It has been reported that the average monthly rental prices in the UK now surpass the payments of the average mortgage, meaning those who rent are likely worse off.
According to research, someone paying off a mortgage would be better off by about £2,300 per year, than those renting.
Of course, a mortgage comes with the extra added benefit of owning equity of the property, with the long term plan of becoming the sole owner of the entire property.
Renting, on the other hand, sees no special benefit by the end of the renting term. The money has simply gone to the landlord.
The average monthly rent in the UK at the moment is apparently £995 per household, while a first time buyer, on average, will be paying £805 per month.
Of course, the housing market differs across the country, and those living in the East of England will be paying just £2 more (if they have average mortgage repayments) than the average rent price per month.
Miguel Sard, director of mortgages at Santander UK said “people assume that buying a property will put them under greater financial pressure, but often the reverse is true.”
The major issue for first time buyers is the deposit that they need to purchase their first deposit. Of course, with rent costing more than mortgages, it would be very difficult for anyone to build up a deposit while renting.
This, is, of course, where the Help to Buy schemes come into play, to help these people get onto the property ladder,
“With annual savings averaging well over £2,000, this can really mount up over time and of course once the mortgage is paid off you have a valuable asset to show for it,” Mr Sard summed up.