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Mirror: Renting Is A Good Option

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http://www.mirror.co.uk/news/money/mirrorm...89520-20363108/

QUOTE

Renting property is a good option

RENTING IS A TOP OPTION IN TOUGH MARKET

26/03/2008

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News picturesThe housing market is changing. The days of easy money are over, with lenders no longer offering 100 per cent or more of the value of a home.

Prices are likely to stagnate in 2008 and with mortgages more difficult to come by, renting could be a good option.

David Hollingworth, at mortgage broker London & Country, said: "It is good news in lots of ways because it allows first-time buyers to catch their breath and save up a deposit without worrying that house prices are running away from them."

The rungs on the property ladder are snapping because lenders themselves are also suffering from the credit crunch. They can't get the funds to lend to would-be borrowers.

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As money gets scarce, only borrowers with the biggest deposits and best credit history will get cash.

People coming off a special deal now face an uncertain future. If they can't move on to another special deal they could see their repayment soaring by hundreds of pounds a month.

Rob Clifford, chief executive of broker Mortgage force, said: "Some people are sitting tight and waiting 12 months before buying but there is always the real risk that there will be less choice in the mortgage market."

So for many, a stretch in rented accommodation lies ahead...

The good thing about renting, says Ian Potter, operations manager of the Association Of Residential Letting Agents (ARLA), is that you have flexibility. "You can move about to follow jobs or just have the lifestyle you want without the commitment of a mortgage."

The huge number of buy-to-let flats bought over the past decade means that the choice of rented accommodation is huge.

Bills are also cheaper in rented accommodation, as you typically have no buildings insurance to pay and the landlord must pay the cost of any wear-and-tear maintenance.

The rent you pay could also be less than the mortgage payments on an equivalent flat.

The average price of a two-bed roomed flat in Brentwood, Essex, based on properties advertised on property website Right move, is £180,000.

With a three per cent deposit the mortgage payments would be £1,107 a month on a 5.89 per cent two-year fixed-rate repayment mortgage with Halifax. According to ARLA, rent would be £800-£1,000.

The figures are similar in Hull, where a two-bed roomed flat costs an average £150,000.

With a three per cent deposit, monthly mortgage repayments are £923 on the same deal as before but rental payments range between £350 and £750 a month.

Edited by notanewmember

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Just caught the last few minutes of some programme called LLL and there was some bird on there going on about buying a house is the best investment you can make and said something negative about wasting loads of money on renting. ;)

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    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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