The Cost of Buying?
June 13th, 2016
Buying a home is now a fifth more expensive than renting one, says the Financial Times. Unlike some analyses, this takes into account the cost of the capital being repaid on the typical 25-year mortgage. And for ownership to be cheaper on a monthly payments basis, a buyer would need to put down a 39% deposit. Variations in regional prices are huge, though: in London, it is 44% more expensive to buy than rent while in Leeds the gap is only 10%. The FT agrees that paying off the mortgage means you own a steadily increasing share of the property, so your net wealth increases, but says affordabilty – the percentage of income being spent on housing – is the real constraint.