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Given the current economic state this country and others are currently experiencing, the housing market is showing no signs of improvement. First-time buyers are finding it harder and harder to save up their much needed deposit in order to attain a mortgage, and so are turning to long-term renting instead.
Many people are under the impression that renting can be far cheaper than buying, but is this really the case? Before taking the plunge, you may want to consider your options carefully before signing any contracts…
Buying is Cheaper
The rent rates have been ever growing around the country in recent years, while mortgage rates have actually dropped, meaning that it is much cheaper in the long run to own a house rather than rent. In fact, Halifax has suggested the average person could save up to 16% through buying rather than renting, which is a significant amount.
According to a report by the BBC, it’s even a better option for those living in the notoriously expensive regions in London: one case study found that those living in a house share could be paying around the same amount a month in order to own a house as they were currently paying for rent.
Make it Personal
Of course, these figures can vary wildly from person to person. While 16% is the average saving, some could save even more, whilst others may be in a much better position by renting.
There are ways to figure out what would be best for you in just a few easy steps.
The first, and perhaps most obvious, thing to figure out is how much you could be saving with both methods. Using comparison sites will show you how much it would cost to rent the kind of house you’re looking for in a specific area, as well as how much it would cost to buy.
Once you’ve figured out how much it would cost to buy, you must study your savings carefully. You’ll need at least a 10% deposit, if not more, in order to purchase the house with a mortgage, so look at how much you currently have saved, and figure out how long it’ll take you to save up the rest if needed.
Finally, you’ll need to see the kind of mortgages which are available for the value you need, as well as calculating the rest of the costs involved in buying a house.
For buyers guides or to find more information and advice you may need when looking to move to a new home there are resources on the internet. I would strongly advise not to sign any contracts unless you are sure about what you are doing or have spoken to a financial advisor.