Rent prices have sky rocketed recently as buy-to-let investors start to capitalise before the new stamp duty tax effects them in April 2016. Research by Santander Mortgages reveals that buying is now cheaper than renting in every area of the UK. London especially rent prices are, relative to the rest of the UK, 56% than the average.
First Time Buyers would have lower monthly outgoings if they bought a property than they do renting. The balance has tipped so that average monthly mortgage repayments are now cheaper than average monthly rental prices and buyers could save £2,300 a year by purchasing a property, the research reveals.
The average price across the country being £212,610, with Help to Buy in place a First Time Buyer would need 5% deposit in order to get on the ladder, coming in at £10,630 for a deposit. The Help to Buy scheme will cover up to 20% (£42,522) of the price as a deposit leaving the buyer having to source a mortgage for £159,458 which is much more manageable for First Time Buyers than in previous years.
Miguel Sard, the managing director of Mortgages at Santander UK has said “people assume that buying a property will put them under greater financial pressure, but often the reverse is true. With annual savings averaging well over £2,000 this can really mount up over time and of course once the mortgage is paid off you have a valuable asset to show for it”.
Taking those first steps on the property ladder can be a daunting task for some however there are deals available to give First Time Buyers a leg up onto the property ladder. Speaking to a good mortgage adviser is crucial to getting the best mortgage on your property and setting you up with your first property.