Posts with tag: cost of renting

Buying is Cheaper than Renting in Over One Third of Cities

Published On: October 9, 2015 at 10:03 am


Categories: Property News

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Buying a home using a mortgage is cheaper than monthly rent payments in over one third of British cities, according to recent research from Zoopla.

It reports that buying is most cost-effective in the north, with homeowners in Glasgow over £100 better off per month than if they rented.

Buying is Cheaper than Renting in Over One Third of Cities

Buying is Cheaper than Renting in Over One Third of Cities

However, in the south, it is cheaper to rent than buy.

Zoopla states that as a national average, renters pay £58 less a month than buyers with a mortgage.

The property portal’s study compares the cost of renting with buying a two-bedroom home.

In London, the typical rental property costs £2,218 per month, compared with an average monthly mortgage repayment of £3,302.

Meanwhile, in Hull, buyers pay an average monthly repayment of £397, while renters pay £452 a month.

The top ten areas where renting is cheaper than buying are:

  1. London
  2. Reading
  3. Cambridge
  4. Brighton
  5. Aberdeen
  6. Bristol
  7. Norwich
  8. York
  9. Bedford
  10. Southampton

The top ten locations where buying is cheaper than renting are:

  1. Glasgow
  2. Dundee
  3. Birmingham
  4. Hull
  5. Manchester
  6. Coventry
  7. Edinburgh
  8. Rotherham
  9. Bradford
  10. Sheffield

To calculate the averages, Zoopla used a 25-year mortgage with repayments and a fixed interest rate at the current average best rate of 4.5%, based on 90% loan-to-value.

Young Adult Living With Parents Feel They Don’t Have Independence

Young Adult Living With Parents Feel They Don't Have Independence

Young Adult Living With Parents Feel They Don’t Have Independence

One fifth of working 20-34-year-olds have moved back in with their parents in the last 12 months, reveals recent research by Shelter.

The housing charity’s study also found that 15% have never even moved out of their family home.

YouGov commissioned the survey, which shows that 56% of young adults living with their parents said the reason they were living there is because of the high cost of housing.

Over one third said they were trying to cut down on costs in order to save up for a deposit for their own home and over a fifth (21%) stated that renting is too expensive.

However, living in the family home is also having an emotional impact on young adults. Despite feeling lucky to have the option of living with their parents, 62% said they fear this prevents them from having independence.

Shelter warns that current Government schemes, such as Help to Buy, do not help those on ordinary incomes. It notes that young people are left with just two choices – costly and unstable private renting or living with their parents.

The survey of 4,069 adults was conducted between 21st-23rd September.

















Rent Prices Drop for First Time Since March

Published On: September 18, 2015 at 12:48 pm


Categories: Landlord News

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Rent prices in England and Wales have dropped for the first time since March, according to the latest Buy-to-Let Index by Your Move and Reeds Rains.

Rent Prices Drop for First Time Since March

Rent Prices Drop for First Time Since March

The report states that rents decreased by 0.1% between July and August, standing at an average of £803 per month.

Rents are now 5.5% higher than they were in August 2014, a slowdown on July’s figure, when annual growth was a record high of 6.8%.

Although rent inflation in London and the South East began slowing, rises in the Midlands and the East of England reached all-time highs.

However, the index also reveals that despite slower rent rises, the proportion of rent in arrears has increased to 9.9%.

Director of Your Move and Reeds Rains, Adrian Gill, says: “August has witnessed a break in a series of blistering rent rises.

“Yet this mild correction comes on the back of a whole year of acceleration. Rents are rising rapidly on an annual basis, underpinned by an improving economic picture for many potential tenants – and the peak lettings season is only just about to start this autumn.

“There is also no major change to the fundamentals of supply and demand. This means that in the longer term, faster rent rises may become a semi-permanent feature of the British property market.

“Alongside purchase prices, rents will continue to rise rapidly until something happens to address a drastic shortage of homes in the UK.”1







Why are Homes so Expensive?

Published On: September 16, 2015 at 3:56 pm


Categories: Uncategorized

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It is a harsh fact, but many young people today will never own their own home in this country, despite it being the aspiration of most.

Getting onto the property ladder, buying a small house and gradually moving to a nicer area and bigger home is the dream for the majority of people.

In the early 1980s, just half of the population owned their own home. The other half rented – 30% in social housing from their local council and 20% from private landlords.

When Margaret Thatcher introduced Right to Buy, those living in council homes could buy their properties and subsequently saw the value of their discounted purchases increase rapidly. This turned housing into an investment, rather than shelter and a stable lifestyle. However, councils stopped building houses, partly due to financial difficulties, but also because more people were interested in buying than renting.

Since then, we’ve landed in a housing crisis. Houses are now extortionate in many parts of the country and wage growth has not kept pace with inflation, or increased by as much as house prices. The young, suffering the most, have seen their earnings and borrowing allowances hit the hardest.

At the same time, most new private-sector jobs are in London, where house prices have spiralled.

Why are Homes so Expensive?

Why are Homes so Expensive?

In July, the average UK house price was £282,000, according to the Office for National Statistics (ONS). For Londoners, this is measly – the average house price in the capital is currently £525,000.

