The Halifax has produced some interesting research* which reveals that 'first-time buyers are now saving more than £800 a year as the gap between buying and renting has stretched by 8% in the past 12 months'. Some key findings from the report show that:
monthly rental costs have increased by 10% to £821 in the past year, while monthly buying costs have increased by 1% to £753 during the same period
over the past decade, average monthly buying costs have increased by almost a third (31%), while the cost of renting has gone up by 36% during that time
buyers in London are on average £4,822 a year better off than those renting. In the South East buyers are £2,597 a year better off, followed by East Anglia (£2,019) and Scotland (£2,010)
the slimmest gap between buying and renting is in Northern Ireland, where buyers are £397 a year better off, followed by East Midlands, where homeowners are saving on average £897 and Yorkshire and the Humber, where buyers are ending up with around £961 a year compared to those who are renting.
One of the biggest challenges continues to be saving for a deposit, which can be a controversial topic. A well-known TV presenter was criticised recently for suggesting that people might be able to afford a house if they considered cheaper locations to buy and saved harder. There is no doubt that anyone thinking about buying a house must plan ahead.
It will be necessary to save a deposit and get the finances in order. All lenders now look at a person's monthly outgoings to work out if they can afford mortgage payments and they will take account of monthly subscriptions and shopping bills when deciding whether to make a mortgage offer.
So, buying a first home generally cannot be a spur of the moment decision. Buyers should carefully research where they would like to live and the property prices in those areas and consider services of a mortgage broker to help them find a suitable mortgage product.
A significant number of conveyancing transactions for through each year causing all parties involved significant stress and wasted money. It is often the case that the conveyancer only becomes involved in the transaction once the buyer's offer has been accepted. This might be too late in many cases.
Instructing a conveyancer early on can give a buyer significant peace of mind. The conveyancer will certainly be able to deal with the due diligence, identification and money-laundering requirements in good time if they are instructed by a buyer client early in the transaction. The conveyancer may also be able to discover things about the property or the locality early on which means that a buyer can withdraw from the transaction before spending significant amounts of money.
Renting a property is also becoming an increasingly risky business. A prospective tenant is often asked to sign a lengthy and complex tenancy agreement under pressure to try to secure a property and will usually be asked to pay a dilapidations deposit plus a month's rent in advance. Many people renting a property would find that asking a specialist property lawyer to check the tenancy agreement prior to signing it is money well spent.
To discuss this or any other property related matter, contact us.
* The Halifax Buying vs Renting Review