22 October 2009
According to a recent report many first time buyers would find it cheaper to buy a home than to rent one in most parts of the UK providing they can find a reasonable deposit to put down on the property.
The report showed that in all regions, other than London, mortgage repayments would actually work out cheaper than monthly rent for first time buyers with a deposit, so they could benefit from both lower monthly outgoings whilst being able to get onto the property ladder.
The research was carried out by Abbey Mortgages, and showed that a first time buyer with a deposit of 25 percent would pay an average mortgage repayments of £382 per month compared to an average rent of £434 per month, although the level of savings to be made varied from one region to another, with the largest saving of over £90 to be made in Wales.
However, whilst there are some great savings to be made it is important for consumers to remember that they will need to get together a decent deposit in order to enjoy cheaper mortgage compared to rent repayments.
One official said: “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 worthwhile too.”
The research did show that in London it was actually cheaper to rent a property than to try and manage mortgage repayments, and therefore those living in the city may find that the best option in the current climate is to rent rather than attempt to purcahse a home.
Even with a 25 percent deposit the average mortgage repayment in London would be £1116 due to higher house prices, whereas the average rent would be £650 per month.
Tags: rental costs, mortgage costs