Buying is 16% more cost-effective than renting in London
Renting a home in Britain is currently 9.7% more expensive than owning on average. And it is cheaper to buy instead of rent in four in five of the 50 largest towns and cities across the country, according to the latest research from leading property website Zoopla.co.uk.
The research looks at the current asking prices and rents of two-bedroom flats around the country and assumes interest-only mortgage payments of 5% p.a. to provide a comparison to the cost of renting.
Even in London, which has by far the highest property prices in the country and where the average 2 bedroom flat is going for £431,366, buying is still 16% more cost-effective than renting. With average rents at £2,137 per month in the capital versus an average cost of a 5% interest-only mortgage at £1,797 per month, renters pay an extra £4,080 annually compared to owners.
Nicholas Leeming, business development director of Zoopla.co.uk, commented: “The relative cost of renting as opposed to buying has increased over the past 12 months as rents have risen and house prices and interest rates have remained flat. Almost 750,000 would-be first-time buyers have reluctantly ended up as renters over the past 3 years as a result of being unable to get a mortgage. With current house prices and interest rates where they are and with rents on the rise, for those who can get a mortgage, there may never have been a better time to buy.”
With rental prices increasing all over the city, it appears to be more cost effective to look into getting a mortgage again. Check out properties for sale in the area you are currently renting in - buying your next home might be cheaper than you think.
Source: www.zoopla.co.uk
Is now the right time to sell?
There are many conflicting reports on the future of the London property market. The 2011 Rightmove House Index Report shows the beginning of 2011 to be much the same as 2010 with a slight increase in the house prices in the London area. However The Guardian reported on Saturday that house prices are to fall by 20% over the next two years.
Smart vendors are contacting us now for valuations on their properties to have a good idea of where they stand in the market should they decide to sell before the market dips.
Homeowners should brace themselves for a “short, sharp shock”, with house prices set to fall by up to 20% over the next two years as rising unemployment and public spending cuts take their toll, experts are warning.
“Prices are trending slowly downwards at the moment, but our view is that this is really the start of the second leg of the correction, and we expect prices to fall significantly further,” said Paul Diggle, property economist at consultancy Capital Economics.
He calculates that the average home remains up to 20% overvalued by historical standards – and with the mortgage market still tight and unemployment rising, 2011 could bring prices crashing back to earth.
The impact of any downturn is likely to vary across the country. Miles Shipside of property website Rightmove said prices in each area would be driven by the fortunes of the local population, with the worst-hit places likely to be those where public sector layoffs are worst.
“Forced sales will be the issue, so it depends on the make-up of your area – the level of unemployment and financial hardship,” he said.
The gentle alarm has been sounded, and for those who are already pondering the idea of selling their property – now really might be the best time,
For more information contact your local Greene & Co.
Source
http://www.guardian.co.uk/money/2011/feb/19/house-price-fall-20-per-cent
Are property prices coming down?
Since the abolishment of HIP’s some interesting things have been happening in the property market. According to Rightmove “the market is starting to turn due to increased competition among sellers and fewer potential buyers”. This could be a great time to buy, as each day more properties are coming on the market and prices are also dropping. Our Managing Director, David Pollock had this to say about the current market situation.
“The London market is a different market place to the whole of England. London is in a bubble and therefore it is always a little dangerous to base house buying and selling strategies on whole of UK indexes. Having said that the abolishment of HIPS in the long run will be great for the London and UK market but without doubt there is going to be a period of adjustment. Will prices in London go up, go down or stay the same. Is now a great, average or poor time to buy or sell? The experts don’t and cant seem to agree. My advise is see property firstly as a home and secondly as an investment, its when you do it the other way round that things start to go wrong.”
We will have to wait until the emergency budget is announced to see the true effect on the market as many fear that capital gains tax could be increased but we wont find out until everything is revealed tomorrow.
House Prices Rising
The housing market seems to be going from strength to strength at the moment. Asking prices have risen for 11 consecutive months with and increase last month of 0.7%. The average entry level price for a house is approximately £155,242. If you are looking to buy a house for the first time now could be a good time to get hunting as prices are going to continue to increase, and although stamp duty does not apply on purchases under £250,000 for first time buyers they still need to have a significant deposit to get into the market.
An article from find a property ““The building blocks are present for a sustained recovery, but we do need lenders to step up to the plate and free the purse strings for first-time buyers. That will not only help the buyers themselves, but also the market overall and the wider economy.””
It could also be good to look into a property for investment purposes as there is currently a huge demand for rental properties in many areas of London, which means there are people out there looking right now! But this is not something you should enter into lightly. A huge amount of research is required to find the right investment property however there are many avenues which can help you along the way. Getting your finances in shape is also one of the keys to getting started with property investments, as depending on how long you keep the property expenses will vary.
To read more about the topics above click on the link below
http://www.findaproperty.com/displaystory.aspx?edid=00&salerent=0&storyid=23504
The FindaProperty.com house prices and affordability index
Some interesting news from FindaProperty.com’s October affordability index - house prices are rising, but affordability for first time buyers is deteriorating…
“It’s never easy to get on the housing ladder but until the summer we had been seeing a gradual narrowing of the affordability gap. This has led to a definite pick-up in first time buyer activity as people have taken advantage of improved affordability and the stamp duty exemption on properties priced under £175,000. With prices now rising and affordability tightening again it becomes even more important that the Government retain this beyond its end date of December 31st.” Michael Flynn, Director of FindaProperty.com offers his opinion on the findings.
The lowdown on Mansion Blocks
These striking, red brick apartment blocks have a sense of granduer about them, making them an appealing place to live. Often found in well connected areas, such as Maida Vale and West Hampstead, which offer a welcome, but nearby retreat from the hustle and bustle of central London.
Primelocation.com takes a look at the pros and cons of mansion block living, a little bit of history and some advise on buying one for yourself. Read the article on Mansion blocks here.
House prices on the up
Following on from the news yesterday that mortgage approvals are 20% up, according to this article in the Times , house prices have risen for the first time since 2007! Could this mean we’re on our way to recovery from the financial crisis?
It certainly looks hopeful, but I I still thinks there’s a long way to go just yet.
