For lots of people, a rented property is a platform where they can live whilst also hopefully putting aside enough to later make that first step onto the property ladder and buy. While this is many peoples intention, it is becoming increasingly difficult to achieve. At Search Mortgage Solutions, our mortgage brokers in Manchester, Leeds, Liverpool, London, Bristol and Birmingham have been crunching the figures, and assessing why in the current climate, entering the vicious circle of renting, makes it increasingly difficult to purchase your first home.
The Average Rental Cost Is Rising
Following recent figures released in August by HomeLet, the average price of renting a property in the UK rose to £937 per month. The most dramatic rise in rent came in the South-West, where the average rental price is £977 per month, which was more than a £100 rise on 2014’s figures. The rising rental costs have been apparent in every region in the UK except one. The North West of England actually posted a 1.4% decrease, but stands alone as the anomaly amongst these figures.
All this means is those aspiring to buy a home in the future but currently rent, are finding it increasingly difficult to meet asking prices of houses when their potential savings are being shortened by increasing rent. Making matters worse are the rising house prices, which further narrows the goalposts.
House Prices Are Rocketing
One explanation for the rise in rental properties points to the initial rise in house prices which has skyrocketed in the last year. This has left an increasing number of people looking to rent for longer because they cannot afford to buy yet. It has been at this point in which landlords have taken the opportunity to make more money by bumping up rental costs because they know there are plenty of people competing for them, perpetuating the vicious circle of renting.
So what options do you have if you’re currently renting but are desperate to buy? Well according to HomeLet’s Rental Index, the rise in rented properties massively varies around the UK. For example though the South West, South East and London have suffered, rented properties in Wales, Northern Ireland and East Anglia have barely shifted, and as previously mentioned the North West has actually dropped 1.4% (thats an average of £9 in the last 12 months).
Stand Your Best Chance Of Owning
To stand the best chance of getting your foot on the property ladder, these areas might be the best bet. As it stands they give you the cheapest rental base to save. Despite this, no matter where you are house prices and mortgages do seem to be on the rise, meaning the vicious circle of renting continuously tightening.
If you are in a position to buy, then now could be a good time to do so. though prices are consistently on the rise, there are more mortgages deals available than ever and they are currently comparatively low compared to renting prices. In fact on current rates, it is on average £56 cheaper to pay off a mortgage than it costs to rent a 3 bedroom property.
Here at Search Mortgage Solutions, we can provide expert advice on all mortgages, and whatever your situation, we can help. Whether you are looking to ‘Buy to Let’ or a first time buyer, we have the experience and knowhow to help you get the best deal.