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The Gap Between Buying A Property and Renting is Getting Smaller

Believe it or not, it is still less expensive to pay on a mortgage for twenty five years than it is to rent a piece of property for the same amount of time. Unfortunately, research that was released today showed that the amount of money to be saved by being a home owner has fallen seventy five percent from the amount of money to be saved with last year’s rates.

Over the course of a twenty five year mortgage, the cost of buying a property averaged out at almost four hundred and thirty eight thousand pounds. Rental payments made over the same time period came out at about four hundred and forty four thousand pounds, so the savings are relatively small. According to research, last year home buyers could manage to save about twenty four thousand pounds by buying their home, but because of the ever present rise of home prices and increasing interest rates the amount saved has been reduced to less than six thousand pounds.

In some areas of the United Kingdom it is now actually cheaper to rent a property for twenty five years than it is to buy a property with a twenty five year mortgage.

Northern Ireland is one of these areas. In Northern Ireland housing prices have increased by fifty percent over the last twelve months and renters end up paying not quite four hundred thousand pounds over the course of twenty five years, while home owners paying off a mortgage over the same period of time end up paying almost five hundred and seventy three thousand pounds. This means that Northern Ireland home owners are paying, on average, forty six percent more than people who have rented their homes.

Wales is another part of the United Kingdom where it is cheaper for residents to rent their homes than it is for them to buy. While the figures do not include any set up costs that are involved in a mortgage, they do figure in the cost of apartment maintenance. The same figures apply for Yorkshire, Greater London and north west of England.

There are some who might debate that the housing market has simply reached its peak. After all, first time home buyers are getting hit by increased interest rates and mortgage fees. The Council of Mortgage Lenders has released figures that illustrate that the cost of a mortgage is the highest it has been in sixteen years.

A finance manger at one of the leading financial institutions in the United Kingdom says that there are many factors that, when put together, have contributed to mortgages and rental prices starting to even out. The same finance manger has pointed out that there are still benefits to buying a house. While it might be more expensive, at the end of the mortgage period, the homeowner gets to keep their house. At the end of a rental period, the rental unit still belongs to the landlord. It never ever becomes the property of the renter.

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