Taylor Scott International News
People looking for their first home in the UK are better off buying than renting with the gap more than doubling over the last five years, new research shows. Indeed, first time buyers are on average £865 or 10% a year better off with their own home compared to those who rent, according to the research by Lloyds Bank. The South East of England is the only region where renting is the cheaper option with average monthly buying costs at £965, some £65 higher than average monthly rental costs of £900. The calculations show that the average monthly buying cost, including mortgage payments, associated with a first time buyer purchasing a three bedroom house stood at £672 in December 2015, some £72 or 10% lower than the typical monthly rent of £744 paid on the same property type. This represents an increase of £105 over the past year compared with the annual saving associated with buying a home instead of renting of £760 in 2014. The difference has grown as average monthly rents have increased more steeply by £24 or 3% compared to a £15 or 2% increase in monthly buying costs. The current financial gap between buying and renting of £865 is more than double the annual saving of £397 in 2010. Over this period, the average rent has grown by 23% or £139 a month from £605 whilst average buying costs have increased by 17% or £100 a month from £572. The research report says that buying has consistently been the cheaper option since 2009, when the average monthly payment was £561 for renting compared with £575 for buying. While buying is more expensive in the South East, the data shows that buying is most affordable compared to renting in cash terms in the North West, where the typical first time buyer is paying £133 a month less than the average renter at £525 against £658. The next most affordable is Scotland where a buyer pays £525 against £645, a saving of £120, and then Wales at £471 against £574, a saving of £103. The number of first-time buyers is estimated to have totalled 310,000 in 2015, largely unchanged from 311,700 in 2014. This represents an increase of 60% since the number of first time buyers fell to a recent low of 193,700 in 2011. The number of first time buyers accounted for 46% of all house purchases made with a mortgage in 2015. This share has grown from 36% at the start of the housing downturn in 2007. ‘We’ve seen a significant shift over the past five years, with people consistently paying less on average per month when owning their property as opposed to renting. In 2015 this gap widened by over £100 to an annual saving of £865,’ said Mike Songer, mortgage director at Lloyds Bank. ‘This has been helped by record low mortgage rates and rising private rents, making owning a home a much more attractive proposition than renting,’… Taylor Scott International
Taylor Scott International, Taylor Scott
