Renters Pay £2,268 More Than Homeowners A Year

In this month's edition, renters are paying over £2000 more than homeowners every year and we share the top reasons why people choose to move house.

Also this month, we share what you need to consider before buying a second home and we share some top tips for how to plan your moving day.

Renters Pay £2,268 More Than Homeowners A Year

While some may believe that renting is the cheaper choice for those on a budget or trying to save up enough money to buy a home, recent data has revealed that homeownership is actually the more affordable option.

New research from Santander analysed the average price of rent and mortgage payments in every region and found that no matter where you choose to buy a home, it will still cost less than renting.

Buying a home does, of course, require a large sum of cash just for the deposit, but once you’re actually on the property ladder, average mortgage payments stand at around &723.

This is no small amount of money, but in comparison to renting, you’d be saving yourself just under &200 a month (&189) as the average monthly rent in the UK is currently &912.

Although every region wouldn’t see savings in the hundreds, the region in which the gap between owning and renting is the narrowest is the East of England, only saving &43 a month by buying a home, but still saving money.

Renters in London have the most to gain by making the switch to homeownership, with rental rates at almost &300 more a month than mortgage payments in the capital.

These figures may come as a surprise to some, as in the past renting was always more financially feasible, however, since the economic crisis of 2008, interest rates took a fall while rental rates have consistently risen over the last decade.

The report found the average deposit for a home in the UK is currently &51,905 and discovered that many would try everything they can to get on the ladder, revealing that 38% of renters are considering moving in with their parents to save up for their deposit.

Managing Director at Santander UK - Miguel Sard - said: “Many first-time buyers understandably focus on the challenge of saving for a deposit and wonder how they will afford a property. However, it is often assumed that when you purchase a property you will be under greater financial pressure and our research shows the reverse is true.

Of course, buying a property is a major financial investment with upfront costs to consider, but long-term the financial benefits can be significant. With annual savings averaging well over &2,000, this can really mount up over time and of course, once the mortgage is paid off you have a valuable asset to show for it. Getting independent advice and looking for competitive rates, is crucial to get the right mortgage to meet potential homeowners individual needs.”

What Are The Top Reasons For Moving Home?

 

 

With the weather getting warmer, property market activity tends to see a rise, as many look to get the home move done and dusted before their holiday or before the kids have to go back to school.

Whether you’re looking to upgrade, downsize, start a family or start a new career, a new survey has found that we Brits move home for a wide variety of reasons, but which is most common? The AA looks to answer this question after conducting a study to discover the most popular reasons for a change in location.

The research found that the most common reason for packing all of our stuff into boxes is due to a change of job, with almost one in four respondents (23%) stating that they were moving to a location closer to their new role.

As expected, the area in which the home is located holds great importance for homeowners, with 12% simply wanting to freshen things up with a change of scenery and another 11% looking to leave their current area as they’re not overly keen on their surroundings.

Some of the other top reasons for moving home was the 10% that wanted to live closer to their family and the same amount of survey participants that were looking for a quieter life in the countryside.

Also making the list was the 7% that felt they’d be better off in a smaller home, the 4% moving because of marriage or divorce and a further 3% that believed they could turn a profit from the transaction.

The survey also found that depending on the age group there are some differences. The younger demographic (18-24) had a strong focus on their careers and affordability, while the 25-34-year-olds desired a larger home for family life. Those approaching retirement age (55+) were looking to fund their later years by downsizing, but also wanting to be as close to family as possible.

Director of Financial Services at AA – David Searle – commented “From a legacy of endless daytime TV shows, one can get the impression that buying and selling homes is just about making a quick profit on a property transaction. Our research puts this to rest as, beyond doubt, the reasons why and when people move are based on jobs, children, family connections and quality of life. A house is, after all, a home.”

Whilst decisions about when to move are not really about money, the realities of running a family home often are. Our survey shows many people are concerned about how far their pay packet will stretch and being smart in making their disposable income go further”.

