Property in London cheaper to rent than to buy

To assess the availability of a particular type of housing in the UK, and accordingly, to understand the prospects of the real estate market, various companies are conducting research on the subject: what is more accessible is to rent an apartment or a house in the UK or buy it. Of course, when it comes to buying, refers to raising funds for mortgage lending, because obviously, to buy a property for cash is always more expensive than to rent it. However, this takes into account only the kind of mortgage when the mortgage is paid only the interest. The so-called “interest only” mortgage” . The mortgage when paid in full the entire loan (repayment), more expensive, and compare it with lease rates does not make sense.

And so, in their reviews we have already mentioned that in the whole of the UK while maintaining the above mentioned conditions it is more profitable to buy a property. Monthly payments on a mortgage will be significantly less than the monthly rental payments.

By contrast in London, where rental housing is much more affordable than to buy. The monthly rent the tenant is 10% less than the cost of payments for mortgage loans on comparable properties. The unprecedented increase in housing prices over the past year in London has done its job. This is the situation in 31 of 32 areas of London. A year ago, only 19 districts of London could boast of the cheapness of the lease.

Over the past year, since September 2012 the rent increased by 1.8% and this growth was primarily due to the growth in rental prices of real estate outside Central London. In the period from 4th quarter 2012 to 4th quarter 2013 especially risen in price for the purchase of areas of Ealing, Southwark, Lewisham and Greenwich.

This means that the average renter in these areas will pay on 16% less, or £4200 a year if he will rent, rather than if he will take the mortgage loans.

If the market for the sale of real estate in London is very much growing, fueled by investment from abroad, the market rent of residential property is heavily dependent on the General economic situation in the country and is restricted by tenants whose salary is almost not increased, and in some sectors even declined. At the same time, the demand for rented accommodation in London is still increasing. In the medium term the situation is unlikely to change. The Bank of England has not yet announced the change in rates. The number of construction of new housing is sorely not up to the demand. In such circumstances, it is unlikely that property prices in London will fall. Therefore, to live in rented housing will continue to be the most accessible to most working Londoners with average incomes.

® Alice Morgan. 19.11.2013 g.

Real estate investment in London. Dickens Yard

Battersea Reach

Canning Town