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Cheaper to buy than rent in over a third of cities in the UK
It is cheaper to buy than rent in more than a third of cities in the UK with buying most effective in the north of the country, new research shows. Mortgage payments are less expensive than monthly rent in 36% of British cities and home owners in Glasgow are more than £100 per month better off than their renting counterparts. However, in the south renting still beats buying, with buyers in London, Reading and Cambridge forking out hundreds more to own property there, according to the research from property search firm Zoopla. But overall the analysis of the cost of renting a two bedroom home compared to servicing a mortgage shows that nationwide, renters still pay £58 less per month than buyers. Buyers did particularly well compared to their renting counterparts in Scotland and the North of England. In Glasgow, rental payments amount to an average of £596 per month, whereas monthly mortgage payments only totaled £447. This means Glaswegian buyers are paying 25% or £149 a month less to own property than rent it. The research also shows that in Hull, buyers who pay on average £397 a month are £55 better off than renters in the city who pay an average of £452 per month to rent. Conversely, the south eastern corner of the UK represents the best value for money for renters. The average London tenant pays rent of £2,218 per month, whereas the capital’s home owners pay an average of £3,302 on servicing their mortgages, meaning buyers there are paying 49% or £1,084 a month more than the city’s renters. Buyers in Reading and Cambridge can also expect to pay more. On average, owners in Reading typically pay £3,600 a year more than tenants, while servicing a mortgage in Cambridge costs £3,700 more a year on average. Nationwide, the current average asking rent for a two bedroom home is £666 per month, compared to an average asking price of £145,840. As a result, servicing a 90% LTV mortgage typically costs £58 more per month than the average tenant would pay for renting such a property. Aside from the initial deposit, and all the fees associated with the actual house purchase, the financial strain of buying can be overstated. In addition to the peace of mind that home buying brings, many owners enjoy more disposable income at the end of every month than their renting counterparts, said Lawrence Hall of Zoopla. ‘If they can make the leap, and are willing to relinquish the flexibility that comes with renting, tenants up north in particular would be much better off buying and paying off a mortgage every month,’ he explained. He pointed out that Scotland and the North of England are cementing their standing as international university hubs with top universities in York, Edinburgh and Durham. ‘This means increasingly high numbers of students are flock to these areas, all looking for places to stay and… Continue reading
Councils must provide plan for new home building in UK, says landmark housing bill
Councils in the UK must produce local plans for new homes in their area by 2017 or the government will ensure, in consultation with local people, that plans are produced for them. Under a new Housing and Planning Bill the government sets out its ambition that one million homes will be delivered by 2020, including starter homes for first time buyers. However, while 82% of councils have published local plans which should set out how many homes they plan to deliver over a set period only 65% have fully adopted them, and there are still almost 20% of councils that do not have an up to date plan at all. The Prime Minister David Cameron has now made it clear that he expects all councils to create and deliver local plans by the deadline. The Bill also spells out a series of further proposals to boost home building and home ownership. This includes a new legal duty on councils to guarantee the delivery of Starter Homes on all reasonably sized new development sites, and to promote the scheme to first time buyers in their area. The government also announced that local authorities will be able to bid for a share of a £10 million Starter Homes fund, part of a £36 million package to accelerate the delivery of starter homes by helping councils prepare brownfield sites that would otherwise not be built for starter homes. Under the new legislation there will be automatic planning permission in principle on brownfield sites to build as many homes as possible while protecting the green belt and other planning reforms to support small builders such as placing a new duty on councils to help allocate land to people who want to build their own home. In other boosts for house building, Cameron also announced that a temporary rule introduced in May 2013 allowing people to convert disused offices into homes without applying for planning permission will be made a permanent change after almost 4,000 conversions were given the go ahead between April 2014 to June this year. A new website has just been launched which allows prospective home owners to go online to www.ownyourhome.gov.uk to see what government schemes are available to open doors for them. ‘The government will do everything it can to help people buy a place of their own and at the heart of this is our ambition to build one million new homes by 2020. Many areas are doing this already but we need a national crusade to get homes built and everyone must play their part,’ said Cameron. He explained that councils have a key role to play in this by drawing up their own local plans for new homes by 2017. ‘If they fail to act, we’ll work with local people to produce a plan for them,’ he added. Officials pointed out that the latest announcement builds on the National Planning Policy Framework (NPPF) which was introduced in 2012 as a… Continue reading
Australian capital city rents see slowest annual growth ever
Weekly rental rates in Australian capital cities were unchanged in September but in the last three months have risen at their slowest annual pace ever. Indeed, the latest CoreLogic RP data report shows that the annual pace of rental growth across all capital cities is at a new record low of 0.5% in the year to September. Despite recording the strongest growth, Melbourne rents rose just 2.1% over the year and rents have fallen over the year in Perth and Darwin. They have increased by just 0.3% over the first three quarter of the year. Overall the combined capital city rental rates are recorded at $487 per week for houses and $462 per week for apartment units and the firm says that it is anticipated that the rate of rental growth will continue to slow over the coming months due to increased supply of housing and rental stock and slower migration rates. The report points to an ongoing softening of rental growth and explains that the construction boom across the capital cities coupled with slowing population growth, low mortgage rates and the heightened level of activity from investors are the major contributing factors to the slowing rental growth. Three of the cities which have seen the largest growth in new housing supply and investor activity over recent years; Sydney, Melbourne and Brisbane, have continued to record rental rises over the past year however, each city is seeing a slowing in the pace of rental growth. ‘It is clear that the increase in investment stock is providing landlords with little scope to lift rental rates while the low mortgage rate environment provides little incentive to push yields higher,’ the report says. Looking across the individual capital cities, over the past year, Sydney and Melbourne have recorded the greatest increases in weekly rents however, their rates of growth have slowed relative to a year ago. Over the past month, weekly rents have moved lower across every capital city except Sydney where they were unchanged and in Melbourne and Hobart where they rose. Continue reading
