Buying Now Costs Less Than Renting in Over Half of UK Cities

by Mark Alexander

9:55 AM, 4th May 2016
About 3 years ago

Buying Now Costs Less Than Renting in Over Half of UK Cities

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Buying Now Costs Less Than Renting in Over Half of UK Cities

A Press Release submitted to me by a PR agency yesterday really annoyed me, and that was just the headline. Buying Now Costs Less Than Renting in Over Half of UK Cities

Before you read the press release you might enjoy reading my response …….

“Hi Zoe

If this is correct it is absolute proof that the Government tax attack on private landlords is utter lunacy.

The private rented sector is growing BECAUSE people with choose not to own (e.g. For greater job mobility and flexibility) or are unable to own due to unavailability of mortgages (e.g. Bad credit).

For those who can’t or don’t want to own any shrinkage of the PRS in real terms can only lead to one thing, higher demand and less availability = rent inflation.

Regards

Mark”

Now for the Press Release ….

According to the research, the study reveals that monthly mortgage repayments or using the ISA help to buy scheme works out cheaper than renting in over half of UK cities.

Using Zoopla’s API, Strata Homes have calculated the average sale price of properties in the UK and worked out the typical average monthly mortgage repayments in contrast with average monthly rental fees of houses.

The rest of the results are in the release below but from the research, they found:

• The top three UK cities where buying is most cost effective over renting is Peterborough, Glasgow and Coventry
• Glasgow, Hull and Doncaster are the top cheapest places to purchased house
• Property purchasers in Glasgow who had used ISA’s Help to Buy were £295 better off using the Government’s scheme per month than renting
• London, Brighton, Bristol and Swansea were the only cities that were more cost effective to rent per month

Top Cities Buying is Cheaper Than Renting (- Difference in pounds per month)

Peterborough (+£244)
Glasgow (£+209)
Coventry (£+106)
Manchester (£+86)
Leeds (£+67)
Newcastle (£+59)
Stoke on Trent (£+53)
Hull (£+51)
Doncaster (£+47)
Liverpool (£+43
Derby (£+32)
Sheffield (£+32)
Bradford (£+28)
Nottingham (£+6)

Top Cities Renting is Cheaper Than Buying (- Difference in Pounds per month)

Birmingham (-£2)
Cardiff (-£14)
Wakefield (-£25)
Edinburgh (-£26)
Leicester(-£26)
York (-£35)
Plymouth (-£44)
Southampton (-£69)
Portsmouth (-£87)
Swansea (-£101)
Bristol (-£164)
Brighton (-£430)
London (-£1,690)

Buying Now Costs Less Than Renting in Over Half of UK Cities

• Monthly mortgage repayments are less than monthly rent in over half of the UK cities
• Buying is most cost effective Doncaster, Hull and Bradford
• Property purchasers in Glasgow who had used ISA’s Help to Buy were £295 better off using the Government’s scheme per month than renting
• Residents in Peterborough will save
• London, Brighton, Bristol and Swansea were the only cities that were more cost effective to rent per month

Figures published from the English Housing Survey’s latest data, reveals the private rented sector has doubled in size since 2002, whatsmore, statistics from the Office of National suggest people still renting in their thirties are at a record high.

With data from Halifax suggesting renters pay an extra £900 a year on average, a UK home building company has undertaken research to find out where in the UK is cheaper to buy over renting per month creating an affordability map of the UK.

Using property website Zoopla’s API, Strata homes have calculated the average sale price of two bedroom properties in the UK and worked out the typical average monthly mortgage repayments in contrast with average monthly rental fees of two bedroom properties around the UK. According to research, the study reveals that monthly mortgage repayments or using the ISA help to buy scheme works out cheaper than renting in over half of UK cities

Doncaster, Hull and Bradford scored the top three cheapest areas in the UK to purchase a house, with mortgage repayments totalling as little as £520 per month for a two bedroom house in Glasgow in comparison to £729 average rent per month.

In Peterborough, a first time buyer using the ISA scheme would actually save £344 a month paying off a standard mortgage on a house than renting one. To rent a two bedroom house in Manchester would cost an average of £762 a month, but to buy would mean you are only paying an average monthly mortgage repayment of £676 per month, saving you £86. To live in the second city, Birmingham residents would only be paying a £2 difference to own a home over renting per month.

Gemma Smith, Sales Director at Strata Homes says, “Once you get over the initial deposit sum, people are surprised at how much you can save in some areas of the UK than to rent. Thanks to the Government’s ISA Help to Buy scheme, it is easier than ever to get onto the property ladder with over 3000 accounts opened so far this year.”

From the research gathered, southern cities such as London, Brighton, Bristol and Swansea were least cost effective when buying a house due to sky high house prices.



Comments

Jeremy Edwards

12:55 PM, 4th May 2016
About 3 years ago

My first reaction is a big so what?! It is a statement of the bleeding obvious; sometimes capitalism smooths out the bumps in life and sometimes it doesn't!

As a generalisation, you would expect buying a house on a mortgage to be cheaper, long term, than renting; as a landlord I need a profit to keep going. Conversely market inefficiencies, (like buggering around with tax relief), will distort the market, so that some places will be cheaper to rent than to buy.

Private landlords are more nimble than the statutory bodies, so will usually set up shop where a profit can be made. What central government has failed to address is the lack of rental properties in hotspots and the uneven provision nationwide. Demonising private landlords makes as much sense as banning white cars from the road to reduce congestion.

Gary Dully

8:38 AM, 5th May 2016
About 3 years ago

This is just another attack on Landlords.

Why not compare buying to your shopping bill?
Or buying and running a car is more expensive than a home?

or

Energy bills cost more than a holiday in Australia?

David Price

9:50 AM, 7th May 2016
About 3 years ago

When renting a property all the maintenance is undertaken by the landlord. in order to make a direct comparison the cost of ownership should include all the maintenance costs. Maintenance costs, which are generally quite high are conveniently excluded from every comparison I have seen.


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