Buying more affordable than renting later this year - claim

A mortgage expert says buying will become more affordable than renting by the end of 2023.

Recent research by business consultancy Capital Economics claimed that renting a property in the United Kingdom is now more affordable than getting a new mortgage to purchase one for the first time in 14 years.

This is because average monthly mortgage payments have risen to above £1,000 for the first time as a result of interest rate rises. 

However, Kellie Steed - mortgage expert at comparative service Uswitch - says this situation will reverse by the end of 2023. 

"Although renting is usually less expensive than a mortgage in the short term, owning a property has several advantages to renting. You have an asset that can be passed on when you die, you can rent out your home or spare room and you have greater freedom to own pets, change fittings or remodel. 

“Arguably most importantly, however, is that as you continue to pay down the mortgage, you build equity, enabling you to sell the house for a profit or obtain another loan or mortgage. Furthermore, your monthly expenses will steadily decrease until you have paid off your mortgage and can live in your house for free.

“There are some disadvantages to owning a house as well, such as your equity can decrease if the housing market crashes, leaving you with less than what you paid for the house.

“When compared to renting, there are more up-front costs needed to apply for a mortgage and complete the home-buying process. Also, there is greater responsibility for home upkeep and repairs, which may result in higher costs if you need to make adjustments.

“Nevertheless, in general, buying a house is a more cost-effective and sensible choice than renting in the long term, although it may also depend on your financial situation”. 

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