October 2011 News

Economic climate favours first-time buyers

10th October 2011

New research shows that the average monthly cost associated with buying a two-bedroom flat for a first-time buyer is around £567. This is £110 lower than the typical rent paid on an equivalent property, according to Scott Cave of Barkers Estate and Letting Agents, which conducted the research.

The cost of getting onto the property ladder has fallen by 40 per cent since 2008 due to low mortgage rates and a depressed housing market. By contrast, the price of renting has fallen by a fraction of that amount and has even started rising again over the last year.

Mr Nicholas Humphreys Managing Director, said that the current economic climate is favourable for prospective first-time buyers.

“The recent decline in the cost of buying a property for first-time buyers compared to renting has been substantial. and reflects the drop in both mortgage rates and house prices since 2008 as well as a marked increase in the average rent paid over the last year,” said Mr Humphreys.

Mortgage rates have reduced dramatically over the last few years due to record low interest rates of 0.5 per cent. The average mortgage rate for a new borrower is 3.8 per cent, down from 5.9 per cent in mid-2008, according to Barkers Estate and Letting Agents. At the same time the average price of a typical first property has fallen by 14 per cent to £124,378.

Mr Humphreys view: There has been a lot in the press about home ownership reducing to 63% over next 10 years, these figures show what a great time to buy it is becoming.