes about rent being a four-letter word lost their humour when the recession bit. For the first time in a decade, tenants could pose as the canny players as many homeowners plunged into negative equity.
But the punchline still remains the same – long-term renting shuts you out from owning a potentially valuable asset that you can sell or pass on to family. Your decision turns entirely on your personal circumstances but plenty of indicators suggest a home purchase might be in your favour.
First, a lack of rental property supply is pushing rents higher, according to a recent lettings survey from the Royal Institution of Chartered Surveyors. Separately, the Association of Residential Lettings Agents also worries that "there isn't enough rental property to meet demand in Britain – and the situation is worsening" a spokesman says.
For a three-bedroom flat scenario, figures from rent advice site Residential Rent Price Index (Rrpi.co.uk) suggest the average rent currently hovers at £1,071, so you could still have some way to go – although, of course, prices will differ across the country.
Second, the gamble on falling house prices to pick up a cheaper property in the future could backfire. "House prices have begun to creep back up after the recession nadir," says Andrew Montlake of broker Coreco.
Despite plenty of factors indicating further market flatness or trouble – rising prices but no corresponding hike in buyers' incomes; sticky unemployment; inflation; repossessions – many economists suggest average prices will most likely tick up slowly over the coming 12 months and beyond.
This, adds David Hollingworth at broker London & Country, raises a third problem. "If house prices rise faster than you can save money for your deposit while renting, you could end up paying through the nose for a more expensive mortgage," he warns.
Your decision will boil down to joint agreement on which risk is bigger: being caught out by future rising prices as tenants or buying now only to see prices stutter and fall. It's a tricky gamble but one that reflects a dour buyer sentiment – "as safe as houses" is no longer an investment adage for the property market.