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Gap between renting and buying at its lowest level for nine years
The gap between the cost of buying and renting is down 59 per cent to its lowest level in nine years according to the Halifax.
Back in 2017 buyers were saving an average £900 a year compared to renters but the latest figures show this saving is down to £366 by the end of 2018.
Housing costs, including a typical mortgage on a three- bed home in the UK, were £729 a month in December 2018, compared to the average monthly rent of £759 for the same property type.
Buying in recent years has meant lower monthly costs than renting across the UK but the latest picture shows an uneven snakes and ladders effect, says the lender.
Outside of London, Scottish buyers have the highest average annual savings of 20 per cent (£1,574) against renting, compared to the smallest financial gain which is in Yorkshire, where the cost of buying is only five per cent lower than renting (£361).
Regionally, buyers are better off than renters in Wales with annual savings of over £2,000 (14 per cent) where by in Northern Ireland mortgage payers are saving seven per cent less than their Welsh counterparts at £382 annually.
New Buy to Let mortgages have slowed down and first-time buyers are now driving the number of house purchases with a mortgage.
The number of first-time buyers in 2018 hit 370,000 while the number of mortgages for Buy To Let house purchase at the same time fell for the fourth year to 66,400, according to UK Finance figures.
Remortgages however have been rising showing the effects of recent changes impacting landlords including an additional charge on stamp duty for new Buy to Lets and the removal of mortgage interest tax relief.
“The gap between buying and renting is narrowing, primarily driven by reduced first time buyer prices deposits in some regions and continuing house price growth, meaning buyers are paying more on their mortgages” according to halifax’s managing director, Russell Galley.
“With more products available for borrowers, these factors combined have pushed up the price of buying quicker than the price of renting. Meanwhile, the cost of rent, household maintenance and average deposits have remained broadly flat.”
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Original Source: Letting Agent Today.
Original Author: Graham Norwood.
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