New Home Owners And Snagging Forum
Home Owners => House Prices and the housing market => Topic started by: The Prophet on September 12, 2011, 01:14:20 pm
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It is now cheaper to buy a home than rent one in all parts of the UK.
Based on the UK average for a two bedroom flat, it costs around £567 in monthly mortgage payments to buy as opposed to £677 in monthly rent -16% more.
The biggest differences are in Northern Ireland (29% more) and the North (16% more).
In London and the South East the respective difference is just 4% and 1% more to rent a home.
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It has always been cheapest to buy than rent in the long term.
House values go up, but with renting you never own any of the property.
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The latest figures from property website Zoopla indicate that falling house prices and a rise in rental demand have resulted in the average renter in Britain currently paying 13 per cent more than the average home owner.
Milton Keynes is top of the list, with average rents at £760 for a two-bed flat - 39 per cent higher than the cost of owning - meaning that renters are paying an extra £2,550 each year to rent.
In London, average rents are £2,290 while the average price for a two-bedroom flat is £430,500. So renters are paying an extra 28 per cent or £5,960 each year.
Nicholas Leeming from Zoopla says
"With house prices down, low interest rates and sky-high demand in the private rental sector, buying has never been a better option for those able to secure a mortgage.
And with owners reducing prices further in order to achieve a sale before Christmas, there may well not have been a better time to buy in recent times."
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I believe Milton Keynes is topping the tables at the moment when it comes to yields. Those renting are paying an average of £150 more than those paying a mortgage. Meanwhile in the South of England it makes more sense to rent as yields (especially in places like Bournemouth) are terrible.
Not sure this will last forever though, because as soon as the Bank of England base rate increases (which it will), it will be interesting to see what happens to mortgage products.
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Buy-to-Let investors are walking a knife-edge. Interest rates can only go one way and that is up.
Inflation will need to be tackled sooner rather than later. Rental yields wont be so good then.
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It's wiser to buy a home than renting . With the high price of renting at the moment, owning a home can be beneficial.
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If you buy a home you have more security and are less likely (and able) to move every 6 months or so.
In the long term it is a better investment too.