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To Rent or To Buy? The Debate Rages On!

by Alison Feemantle

It’s a question that will probably never be met with a definitive answer as many would be homeowners face up to the question of whether buying or renting is their best option. Naturally, as individuals, those in this position will have a differing set of circumstances and the difficulties in securing a mortgage may well be enough to push many down the rental channel.

As for the costs involved, the Halifax has declared that home owning is considerably cheaper and on average, anyone renting their property could be paying in excess of £100 a month more for the privilege.

As part of the Halifax Buying Versus Renting Review, the organisation took into account many factors including the relative cost of monthly mortgage and rental payments, the cost of essential building repairs and maintenance and any money lost as a result of funding a deposit. Additional expenditure such as buildings insurance was also used as part of the overall survey.

Using their own records and those supplied by the National Office of Statistics, Halifax claim that the typical cost of purchasing a three bedroom house in December 2011 was £600, which is £116 less than the finances involved for renting an identical property.

Ultimately, that works out to be a 16% saving and a significant change to a previous survey carried out in 2008 which claimed that the costs involved for buying a home worked out to be 29% more expensive than renting.

“The affordability gains for buyers relative to renters in the last three years have been significant,” said Martin Ellis, housing economist at Halifax.

“The average mortgage payment has fallen dramatically over recent years as a result of falling house prices and mortgage rates. At the same time, rents have risen due to strong demand for rented accommodation.”

The findings also arrive after a claim from the Association of Letting Agents that the rental market is showing clear signs of softening and that demand for the type of three bedroom property used in the survey is on the decline.

The figures are indeed significant but as the property market has already indicated, this promises to be a volatile and uncertain period in terms of mortgage rates and the ability to arrange a home loan. In addition, economic uncertainty and the difficulty in raising a substantial deposit are likely to see very few renters change their current position in the light of these statistics.

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