Cheaper to rent than buy in 84% of the UK
Credit rating consultancy Experian says it is cheaper to rent than buy in 84 per cent of areas, while it’s cheaper to buy than rent in 13 per cent of locations.
Of the 10 places that are in the ‘cheaper to buy than rent’ there are six Scottish locations, three north of England places – including the city of Manchester – and one area of Wales.
The data, just released, is part of Experian’s campaign for mortgage lenders to take rental payments into consideration when judging borrowers’ capacity to pay mortgages.
Experian says the amount renters pay for their accommodation is either above or within 10 per cent of the monthly payments they could expect to pay for a mortgage in 27 per cent of areas across the UK. The consultancy says this suggests that, if they could raise a deposit, many of the 4.3m private renters would find monthly mortgage payments to be manageable and in line with their current rental commitments.
“Lenders already apply rigorous checks to assess whether mortgage payments will be affordable for would-be homeowners, following the Mortgage Market Review. However, by taking rental payments into account, lenders can get a more complete picture of a borrower’s financial track record and make more suitable lending decisions” says Experian’s Jonathan Westley.
The research also found that in 137 (or 36 per cent of) districts the cost of renting had increased in the third quarter year-on-year, while mortgage payments had fallen.
The reverse was true in only 16 or four per cent of places, suggesting the balance across the country is shifting towards mortgage payments becoming more affordable compared to those who are currently renting.
Blog Post from Letting Agent Today
If you have any comments, please email the author of this article and click on the link above