Buying cheaper than renting?
In an unusual turn around of events, mortgage lender Halifax claims that buying a house is now much cheaper than renting. It calculates that the monthly cost of buying the average three-bedroom home in the UK is now £600; that’s 16% cheaper than the £716 it would cost to rent the same type of property.
The anomaly has arisen as a result of would-be first-time buyers’ continued struggle to get a foot on the property ladder, so placing unprecedented demand on the lettings market which has seen rents soar. The picture is in stark contrast to the situation in 2008, when home owners were, on average, forking out 29% more per month than those renting.
Nevertheless, whilst the ongoing economic crisis means the situation is unlikely to significantly change over the next few months, 2012 has seen a welcome re-introduction by some lenders of the 95% mortgage. This, coupled with falling interest rates and house prices, means that more first-time buyers may be able to take the plunge this year.