According to a report by Halifax, buying a house is currently cheaper than renting a house across every region in the UK.
The report explains that annual savings for people who buy a house rather than rent one equates to £651 each year.
Monthly costs for a three-bedroom house, when including the cost of mortgage payments, was £705 in December 2016. In comparison, the costs for a rented three-bedroom house at the same time was £759 – an additional £54 when renting rather than buying.
Commenting on the report, housing economist at Halifax, Martin Ellis said: “Although the average costs associated with buying costs have grown at a faster rate than average rents over the past few years, owning a home is still the more financially attractive option.”
Can first time buyers afford to buy instead of rent?
According to Halifax’s first time buyer review, there were 335,750 first time buyers in 2016, an increase of 8% on the previous year. Despite the difficulties associated with raising a deposit, with government programmes such as the Help to Buy Scheme and low interest rates, paying for a mortgage seems to be perfectly doable for first time buyers – particularly considering that it appears that monthly mortgage costs are cheaper than the equivalent rental costs.
How can first time buyers afford a deposit?
According to previous Halifax research, the average deposit when purchasing a house was £32,321 in 2016. This is a lot of money to save and is the equivalent to 16% of the average price of a house that a first time buyer is typically likely to buy.
However, it has been proven that it’s achievable! So, how do people do it?
Tips for saving money for a deposit, include:
- Don’t get caught in a rent trap – if possible, find a room to rent instead of an entire property, or better still, see if you can return home to stay with your parents for a year or two. The ‘backwards step’ can be a great motivator for putting every spare bit of money into deposit savings each month.
- Share your space – if you are renting but have a second bedroom, find someone else to live there with you if your landlord allows this. Splitting the bills will give you a cash boost every month, which you can put straight into savings.
- Save wisely – try putting your savings into an ISA – it’s harder to draw them back out again when you’re short at the end of the month and you’re likely to get much better interest rates on your savings than if you had left them in your current account, where they’re also far more likely to be spent.
Buying your first home
When it comes to the point where you have saved enough money and you have a mortgage in place, get recommendations for people to carry out your legal work in relation to purchasing your property. You will need a solicitor or conveyancer who specialises in buying homes.
You should also consider how quickly you need to move. Sometimes, the people you’re buying the house from will be in a chain and will need to move into the property that they’re buying at a time that’s convenient for them.
Ask your solicitors how likely it is that they’ll be able to have you moved in by the date that your sellers want to be moved by, and what their average turnaround is like at the minute. If they’re too busy, it might be worth getting other recommendations.
Solicitors for first time buyers
Whether you’re buying your first house or your third house, our qualified residential property experts will make sure that you receive the best possible service for a reasonable price, regardless of how busy we are. To contact our conveyancing solicitors, call us or feel free to visit any of our offices across Leicestershire: