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Buy Or Rent? Where In The UK It’s Cheaper To Buy A Home

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There comes a time when the dilemma of buying or renting is most apparent in most people’s lives. So why is it challenging to know when to buy a home? Well, there is no shortage of content online that’s contradictory, so understandably, there is a lot of indecision when it comes to committing to homeownership.

You may have heard property experts say it’s always a great time to buy or timing is everything. So which is it? One or the other, both or neither! You’re not alone if you’re confused about what action to take.

Indecision is probably the main reason prospective first-home buyers are still renting.  There may also be another property around the corner, so what’s the rush?

Indecision or Procrastination

Are you struggling with the commitment to buy a property? Not everyone wants to be a homeowner. There is no right or wrong reason for your decision to rent or buy. Many prospective first-home buyers struggle with commitment to the sales transaction. Once they sign the sales agreement, there’s no going back.

However, when you’re in control of the agreement, i.e., you have added clauses that protect your interests, such as conditional on obtaining finance or a satisfactory building inspection, commitment to purchasing a property is less stressful. The control is with you.

There may be other reasons for failing to commit to buying a home.  Your friends are not homeowners, or you’re unsure if the property is in the correct location.

Location

Location is the main priority for homebuyers. When renting, you can choose the exact location you want to live in, whereas when purchasing a property, the location depends on affordability. For example, renting in Chelsea, London is doable; however, buying in Chelsea is out of the question unless you have a considerable deposit (down payment) or a very high income.

While buying a property is more cost-effective than renting, location plays a huge role in affordability over the long term.

You can neither buy nor rent in some locations, including many parts of London. For example, you will struggle to find affordable rental accommodation or a property to purchase in parts of Ealing, Shepherds Bush Palmers Green or Enfield. South of the river is even more complicated. Moving out to Woking or Croydon offers better options.

Areas That are less costly to buy than rent.

Apart from Scotland and Wales, every local authority in the northwest and northeast of England has properties that are less costly to buy than rent.

London the anomaly

London is the only place in the UK where the cost of renting a property is lower than buying one, and the weekly rent rate is lower than in other cities.

Buy In The NorthNorthNorth has lucrative and affordable housing prices and markets.

The northern part of England has properties cheaper to buy than rent, especially its north-western and eastern parts, making the region an excellent place for investors and homeowners.

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Leeds

Areas such as Leads have a 20% rate difference between renting and buying a property, as renting a property here is close to £623 while purchasing one is £498.

Midland’s High Demand

With a 22.7% rate between the rental and property purchase costs, Birmingham’s demand to buy property has soared high. The area’s average purchase cost is £512, while renting is £663.

Manchester & Liverpool

Manchester also has a whopping 28.4% percentage difference between the cost of buying and renting a property. And the area with an enormous difference between renting and buying a property is Liverpool which currently stands at 40.6%. North’srth’s property markets are the lowest in the UK and provide many investment opportunities. What may work best for prospective homeowners struggling with indecision is choosing the rent and buying.

No Need To Compromise

Getting onto the property market can be achieved without compromising your lifestyle. If where you live is non-negotiable, i.e. location, choose to rent but buy an affordable home in an area favourable to homeownership. InNorthnorth, you can buy and rent out your first home. There is no rule that you must live in the property you purchase. 🙂

Later on, when property prices have gone up, and there is more equity in your rental, you can make another decision to get into your own home. Do you sell the rental property and use the profit for a deposit on your house in your desired location?

Or do you keep the rental property and leverage the equity for the deposit on your home? If you’re asking yourself these questions, you’re in a good position and thankful you decided to buy your first home when you did.

It’s hard to argue against either line of thought about homeownership – i.e., timing is everything, but you create the timing through knowledge and knowing how to minimise the risk, which always makes it a good time to buy.

Are you considering buying off-plans? See our article here.