Buying Cheaper Than Renting in 75% of UK

Procrastinator333

dktreesea wrote: »

This would surely vary from place to place. An identical flat to the one we currently rent just sold next door to us for £260K. We rent our flat for £675 per month. Even at a 4% fixed rate (are there any such rates around at the moment for 10 to 15 years?) that only values the flat at just over £200K. Plus I don't have to invest any of my hard earned dosh in the principal. Or fix up the flat if something goes wrong. In fact, in our flat something did go wrong - they had to replace part of the roof. That knocked each flat owner back £9,200. The one on the ground floor couldn't afford to pay - he was a pensioner - and has ended up having to put his flat on the market.

So it is quite easy for you to see that if you bought that place on a fix at around 6% (assuming a FTB) that would cost £15.6k in interest. Compared to your £8.1k in rent.

So for that particular comnparison, prices need to rise by 2.9% per annum just for buying the place to be a break even decision.

That is not to say don't buy, just to be aware of in making your decision.

And again highlights that people need ot look at this for themselves. It will vary from town to town and property type to property type.

PasturesNew

Round My Way ....

LHA for a 2-bed flat (which is the average zoopla used I guess) is £589/month
Average 2-bed flat, no idea... where'd that come from (didn't read the thread). But looking at RM, the cheapest 2-bed flat is £130k and the mid point one is £250k.
4.75% on £130k is £514/month interest, £226/month principal
4.75% on £250k is £989/month interest, £435/month principal.

So, on the surface, it seems cheaper to rent a 2-bed flat here than to buy one, except there are few of them. If you have a flat for rent, all you do is make it a bit nice and rent it out to holidaymakers instead. You could get £500+/week for it this week. So they prefer to have holidaymakers stay in it a portion of the time, at a much higher rate, and without being stuck with tenants they can't move out.