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To buy or not to buy: for millions, that really is the question. Is it better for your finances to take that first step onto the housing ladder, or is life as a renter a more affordable option?
According to Halifax, it’s currently cheaper to buy than to rent. Its study claims that the average cost of buying a three-bedroom property comes to around £705 a month. However, renting actually costs more - Halifax say the average renter of the same size property is shelling out £759 a month.
That difference can quickly add up - it comes to almost £650 a year - though it’s notable that the gap is closing. Back in 2011, however, renters were paying out £962 a year more than those who own their own property.
Renting can be a more flexible option, allowing you to move between areas relatively painlessly every couple of years. That said, buying a property doesn’t just allow you to secure a roof over your head - it can also serve as a very impressive investment.
Property prices in the UK have risen significantly in recent decades because there simply aren’t enough of them to meet demand. A report from the House of Lords last year suggested that we would need to build 330,000 homes a year in order to have a ‘moderating’ effect on house prices. In reality we don’t come close to that - last year around 170,000 homes were built.
As a result, for some homeowners, their property makes more each year than they do. A separate study by Halifax found that in a third of local authority districts across the UK, property prices have increased by more over the past two years than the average resident earned from their jobs. In Haringey, London, for example, property prices have jumped by almost £140,000 in the last two years.
Such a huge growth in equity makes it easier to remortgage down the line and could help provide a significant deposit when the time comes to move up the ladder. As you reach later life, the equity you have built up in your home can be released as you downsize, helping you supplement your living costs or even cover the cost of care. These aren’t benefits open to renters - the money they pay every month is going towards someone else’s mortgage payments, with no assets to show for it.
Whether you’re planning your first move or looking to move up the ladder, buying a property can be a stressful experience. Working with established professionals who know what they are doing, such as *NAME OF FIRM* can make the whole process much more straightforward.
Speak to a member of our team today about how we can help with your move. Call our team free on 0808 1685 643 or email us at firstname.lastname@example.org and we’d be happy to talk you through how buying a house could be a great investment for you.