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WHY RENT WHEN YOU CAN BUY?

WHY RENT WHEN YOU CAN BUY?

If you’ve always dreamt of owning your own home, you could find that taking those first steps onto the property ladder are more affordable than you think.

New figures compiled by Strata show that buying a home is often cheaper than renting, especially with the government’s Help to Buy scheme. 

Using data from Zoopla, we’ve compared the price of renting a two bedroom home against buying, both with and without a Help to Buy equity loan. 

This is where you only need a 5% deposit for your new home, which the government will boost by a further 20%. You’ll only need a mortgage on 75% of the property price, making it an affordable alternative to renting.

A closer look at the figures

The results might surprise you, as buying is more affordable than renting across many of the country’s major towns and cities – especially in the north of England.

Take buying a new home in Leeds as an example. Our research shows the average cost of renting a two bedroom home in the city is £679, but you’d typically pay £612 a month towards paying off a mortgage. With a Help to Buy equity loan, you could be paying as little as £510 per month.

It’s a similar situation in Doncaster, where you would pay around £496 a month in rent, compared to £449 making home loan repayments. With Help to Buy, this figure reduces even further to £374.

Meanwhile, it costs around £51 more to rent a home in Hull than it does to have a mortgage on a home of your own. If you use Help to Buy, the gap increases even further to £115.

For more information on the cost of renting and buying, take a look at our interactive map.

The benefits of owning your home

Many people choose to buy their own home because it offers financial security. The value of your home should increase over time, building up equity you can use later in life. The only expenses once you’ve paid off your mortgage will be insurance, utilities and general maintenance.

There’s also the added benefit of being able to personalise your home without having to ask permission from your landlord. This is particularly the case in new homes, which are a blank canvas that you can really make your own.

Strata’s sales director Gemma Smith says: “We have many developments across the north of England and the Midlands that offer an affordable alternative to renting. 

“If you’ve got your sights set on buying a new home, look at the facts and figures to see exactly where your money is going, and whether it would be better put to paying off your own mortgage. With schemes such as Help to Buy, getting onto the property ladder has never been easier.”

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