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Mortgage now Cheaper than Rent in 80% of the UK
HAMISH_MCTAVISH
Posts: 28,592 Forumite
http://www.telegraph.co.uk/finance/personalfinance/8140384/Renting-a-home-is-more-expensive-than-buying-one.htmlRenting a home is more expensive than buying one
Renting a home is more expensive than buying one in 80 per cent of British towns, new figures have revealed.
Rents are typically 10 per cent more expensive – although in some towns, they exceed mortgage payments by almost 40 per cent, according to the research by property website Zoopla.
It blamed a lack of affordable mortgages, which has forced potential buyers to remain in the rental market, helping to push up demand for rental properties.
At the same time, house price falls and low interest rates have reduced the monthly cost of owning a home.
Nicholas Leeming, a director at Zoopla.co.uk, said: “Buying has always been somewhat cheaper than renting, but we’re now seeing a real insider-outsider divide in the housing market.
“For those who are able to buy a home, costs are low, but for those who can’t, costs are much higher – and the doorway to entry into the housing market is narrower than ever.
The freezing up of credit has put home-ownership beyond the reach of many renters, and it’s driving a larger and larger wedge between them and owner-occupiers.”
The research found tenants pay 9.9 per cent more on average than an owner with a mortgage with a pay rate of 5 per cent.
Some areas are worse than others for tenants – in York, rents exceed mortgage payments by 39 per cent, leaving tenants who pay average monthly rents of £978 as much as £3,270 a year worse off.
A further 13 of the largest 50 towns and cities in Britain saw rents exceed mortgage payments by more than 20 per cent.
Generation Rent indeed.
What a horrible position...... to be forced into paying more in rent than a mortgage, wasting all that money, month after month after month just to enrich your landlord, because the banks are still underfunded and rationing the limited funds they have.
There's no way the government will survive the next election if they don't get lending moving again.
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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What a waste of a thread. Yes some mortgage payments will be lower than some rents...
BUT
There is no way that the average monthly mortgage payment on the price of an average house (140k?) is going to be less than the average rent payment.
More trolling and propaganda from the scourge of this forum.0 -
HAMISH_MCTAVISH wrote: »What a horrible position...... to be forced into paying more in rent than a mortgage, wasting all that money, month after month after month just to enrich your landlord, because the banks are still underfunded and rationing the limited funds they have...
...and because houses are really expensive in a lot of places.0 -
What a waste of a thread. Yes some mortgage payments will be lower than some rents...
BUT
There is no way that the average monthly mortgage payment on the price of an average house (140k?) is going to be less than the average rent payment.
More trolling and propaganda from the scourge of this forum.
By all means question the validity of the article, or the statistical methods used. But you can't just say "it isn't true" without stating why.0 -
HAMISH_MCTAVISH wrote: »http://www.telegraph.co.uk/finance/personalfinance/8140384/Renting-a-home-is-more-expensive-than-buying-one.html
Generation Rent indeed.
What a horrible position...... to be forced into paying more in rent than a mortgage, wasting all that money, month after month after month just to enrich your landlord, because the banks are still underfunded and rationing the limited funds they have.
There's no way the government will survive the next election if they don't get lending moving again.
It's not quite that though is it.
The research looks at rental payments, vs mortgage payments.
The research also states specifically that low interest rates have reduced mortgage payments.
This will, no doubt, include mortgage payments that are interest only, some even interest only tracker mortgages.
It will no doubt compare mortgage payments someone is making on a house they bought 20 years ago, compared to a rental today.
So basically, if interest rates go up mortgages will grow to be more expensive than renting, dependant on the mortgage rate.
It's just a point in time, and a very short point in time at that, compared to the length of a mortgage...unless this situation lasts for decades.
However, an inclusion of fee's to buy a house, and an inclusion of possible negative equity based on the past 3 years would totally change the findings.0 -
Graham_Devon wrote: »It's not quite that though is it.
.
It seems to be exactly that.
They're talking about a repayment mortgage at 5% from what I can make out, which is far from the best deals available, and excludes interest only.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Mortgage are for 25+ years. Interest rates won't stay this low for the next 25 years. When they inevitably go up then renting will be cheaper than a mortgage. So your attitude seems rather short-sighted to say the least.
Do you really think rents won't go up over the next 25 years?0 -
There is no way that the average monthly mortgage payment on the price of an average house (140k?) is going to be less than the average rent payment.
.
Thats exactly the case.
The average monthly mortgage payment is now less than the average monthly rent, for a similar property in the same area.
By 10% on average, across 80% of the UK.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Do you really think rents won't go up over the next 25 years?
Rents are up 4% this year so far, and now at an all time high.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »It seems to be exactly that.
They're talking about a repayment mortgage at 5% from what I can make out, which is far from the best deals available, and excludes interest only.
It's not quite that.
But I can't be bothered arguing with you to be honest. I know the angle you are coming from....the "we need more debt available" angle.
You've changed your tune completely recently. Tune used to be "only 30% of people need to be able to afford for HPI to happen". Now, it's all about the poor FTB who needs more debt available to them.0 -
BUT
There is no way that the average monthly mortgage payment on the price of an average house (140k?) is going to be less than the average rent payment.
A 3-bed semi on Hays Road in Prestwich, Manchester for rent at £750 a month.
A 3-bed semi on Hays Road in Prestwich, Manchester for sale at £159,950.
Let's say you got a mortgage for around £140,000 on the house at 6%, your monthly repayment would be about £700 a month interest only. That seems pretty much the same as the rent to me.
This is a road quite near me and the first one I looked at for a comparison.0
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