However, the average UK worker, who earns £24,648 per year, including bonuses, can only afford a house costing £110,000 with a mortgage worth 4.5 times their salary. Finding a job that pays this and a home that costs this little is tough. Add in saving for a deposit while paying market rents, and the task is virtually impossible.

Then there’s the fact that Britain is not building enough homes to meet the demand. This is partly caused by a brick shortage that began before the recession and a lack of skill in the industry. British workers often don’t aspire to be builders and we’re not bringing in skilled workers from abroad.

But throughout this crisis, there are many people that profit from rising house prices. Private companies land bank so that they can hold land and see its price increase; this also pushes up house prices.

The greatest expansion in housing is within the private rental sector, which is the least likely area to increase homeownership in Britain. Young people cannot save enough money for a deposit and the main cause of this is expensive rents.

But if you’re a landlord, keeping people renting is a good thing. Investors can make good profits while expanding their portfolios.

Again, homes are being viewed as investment opportunities, bringing in more investors. There’s a high proportion of new build properties in London that are being bought and left empty, while their values rise and the buyer sits tight. Meanwhile, families wait on housing lists or are forced out of the city.

It is not just the supply and demand problem that’s pushing prices up. When homes are expensive, people will work to keep them expensive. Buy-to-let landlords, with high capital, buy properties and rent them out at high costs and investors buy up land and new build homes in the knowledge that their profits will be higher than any other investment. This is keeping families and individuals priced out of homeownership.

And then there are the regional differences. In England and Wales, the average house costs 8.8 times the average salary. In the City of Westminster, it is 24 times the local salary, compared to 12 times ten years ago. Every part of England and Wales has seen the house price to local salary ratio rise since 2002.

But people want to buy; renting conditions can be poor, but still demand high rents.

A shortage of housing supply is causing panic, with prospective buyers and tenants queuing outside properties and having to make offers that they cannot really afford in order to secure a home.

Prices continuously rise and the landlords owning one in five properties in the UK see their profits soar at the same time. This indicates just how many homes investors own – only 2% of the population are landlords.

Now it’s a case of waiting for the crisis to come to a halt. With high house prices come a whole host of problems – lower birth rates, more people moving abroad and a dampening on the economy, as less people purchase homes.

For prices to come down, someone will have to lose out. Will it be the landlords, or generation rent?

Buyers Save £670 Per Year More Than Renters

Published On: August 24, 2015 at 3:54 pm


Categories: Finance News

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Renting a home is £670 more expensive than the cost of buying a home for a first time buyer, according to the Halifax.

Buyers Save £670 Per Year More Than Renters

Buyers Save £670 Per Year More Than Renters

The typical monthly costs of buying a three-bedroom house in the UK for a first time buyer was £666 in June, 8% lower than the average monthly rent on the same property, at £722 per month.

This contrasts to figures recorded in June 2009, during the financial crisis, when the average cost of buying was 16% more a year, or £1,154, than the average rent paid.

Despite the average price paid by a first time buyer for a three-bed home being 25% higher than six years ago, the monthly cost of owning has dropped, as the average mortgage rate has declined from 4.92% to 2.91%.

Over the same period, the average rent grew by 23%.

However, in the last year, average monthly mortgage costs rose by £40, while average monthly rents increased by just £8.

In cash terms, first time buyers in London have experienced the greatest benefits from buying rather than renting in the past year.

The average monthly cost of buying in the capital in 2015 is £1,338 compared to an average monthly rent of £1,419. This is a 6% saving worth £81 per month or £973 over the year.

Mortgage Director at the Halifax, Craig McKinlay, says: “Looking at monthly costs, the combination of lower mortgage rates and declining rental value over the past six years has made it cheaper to buy than to rent.

“While numbers of first time buyers getting onto the housing ladder in the first six months of both 2014 and 2015 has been over 135,000 – almost double the lows seen in 2009 – the issue of building more new homes in the right places needs to be addressed if we are to see sustainable growth.”1 



One in Three Letting Agents Report Rent Rises

Published On: July 24, 2015 at 2:56 pm


Categories: Landlord News

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One in Three Letting Agents Report Rent Rises

One in Three Letting Agents Report Rent Rises

Over one in three letting agents reported rent rises in June, according to the Association of Residential Letting Agents (ALRA).

36% of agents said that rents increased between May and June, the highest percentage ARLA has ever recorded.

In the East Midlands, around half (48%) of agents reported rent growth in June, compared with 17% in Wales.

Eight in ten ARLA agents believe that private rent prices will continue to rise over the next five years, potentially due to reductions in landlord tax relief.

ARLA’s report also indicates that rental supply in London is continuing to fall. In June, the average ARLA member office managed 118 properties, compared with 134 in May.

ARLA has recorded an increase in demand for short-let properties, available for up to three months. One third of agents said they had witnessed a rise in these inquiries.

David Cox, Managing Director of ARLA, comments: “It is worrying to see so many agents reporting an increase in the cost of rent over the last six months.

“Findings like this continue to prove that the housing crisis isn’t going to disappear any time soon.”1