It’s now cheaper to buy a property than rent one in 90% of the UK; a situation that may frustrate first time buyers.
Zoopla, the property website, recently published figures showing that the average British renter pays 13% more than the average contractor mortgage holder. Residents of Milton Keynes pay an average £760 a month for the privilege of renting a two bedroomed flat. Buying a comparable property would actually save them £2,544 a year. In London the situation is even worse; it costs £5,964 more a year to rent than it does to buy.
House prices are falling, interest rates are at an all time low and demand for private rentals is soaring. This has to be a golden opportunity for those who can afford to buy, says Zoopla’s Nicholas Leeming. He went on to say that prices may reduce further as owners try to sell before Christmas.
So what is holding people back? The banks do seem to be relaxing their lending criteria. Mortgage lending increased by 6% in August, compared to the previous month and LTV mortgage values are increasing. 10% of mortgage approvals in August were for buyers with 15% or less deposit.
Research from the Halifax suggests that first time buyers have the best chance of succeeding if they look for a property in the North. In Selby for example, the average age of a first timer is just 25. Look south to Harrow and it’s 34.
There are now 228 90% LTV products on the market, according to Moneyfacts.co.uk and some lenders, including Nationwide, do offer 95% home loans to regular savers. Now could be a good time for contractors to go mortgage shopping!
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