As crazy as it sounds, it can actually be cheaper to own your own home than rent. New research just released by the Halifax has shown that for first time buyers owning a property is £670 cheaper per year than renting. So not only are you lining your landlord’s pockets you’re emptying your own.
The research has found that a first time buyer purchasing a three bedroom house in the UK is paying out on average £666 per month. In contrast, the rent on a similar property would be 8% more at £722 per month. For many of us stuck renting, for now at least, this could be quite depressing. The bright side is that if you’re currently saving hard for a deposit, there is light at the end of the tunnel. Once you get into your new home, you might actually be better off. That £700 could buy a nice little holiday or perhaps a new sofa.
If, like me, you have a few years before you’ll have a house deposit in place, you might share my concerns that with rising house prices you’re never going to have enough to buy the property that you want. The number of first time buyer house sales has decreased over the last few months, although there are still more people climbing onto the first rung of the property ladder than this time last year. Figures from the Housing Market Report state that in July 2015 first time buyers accounted for 23% of all sales, compared with 24% in June and 29% in May. However, in July 2014, only 20% of sales were made to first time buyers.
Mark Hayward, National Association of Estate Agents managing director, is alarmed that the number of sales made to first time buyers is falling. “With reports of house prices increasing and expectations of rising in the future, first time buyers will continue to be pushed out of the market,” he added.
Not the most encouraging of remarks, however I don’t think I’ll ever be put off from buying a house. I know that being secure in your own home relies on you being able to keep up the mortgage payments but I don’t feel happy with the idea of bringing up children in a rented property that the landlord can literally just turf you out of whenever they feel like it.
In a world of increasing property prices and increasing numbers of people having to remain in rented accommodation, I really wish someone would look at assured shorthold tenancies and do something to make the tenant feel more secure. During the run up to the general election, the Labour party talked about introducing secure 3 year tenancies as standard. This pledge alone almost made me vote for them.
Plus, I like the idea of owning my own home and not having to pay rent when I get old. I can’t imagine there’s going to be a state pension by the time we get to retirement age and having to continue to pay rent each month could be really stressful and potentially impossible for many.
For those of you already paying a mortgage, how do you find it compares to your previous monthly rent? Or perhaps you’re looking at mortgages at the moment. How do your monthly repayments stack up? Let us know in the comments below.