The number of people who cannot find enough money for a deposit to get a mortgage are in a far worse position than ever before. Nowadays it costs more to rent than to be paying a mortgage on the very same property in many of the towns and cities in Britain.
The growing trend due to rising rents and constantly low rates of mortgage, surveys show that only a year ago it was far cheaper to obtain a mortgage than to rent a property in 40 of the largest areas. The difference in cost amid paying to have a mortgage and paying to have a rental property has grown by almost 50 per cent during the period in question. During most of the last ten years, when prices for housing and mortgage rates were at a high, it was far easier to obtain a mortgage with a minimal deposit, it was in most cases cheaper to rent a property.
Estimation by Financial experts have revealed that with a 15 per cent , those who are able to get a mortgage will be approx ten per cent a month better off than those who are renting. The change is bigger if a borrower has 40 per cent deposit because they would be able to get a very low rate on their mortgage. Information from other sources including letting agencies and lenders are showing that the rises in rents during 2010 and 2011 may be dwindling.
A large number that is growing of young workers who are unable to secure mortgages have pushed the rental market up by 10 per cent since 2008, when the banks were hit hard.
In the London area increases have doubled that. With more of their cash going on accommodation , tenants are finding that they are not in the position to be able to save for a deposit so their prospects of owning a home are very slim.
It has been highlighted that the financial advantages for those people who are able to find a deposit and buy a property, if they are able to save then young people earn almost no interest on their money, while the rental and the growing cost of living still continues to rise. Compare this with those who are in the lucky position to be home owners and who are benefiting from the low rates on their mortgage.
With higher rents and lower mortgage rates landlords are being attracted back to this market. Higher taxation on buy to let properties has experienced a comeback over ther past year, this is threatening to change the trend more first time buyers.
Fiona Davies is a director at The Property Fairy.
She has worked in the land and property sector for the last ten years.
All articles on the website are written uniquely by her.
This article is copyright free.