First-Time Buyers in UK Cities Find Homeownership Cheaper Than Renting
First-time buyers in many UK cities are finding it more cost-effective to purchase a home rather than rent, according to recent analysis. This trend is driven by the current housing market conditions and changes in mortgage rates.
In nine out of Britain's 11 largest cities, buying a home is cheaper on a monthly basis than renting. This is based on a five-year fixed mortgage with an interest rate of 4.78 per cent and a 5 per cent deposit. Glasgow leads the way, with mortgage payments nearly a third cheaper than rent, saving £396 per month or £4,752 per year. Newcastle ranks second, with savings of £217 per month or £2,604 per year. In cities like Nottingham, Leeds, Liverpool, and Birmingham, buyers save between £30 and £100 per month on average.
The average rent across the country was £1,577 per month in September, according to Rightmove. Bristol had the most expensive property prices on the list, with first-time buyers paying £311,000 for their property. However, owning a home in Bristol would significantly cut their monthly housing costs. On average, someone would save 17 per cent on their monthly housing bill as a homeowner in a typical starter property, even with a 5 per cent deposit and the most expensive mortgage rates.
While buying a home can be a significant investment, the current market conditions and mortgage rates make it a more affordable option than renting in many UK cities. However, it's important for first-time buyers to consider all factors, including deposit requirements and long-term financial goals, before making a decision.
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