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When the recession hit in 2007, the UK housing market crashed in spectacular fashion. Tens of thousands of pounds were wiped off the value of properties all over the country and people who had bought at the height of the boom, were left in the unfavourable position of owning a property worth less than their outstanding mortgage.
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Private Rental Sector is Booming
In the last couple of years, the housing market has started to recover and in some parts of the UK there is a serious shortage of affordable properties for first time buyers which, combined with tough lending rules, has led to a boom in the private rental sector.
Thanks to demand, rental prices have been rising fast across many areas of the UK, most notably London and the southeast. A lot of younger people have found themselves priced out of the housing market and forced into renting a home instead. Interestingly, though, data released by one of the UK’s biggest lenders has revealed that the average monthly cost of buying a home is 8% lower than it would be to rent the same property.
Cheaper to Buy a Home
Halifax data shows that the average monthly cost to a first time buyer of buying a three-bed property was £666, whereas rent for the same property would have been £722. Prices at the cheaper end of the property market have risen by 8% in the last twelve months, so the gap between renting and buying is narrowing.
