It's Cheaper To Rent Than Buy A Home

Buyers Taking On Too Much Debt A campaign group has suggested that it would be better for some would be buyers to continue to rent in order to raise a bigger deposit to put towards the purchase of their new home.

PricedOut said that many buyers are taking out a loan with a Help To Buy Mortgage where the rates are not competitive. The second part of the Help To Scheme which was brought forward by three months to October.

There are concerns that buyers are taking on unaffordable amounts of debt because they are desperate to get onto the housing ladder. Priced out said that it’s analysis showed that some buyers would be better off staying in rented accommodation and saving a larger deposit to access a better mortgage rate.

Cheaper To Rent A Home In London

n London a loan of 95% of 4.99% cost £1430 per month which is based on the typical average for a first tome home of £256,000.. This compared to average rents of £1,141. Concern is growing amongst many experts that prices in London are now out of control and that buyers are taking on too much debt.

The problem will come when rates start to rise as they inevitably will do as some time in the future. Borrowers are already stretched with rates at record low levels and will struggle to repay their debts when rates go up.

There are concerns that borrowers feel that they are being forced to take out mortgages in order to take advantage of the Help To Buy Scheme and not be left behind as house prices increase.

Many commentators also suggest that the government is showering us with debt which is pushing house price up. Instead they should be aiming to bring prices down by building more affordable homes.