Mortgages continues to work out cheaper than renting.
Those with mortgages have found their monthly house-hold expenses lower compared to those renting. Typical rents have been pushed up as those who cannot afford to buy have been left trapped in the rental system. Research by the Halifax found that home-owners recently taking out a mortgage, pay on average £600 per month for three bedroom properties which is over £100 cheaper than average monthly rents on similar properties.
Wales is the one of the few places where renting still works out cheaper than purchasing a house, as mortgages on average cost around £5 more a month than rent. Buying a house is the most affordable when compared to renting a house in London, where average borrowers tend to pay around 10 per cent a month less than the average private rental tenant. These figures show that there has been a significant turn around since 2008, as at that time the average lending costs involved in buying a house was around to 30 per cent higher than the typical monthly rent.
Halifax advise that the historically low base rate has allowed lenders to offer some of the best ever rates while at the same time house prices have experienced a drop by around 11 per cent. However, buyers who are still faced with the challenge of raising a decent deposit are still likely to experience tough times in attempting to raise a mortgage in 2012. While more mortgages are expected to be available in 2012, lenders are predicted to tighten lending criteria because of the weak economy and so being accepted for a deal will become far more difficult.
