Mortgage Payments Cheaper Than Renting

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Leading mortgage lender Halifax revealed this week that the cost of monthly mortgage repayments is on average over £100 cheaper than renting an equivalent property in England and Wales. The lender published research showing that in December last year the average monthly cost of a mortgage for a three bedroom house was £600, whereas to rent the same property would cost £716 a hefty 16 per cent mark-up. The figures are a stark contrast to the situation in 2008, when the average cost of repaying a mortgage was around 29 per cent more expensive than renting an equivalent property. Back then, it cost some £928 for a monthly mortgage repayment, compared to an average monthly rent of £721. Halifax pointed out that the figures show how British consumers are currently giving over less of their monthly income to mortgage payments than in previous years. In 2008 around 47 per cent of a monthly income would go on mortgages, whereas now the figure has fallen to around 29 per cent. Apart from some parts of Wales, buying a home rather than renting it was shown to be less expensive in December 2011, compared to December 2008, when all regions of England and Wales revealed their rented property sectors were cheaper than buying an equivalent property. Halifax said that there had been a number of factors which had made mortgages better value than renting, such as the drop in average mortgage rates and the soaring cost of renting since 2009. But the group’s housing economist Martin Ellis said that there were still challenges facing potential mortgage-holders. “Despite the improvement in the relative affordability of buying a home, the number of purchasers has continued to fall due to the ongoing challenges in raising a deposit and the considerable uncertainty over the prospects for the UK economy, which have severely constrained housing demand,” he said.