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Article Title: Owning versus renting; is there a choice?
Author: Andrew Regan
Category: Finance RSS
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Owning versus renting; is there a choice? <br> Article By: Andrew Regan <br><br> <p> For many years renting a home proved more expensive than buying your own property, but since the UK entered the era of rapidly rising house prices it appears that people who rent are now actually better off than those who buy. <br><br> Of course, that's not taking account of any capital appreciation in the owned property, but merely looking at the day-to-day costs of living. For example, in many areas people are simply unable to afford to buy but they can still live in that part of the country if they choose to rent a property. <br><br> Professor Steve Wilcox of York University recently carried out an analysis of renting versus buying. He found that whilst house prices had tripled since 1994, private rents had only gone up in line with earnings meaning that the cost of renting had fallen in relative terms when compared to the cost of buying. <br><br> Over the past decade the impact of the buy-to-let phenomenon is one reason why rents have been kept relatively low, as there is now a huge supply of rented properties. In addition, the report also found that half of all people now moving choose to rent as opposed to buying. Indeed, in many areas tenants are better off financially than those who own their own homes and it is now becoming a lifestyle choice. <br><br> On the whole tenants pay in rent only slightly more over a 25 year period compared to those who buy their own property. But, Abbey's head of mortgages Nici Audhlum-Gardiner is keen to point out that someone paying 25 years of rent will not have a paid-for asset, unlike someone who has spent 25 years paying off their mortgage. <br><br> That is a blindingly obvious statement to many but cold comfort to those first time buyers are unable to get on the property ladder, and simply don't have a choice whether to rent or buy. The ratio of house prices to income has nearly doubled in the past decade and is now far higher than it was in the last boom of 1990. An average house in Britain now costs five times more than the annual income of the buyer. <br><br> In addition to the cost of the property other associated costs such as stamp duty and professional fees are off-putting to would-be buyers. <br><br> But, even if potential buyers can afford the deposit, fees and stamp duty they may be stymied at the last hurdle and be unable to successfully obtain a mortgage. As Duncan Berry, sales director at GE Money points out, many mortgage brokers are having problems trying to place new mortgage business as products have been withdrawn and lending criteria tightened. <br><br> So, it is no wonder that many would-be buyers are renting and not even bothering to <a href="http://www.moneynet.co.uk/mortgages/remortgage/index.shtml">compare mortgages</a> as they know that the likely outcome of any application will be refusal and disappointment. Many lenders are refusing a loan on the applicant's credit rating whilst others have reduced the range they offer. For these people renting is the only sensible solution until the climate settles. <br><br> At least they can rent in an area of their choice and afford to live in relative comfort. </p> <br><br> Original Article URL: <a href='http://www.myfreearticlecentral.com/Article_6930_Owning-versus-renting-is-there-a-choice.aspx'>Owning versus renting; is there a choice?</a> <br><br> Andrew Regan is an online, freelance author from Scotland. He is a keen rugby player and enjoys travelling. <br><br>



Plain Text Version:
Owning versus renting; is there a choice? Article By: Andrew Regan For many years renting a home proved more expensive than buying your own property, but since the UK entered the era of rapidly rising house prices it appears that people who rent are now actually better off than those who buy. Of course, that's not taking account of any capital appreciation in the owned property, but merely looking at the day-to-day costs of living. For example, in many areas people are simply unable to afford to buy but they can still live in that part of the country if they choose to rent a property. Professor Steve Wilcox of York University recently carried out an analysis of renting versus buying. He found that whilst house prices had tripled since 1994, private rents had only gone up in line with earnings meaning that the cost of renting had fallen in relative terms when compared to the cost of buying. Over the past decade the impact of the buy-to-let phenomenon is one reason why rents have been kept relatively low, as there is now a huge supply of rented properties. In addition, the report also found that half of all people now moving choose to rent as opposed to buying. Indeed, in many areas tenants are better off financially than those who own their own homes and it is now becoming a lifestyle choice. On the whole tenants pay in rent only slightly more over a 25 year period compared to those who buy their own property. But, Abbey's head of mortgages Nici Audhlum-Gardiner is keen to point out that someone paying 25 years of rent will not have a paid-for asset, unlike someone who has spent 25 years paying off their mortgage. That is a blindingly obvious statement to many but cold comfort to those first time buyers are unable to get on the property ladder, and simply don't have a choice whether to rent or buy. The ratio of house prices to income has nearly doubled in the past decade and is now far higher than it was in the last boom of 1990. An average house in Britain now costs five times more than the annual income of the buyer. In addition to the cost of the property other associated costs such as stamp duty and professional fees are off-putting to would-be buyers. But, even if potential buyers can afford the deposit, fees and stamp duty they may be stymied at the last hurdle and be unable to successfully obtain a mortgage. As Duncan Berry, sales director at GE Money points out, many mortgage brokers are having problems trying to place new mortgage business as products have been withdrawn and lending criteria tightened. So, it is no wonder that many would-be buyers are renting and not even bothering to compare mortgages [http://www.moneynet.co.uk/mortgages/remortgage/index.shtml] as they know that the likely outcome of any application will be refusal and disappointment. Many lenders are refusing a loan on the applicant's credit rating whilst others have reduced the range they offer. For these people renting is the only sensible solution until the climate settles. At least they can rent in an area of their choice and afford to live in relative comfort. Original Article URL: http://www.myfreearticlecentral.com/Article_6930_Owning-versus-renting-is-there-a-choice.aspx Andrew Regan is an online, freelance author from Scotland. He is a keen rugby player and enjoys travelling.

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