Cheaper to own a home than rent
Yes, it’s official! News this month confirms it’s cheaper to own a home and pay mortgage repayments than to rent. Research from Santander Mortgages reports potential first-time buyers could save in the region of £2,268 a year if they were able to purchase a property over renting. The cost of renting now outweighs that of monthly mortgage repayments by an average of £189 a month with average rents at £912 per household, compared to £723 for repayments.
Dis-spelling the myth
For anyone who thought owning a home is more expensive than renting, these figures make welcome reading. Yes, the initial steps to getting on the housing ladder is a significant financial investment, the challenge of saving for a deposit often the most difficult. But knowing home ownership can save over £2,000 per year, it’s clear the long-term financial benefits to be had. And of course, deposits and mortgage payments help build up equity which ultimately results in owning a valuable asset.
Saving is a challenge
But saving for that all-important deposit is a tough task for many, especially while balancing other monthly outgoings such rent, bills and lifestyle spending. And with rents higher than ever before, it just got even more difficult. It’s no wonder prospective first-time buyers look to creative means to save. From borrowing from the Bank of Mum and Dad, to moving back home and cutting down on recreational luxuries, it’s clear there’s more help needed to get people on that first step to buying a property. And not just, but more homes are required as the country faces a supply issue, including the development of affordable properties so young first-time buyers can get that first property and escape the high costs of rent.
Buy new and benefit
Buying a new build property offers more options for first-time buyers through the various schemes available. The Help to Buy scheme for example only requires a 5% deposit to secure a 75% mortgage, with the Government funding the rest. There’s also the Help to Buy: ISA scheme whereby the Government gives a bonus towards saving, allowing deposits to be saved for more quickly; and it works per person rather than per household, so a couple can take advantage of the extra boost, individually. And when buying new, it’s also worth asking what added extras you can get with your new home as developers sometimes run incentive offers as much as be able to offer a home complete with integrated appliances, saving you money in the long term.
If you’re looking to buy a new home and save on expensive rental costs, contact us to find out more about the developments available and what schemes can help you get on the ladder quicker.
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