BM Global News
  • Home
  • News
  • Politics
  • Business
  • Canada
  • Entertainment
  • Europe
  • Fashion and Lifestyle
  • Health
  • Sports
  • Technology
  • Travel
No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Canada
  • Entertainment
  • Europe
  • Fashion and Lifestyle
  • Health
  • Sports
  • Technology
  • Travel
No Result
View All Result
BM Global News
No Result
View All Result
Home Business

Renting a home is cheaper than buying for first time in six years, report says

BM Global News Admin by BM Global News Admin
June 13, 2021
in Business
0
493
SHARES
1.4k
VIEWS
Share on FacebookShare on TwitterShare on EMail


Renting a home is now cheaper than buying one typically, reversing a trend seen for the past six years, a report has found.

Last month the average private sector tenant in Britain spent £71 per month less in rent than if they were servicing the repayments on a 10% deposit mortgage, according to estate and lettings agents Hamptons.

This means they would have spent a monthly average of £1,054 on rent compared to £1,125 on mortgage repayments – the first time since December 2014 that renting has been cheaper than buying.

Back in March 2020, someone with a 10% deposit would have been £102 per month better off buying on average, it said.

London has seen the largest shift since the start of the coronavirus pandemic. Falling rents there mean a buyer putting down a 10% deposit on a property in the capital will have gone from being £123 per month better off buying in March 2020, to spending £251 per month less on rent in May 2021, the report said.

Recommended



The pandemic has reversed a six-year trend which now makes it cheaper to rent than buy a home

Aneisha Beveridge, Hamptons

There are only four nations or regions where it is still cheaper to buy than rent – the North East North West Yorkshire and Humber and Scotland researchers found.

Strong house price growth has added to the cost of buying and owning a home.

In early 2020 it was cheaper to buy than rent in every region or nation in Britain, Hamptons said.

However, rental prices are now seeing strong growth, after “bottoming out” last May.

Last month the average cost of a newly let rental home was 7.1% higher than a year earlier. This marked the fastest rate of growth since Hamptons’ records started in 2013, surpassing the previous peak of 7.0% in December 2014.

In May, the average rent on a four-bedroom property in Great Britain increased to £1,805 per month, up 9.5% on the same month last year. Meanwhile rents on one-bedroom homes remained flat at 0.4%.

Aneisha Beveridge, head of research at Hamptons said: “The pandemic has reversed a six-year trend which now makes it cheaper to rent than buy a home.

“A year ago, lenders were either increasing their rates or withdrawing higher loan-to-value mortgages altogether. For first-time buyers in particular this pushed up the cost of paying a mortgage, if they could get one at all, to well above the cost of renting.

“It is likely the balance will swing back somewhat towards buying, particularly as mortgage rates come down. However this is likely to be partly offset by rising house prices.

“And while interest rates are falling, they’re still considerably above where they were pre-pandemic on higher LTV (loan-to-value) loans. Despite this, we expect the gap between renting and buying to close over the remainder of this year, moving back towards longer-term levels in 2022.”

The typical costs of buying versus renting were based on someone having a two-year fixed-rate mortgage and calculated using average mortgage rates.

Here are the monthly costs of renting relative to buying with a 10% deposit, according to Hamptons. A negative figure means it is cheaper to buy than rent, while a positive number means it is cheaper to rent than buy:

– Greater London, £251

– South East, £54

– South West, £108

– East, £117

– East Midlands, £98

– West Midlands, £35

– Yorkshire and the Humber, minus £5

– North West, minus £4

– North East, minus £72

– Wales, £11

– Scotland, minus £130



Source link

Tags: businessbusiness and financialbusiness newsbusiness updatesbuyingcheaperfinancial newshomerentingreporttimeyears
BM Global News Admin

BM Global News Admin

Related Posts

Business

Top Five Things You Need to Consider in Beach Rentals

August 16, 2022
Business

Five Components of a Successful Strategic Communications Plan

August 12, 2022
Business

Do’s and Don’ts of Using an Industrial Blending Machine

August 10, 2022
  • Advertise
  • Contact us
  • Press Release
  • Privacy Policy

Copyright 2022 © BM Global News. Enjoy our Latest World News.

No Result
View All Result
  • Home
  • News
  • Politics
  • Business
  • Canada
  • Entertainment
  • Europe
  • Fashion and Lifestyle
  • Health
  • Sports
  • Technology
  • Travel

Copyright 2022 © BM Global News. Enjoy our Latest World News.