Owning Cheaper Than Renting

Owning Cheaper Than Renting.

Halifax has issued research that for the first time buyer, owning a home is now cheaper that renting a home on average in the UK.

There research suggests for a three bedroomed house:

• Average mortgage costs £677pm (as at June 2014)
• Average rent for the same was £787pm
• This is a £110pm affordability gap

The South East, Wales and the West Midlands appear to have the biggest affordability gap (i.e. rents are greater in these areas than if you bought). 

Comment

For the South East and the Midlands, it is simply a numbers game driven by demand of the amount of people wishing to rent driving rental yields up.

In Wales, we see it as the reverse, where it is a lack of demand for buyers that has kept house prices lower.

Whilst the headline may be encouraging for people to think about buying, the fact remains that whilst interest rates are low at present, they will rise.  In addition, to secure a mortgage you usually need a significant deposit.

We are minded that when you add in the costs of deposit, the initial view changes and renting may still seem attractive.