Homeowners are £1,400 per year better off than those who rent, a study has revealed. Mortgage deals released of late have allowed individuals to pay an average of £600 per month for a three-bedroom home, £116 less than the cost of renting. In 2008, meanwhile, homeowners incurred an average mortgage of £928 per month for a three-bedroom home, 29 per cent greater than the then cost of renting. The cost of insurance and maintenance were included during the comparisons process. The gap was found to have increased considerably over the past year and experts predict that it will further widen as increasing numbers of prospective home buyers struggle to find the cash required to place a deposit on a house and hence, become trapped in rental accommodation.
Halifax, which conducted the research, stated that the fall in home purchasing costs were driven by a drop in mortgage charges and property prices. Mortgage rates fell to 3.63 per cent in 2011, down from a rate of 5.75 per cent in 2008. Average property prices have also dropped, falling 11 per cent over this same period.
Experts fear that the number of mortgages granted to first-time homebuyers could reach an all-time low this coming year. Martin Ellis, the Halifax’s housing economist, claimed that, despite the increase in the affordability of purchasing a property, the number of buyers has continued to drop due to the considerable deposits required and economic uncertainty.
Duncan Lewis’ conveyancing solicitors are experts at preparing the legal documentation required when purchasing a home.