If a person has a choice between owning property and renting property, there is a convincing argument to be made for owning property. This is because each monthly payment is going towards an asset that will one day be fully owned by you, or at the least, give you something which can be sold to partly pay for your next property move. Of course, there are many reasons why someone would decide to rent as opposed to own property, and a new study suggests owning property is now cheaper than renting.
This study has been undertaken by Santander Mortgages and it suggests that people’s monthly outgoings will be lower with a mortgage than it would with rental payments. This is based on average monthly rental fees now being higher than average mortgage payments. Whether this is true for you will depend on your circumstances but taking the average payment figures is a good starting point for any discussion.
Significant savings can be made
These figures suggest that the average first-time buyer will be able to save more than £2,250 through buying property as opposed to renting. In London, the average monthly rental fee has been classed as £289 higher than the average monthly mortgage payment, so homeowners in the capital are likely to be better off owning property, it they can arrange a mortgage.
In the UK, the average monthly mortgage payment per month has been listed as £723 and the average monthly rental fee has been classed as £912. The difference adds up to a saving of £189 each month, which is certainly a sum of money that would appeal to most people these days.
Saving for a deposit is a challenge
Santander UK have a released a statement through their Managing Director of Mortgages, Miguel Sard; which reads; “Many first time buyers understandably focus on the challenge of saving for a deposit and wonder how they will afford a property. However, it is often assumed that when you purchase a property you will be under greater financial pressure and our research shows the reverse is true.”
Not everyone will agree with this premise. There is a prohibitive cost of property ownership associated with the deposit and a property owner is responsible for the maintenance of their property. These aspects can push the cost of property ownership to a higher figure but when it comes to monthly payments, there is no denying that a mortgage makes sense for many people.
If you are looking to buy property in Brixton, I am happy to help, so contact me for guidance and assistance in stepping on to the property ladder.
CEO, Kings Accommodation