The benefits of renting

Cost:
Simply put you can probably afford to rent a property in the location of your choice for less than you would pay should you purchase the same property.

With both house prices and interest rates dropping, cost advantage of renting has weakened, however when all costs of ownership are considered renting still tends to be cheaper.

If cost is your primary deciding factor then it's worth investigating the buy vs rent costs for the specific properties that interest you.

Protection from House Price Falls:
When house prices are rising it can make sense to buy even if it is significantly more expensive than renting. The premium you pay buys you the benefits of house price rises.

When house prices are falling renting becomes the better option. A 5% drop in the value of a 300K house represents a loss of 15K. That can represent a bigger loss than the cost of renting during the course of the year.

If the cost buying vs renting is relatively close it's worth factoring in your expectations about where house prices are heading.

Protection from Negative Equity:
Negative Equity can be a serious side effect of house price falls. In simple terms this situation where the amount still owed on the mortgage is more than the house can be sold for.

Negative Equity is a particular concern for recent buyers or for those who release equity from their mortgage.

Mobility:
If you buy a house then chances are you can't just up sticks and move to another neighbourhood the following year, however, renters have that luxury and mobility is certainly one of the biggest benefits of renting.

Flexibility

The downsides of renting

Emotional Factors:
People have tended to want a 'place of their own' and that doesn't mean simply four walls and a roof that is a space they have a say over, generally most of us want to 'own' a property we will call home. For those of you who don't then it must be very liberating but agree or not, home ownership is one of those things such as monogamy or having kids that won't leave us any time soon.

Appreciation:
Property is in the doldrums at the moment, that is the situation for the short term, however, in the long term property will often appreciate in value, and although it may only do so in line with inflation it is still an asset that tends to increase over time.

The need for discipline:

Lack of Security: