Why rent when you can buy?

Stepping onto the property ladder is a huge milestone and is a great way to invest in your future. Your monthly mortgage payments would be an investment in your biggest asset, with property prices having historically risen in the long term.

Research from the Halifax

New research, conducted by Halifax in 2021, shows the cost difference between renting and buying. The research suggests that owning your own home will save you money and is nearly £1,400 a year cheaper than renting.

What caused the gap between owning and renting?

In 2021, mortgage rates dropped to a historic low which caused a significant shift in the gap between owning a home and renting. Lenders took advantage of a recovering economy post-pandemic and the Bank of England's base rate stood at just 0.1%

As mortgage rates and the cost of borrowing fell, the cost of renting continued to rise due to an increasing gap between supply and demand. Whichconducted a survey comprising of 2,003 renters between February and March 2022. The survey found that:

Lack of supply

The lack of supply left many tenants priced out, this led to renters offering above the asking rent to secure a property.

Renting: The Data

Historically, stepping onto the property ladder was considered challenging due to the substantial deposits that were required upfront, which meant many people turned to renting as it was more affordable.

However, the latest Rental Index data (May 2022) suggests:

The average rent in the UK stands at £1,103 per calendar month (PCM). This is 10.6% higher than this time last year
London average monthly price has increased to £1,832 PCM
Excluding London, the average price of rent in the UK (£928 PCM) is 8.7% higher than this time last year, and is 0.9% higher than it was in April
Prices in the South West have risen to £1,051 PCM which is an increase of 11.5% since this time last year

What about a mortgage?

As the rate of inflation can increase and decrease, The Bank of England will adjust mortgage base rates accordingly. Although mortgage rates are increasing from a historic low base, there are deals still available – regardless of the size of your deposit. Taylor Wimpey is not authorised by the Financial Conduct Authority and therefore cannot provide any advice in relation to mortgages. If you would like more information on this, we suggest that you seek the advice of a Mortgage Broker to discuss your options.

Learn more

The help to buy scheme is still available to use until the end of this year. The scheme was intended to help first-time buyers get onto the property ladder.