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Renters could save £1bn by buying
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First-time buyers could be better off buying a property than renting, according to a new report. But with huge deposits needed to secure a mortgage, is it really that easy for first-timers to get their foot on the first rung of the property ladder?
New research from Abbey Mortgages has revealed that buying a house is cheaper than renting in every region in the country apart from the capital, where renting is still a cheaper option.
cut home costs
According to the report 1.61 million people said they were looking to buy in areas other than London. With average monthly rent coming in £434 for these regions, and average mortgage payments on a property with a 25% deposit coming in at £382, anyone buying could see themselves making a £52 saving each month.
Cutting costs
Savings made by buying a property differ around the country, with buyers in Wales set to save £90.91 a month, while those in the North West would save £87.43 and renters in Yorkshire & Humberside could save £77.06 if they bought. The opposite can be said of people looking to buy in London, who would see £466.19 added to their outgoings a month.
The report suggests that renters outside the capital could save a collective £1bn over the next 12 months if they bought a property now, rather than spending their money on renting – appealing if you can afford the deposit.
While typical first-time buyer flats and terraced houses have seen a decrease in value of 9% over the past 12 months, according to Abbey Mortgages, mortgage lending has become tighter, and first-time buyers still need to find huge deposits in order to secure the best mortgage deals.
According to Abbey, the average price for a typical first-time buyer property outside of London is £92,861. With most lenders requiring at least a 25% deposit, borrowers would need to stump up a whopping £23,215 to reap the rewards of buying outlined in the report – a sum many first-time buyers would struggle to find.
“Our latest research shows there is hope for first-time buyers. It’s now cheaper in all bar one of the regions to buy rather than rent, [which] shows that saving for that all important deposit is so worthwhile,” says director of Abbey Mortgages, Nici Audhlam-Gardiner.
With recent house price reports revealing that property prices are starting to rise again, the end of the stamp duty holiday in sight, and a lack of affordable mortgages available for first-time buyers, the odds are stacked against them taking advantage of the savings outlined by the report.
So, if you’re struggling to get your foot on the first rung of the property ladder – what are your options? We take a look at alternative ways to buy a home.
Published 9 October 2009
