The London based estate agents, Douglas and Gordon, have decided to explore the best options for first time buyers in the capital. Deciding whether to rent or buy is a difficult choice that takes into consideration the financial, economical, and long-term aspects.
Whether you choose to rent or to buy needs to reflect what kind of lifestyle you have and what your long term goal is. If you need flexibility and are thinking about going abroad for a working experience, then renting is easier on your budget and will not give you the headaches of mortgage fees, big savings, stamp duty, and more.
If you are considering settling down in London, then you should know that actually, the gap between buying and renting has narrowed by £19 a month since 2016 due to the rise in house prices. Halifax data suggests that buying is financially better for first timers in the long run, as they can save up to £651 a year by buying rather than renting.
Property prices in the UK have risen by 5.4% compared to last year, with London’s average property price increasing from £472,718 in December 2016 to £483,568 in September 2017. Because of this, more and more people are opting to rent. With the prices increasing so rapidly and the average weekly earnings falling by 0.4% in the last year, first time homeowners can’t even afford to save enough for a deposit, which on an average is around £94,088. As a result, the age of first timers entering the UK property market in London is 32 years old.
Worldwide, a research by HSBC, which studied over 9,000 people in nine countries, revealed that 31% of millennials own their own home in the UK. The highest ranked country is China with 70%, followed by Mexico with 46%, and France with 41%.