Fast forward to today’s brave new world, with house prices 34% lower than in 2008 and the scales have tipped almost completely in the opposite direction. For the first time in recent memory, it is now cheaper to buy a property than rent one. Figures released by Halifax show that nationally the average total of mortgage repayments, repairs and home insurance is 16% less than the cost of renting a property.
As would be expected, the percentage is not as large in the North East, with the region seeing a 6% or £27 a month difference, in real terms.
On the face of it, the figures can be seen as a positive for the housing market, and with property purchases reaching a five year peak in 2012 you would be forgiven for thinking that that was the case. However, the 2012 sales figures are still 42% lower than five years ago, and with the economy on the verge of a triple dip recession, there is little likelihood that they will increase anytime soon.
Lack of job security in today’s fragile economy and the high cost of a deposit, typically over £27,000 for a first time buyers, are the main reasons cited for not buying a property. But taking advantages of the current situation is not completely out of reach. Several schemes have emerged over recent years to encourage people to buy properties rather than rent.
The Government’s FirstBuy scheme is aimed at stimulating both the property market by providing a 20% equity loan to eligible applicants. £280million has been put aside for the scheme which also has the added appeal of a ‘staircase’
The HomeBuy scheme is another Government-backed initiative that is a very popular way of buying for people who are currently renting from a housing association. Others include shared ownership and NewBuy, which is the Government backed ‘mortgage indemnity’ scheme that aims to help people with smaller deposits buy a new build home.
Taking the leap on to the property ladder at the current time may be difficult, but once you are there, it may well be the best move you’ve ever made, as well as helping to trim your household costs in the short to medium term.
This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.
Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information: