First-time buyers 'better off purchasing than renting' - New research has found that people looking to take their first step onto the property ladder may be better off buying than renting.
First-time buyers 'better off purchasing than renting'
By Sam Gooch
Jun 21, 2010 - 8:50:08 AM
New research has found that people looking to take their first step onto
the property ladder may be better off buying than
renting.
New research released today (June 15th) by
Santander has concluded that the vast majority of first-time buyers for
a home credit deal would be better off
purchasing a property as opposed to renting one.
Following the government's pledge to help
first-time buyers get their foot on the property ladder by increasing
the number of new homes available, the mortgage lender conducted a study into the
property market in the UK.
It found that, in the
aftermath of the worst of the global economic downturn, average monthly
rental prices now exceed those for the average repayment on mortgages in
every area of the country apart from London.
Therefore, logic suggests that all people seeking a
home outside of the capital city may be able to save themselves an
average figure of £1,040 per year if they bought their own
property instead of paying monthly rent.
Earlier
this year, the Council of Mortgage Lenders found that average monthly
rent in the UK - excluding London - now stands at just over
£420, whereas mortgage repayments per month for first-time
buyers equate to an average of £334. This is the equivalent to a
saving of £86 per month.
London's
property sector remains in its own disconnected bubble away from the
rest of the nation, with rental prices within the capital around 56 per
cent higher than elsewhere, Santander stated.
The
average monthly rent in the city is £701, but because real
estate remains expensive to purchase there, fist-time buyers would end
up paying around £359 per month on their mortgage.
Phil Cliff, director of mortgages at Santander,
said that people in the market for property had been
"justifiably cautious" over recent months, but advised
that these figures show that the way forward may now be to purchase as
opposed to renting.
"The first few months of 2010
have seen rents start to climb which has meant that the savings to be
made for potential first-time buyers have grown considerably,"
he added.
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