Buying a Second Home: What to Consider

 

Whether it’s a little country escape, a place by the sea or even somewhere abroad, who wouldn’t love a home away from home?

Whilst this may be a lovely daydream, the reality of owning more than one property can be complicated, with several extra factors to consider before making your dream a reality. We’ve put together some facts you should consider before taking the leap into second home ownership.

Why do I need this property?

You will need to have a serious heart-to-heart with yourself and your other half about the purpose of buying your second property.

It is important to bear in mind that you will need to go through the stressful process of buying a home, with the added stress of the property not being in your local area, as well as furnishing and decorating the property, and the end result is you own a property you will probably only visit a handful of times each year.

There are other options available to you depending on what your needs are, for example, if you’re dreaming of a holiday home why not look into a timeshare? Or if you’re a professional looking for accommodation in the city, you could consider renting.

Location, location, location

The location of your property will affect every aspect of your ownership. Whilst it is lovely to have a home that’s 150 miles away from all of the day to day stress, that’s a 300-mile round trip every time you’re looking to visit.

If you are considering a holiday home and would like to act as a landlord when you aren’t occupying the property, then you will need to consider how you will keep tabs on the property when you are so far away. Little details like finding trustworthy tradesman become more complicated when you don’t know the area.

You should also consider whether you know the area you’re looking to buy in well enough before you finalise anything. For example, cheap property in the city might be in a student area. It’s worth doing some research before making the move.

The cost of running your second home

You will also need to consider the cost of running your second home. You will need home insurance, broadband, telephone, electricity, water and heating as well as paying the various taxes that come with owning property.

Whilst you won’t be paying the same rates (because you won’t be there all the time) however, certain bills (like the internet) will stay at the same rate no matter the amount of usage you get from the service.

You will also need to consider taking steps like keeping your heating on during the winter so that the pipes don’t freeze.

Mortgage

Second homes are not exempt from taxes like stamp duty and capital gains tax, which will add to the cost of purchasing your property. You will also have to decide whether to take a loan for your property or to remortgage your main home.

For any help or advice when it comes to property, speak to us. Our team would be more than happy to help you with the right information to get you started and can help you find a home to suit your needs.

Planning Your Moving Day 

 

Moving day doesn’t just happen magically! It can take months of planning and hard work for the day to go off without a hitch. Are you unsure of where to start? Take a look at our handy guide for moving home.

First, don’t forget about moving day!
Moving day should never be an afterthought. With mortgage payments, new insurance policies, estate and solicitor’s fees, it’s important that you don’t forget to incorporate the cost of moving day into your budget.

Prepare for the move
A month before your moving day, you should start shopping around for quotes from removal companies. You should also ensure the removal companies have insurance for furniture in transit, which will protect your personal items should they be damaged during the move. It’s also worth obtaining a cancellation policy in case the date for moving is suddenly changed at the last minute.

Declutter
This is a task that you can perform while you are still looking for a home. It's important that you get the whole family thinking about what they want to keep and what they would like to donate or throw away.

Then perform an inventory of what’s left
Be as organised as possible when packing up your possessions. Perform a full inventory of all the furniture and possessions that you plan to bring with you and tick them off the list as they’re packed.

Once you have all the boxes ready for the move, it’s a good idea to colour-code them so that you know which room in the new house they belong too.

Make sure the pets and kids are safe
With heavy boxes, moving vans and constantly open front doors, your children and pets are an additional stress that you don’t need.

If you have pets, we would advise that you send them to stay with friends, family or even a pet day-care whilst you move to your new home.

If you have young children, we would advise you also send them to stay with family, however, if they’re pre-teen or teenagers there’s nothing wrong with roping them into the move. An extra pair of hands will only help to get the job done quicker.

Sort out your new bills
You don’t want to spend the first few weeks in your new home sorting out the utilities! Make sure you set up your Direct Debits as far in advance as possible and take the time to do a little shopping around for the best possible deal.