Why it's cheaper to buy than to rent

Surely the mathematics is wrong becuase you have not factored in the income that the 25% deposit would have earned were it invested.

For example if the flat/house was £100,000, 25% deposit is £25,000.  Many articles from LoveMoney cite 3% interest, which is £750 pa or £62.50 per month. Re-visit the figures with this taken off and it is not such a rosy picture.  In fact the "saving" goes from £624 profit to a £125 loss per annum.

Buyers with a 25% deposit may well be better off buying than renting, ignoring any moves in the capital value of the house that they buy, which can fall as well as rise, and ignoring Watford Phil's valid contribution above.

However, this misses an important point: buyers with a 25% deposit are already quite well off! Christina's article underline this point: only people with 25% deposits are able to access the housing market.

So the paradox is this: now is a good time to be a first-time buyer, but only because now is such a difficult time to qualify to become one. That doesn't make for such a positive headline, though, now that Lovemoney's party line has inexplicably shifted to becoming housing market bulls.

By the way, anyone in Yorkshire and Humberside who wants to sell me a house for £77,390, please respond to this thread! I will be only to happy to buy your house. The figure rather stretches credulity to breaking point and beyond.

I agree with the above two posts. And realistically when I was a top 2% earner (and so was my ex - both in the the City as IT workers) we had to scrimp and save a big deposit to get a house and that was far out of London.

For anyone on typical salaries and no capital it is impossible. That is the real issue. If you have parents that can provide capital then ok. Otherwise forget saving up! We are seeing ever increasing differences between the haves and have nots and sky high "tulip mania" level house prices are not helping!

In the long term we are just short of housing. We need 16 floor condo blocks to be built in London. Use modular construction (they are great now) and use a national housebuilder owned (or heavily regulated) by the state as private builders only seem ineterested in high end apartments. I have lived in 4 Asian countries and they build proper cheap housing for all. It is affordable and regulated.

Take a look at Switzerland or Germany for example. They have sensible housing policies. We need a national housing policy. Not dodgy overpriced flats built on flood plains. That is the core of high rents and house prices. I find both economically well over the true going rate. Hence I intend to leave the UK perm as soon as I have got my new career established.....

And in the end the UK economy suffers as people poor capital into housing and NOT real investment. UK plc is in real trouble. I can't see anyone that wants to do anthing. Politicians want increasing house prices to get votes. So why deflate prices by increasing supply?

This article is based on a study by Abbey which postulates that it is now cheaper to buy than to rent. I wonder why, as a mortgage provider, they would take this position!!

The valid points made re interest receivable on the 25% investment, repair & redecoration / home maintenance etc costs borne by landlords tend to work against the conclusion of the study.

Furthermore, as mortgage interest rates will rise significantly in the future as circumstances return more towards normal economic circumstances, those buyers with long-term positions will see the costs of owning becoming much larger than the costs of rental positions.

Hurrah for renting! No-one has a god-given right to own a house. If you can't afford to buy - and why would you take on the millstone of a mortgage, plus all the maintenance costs and the uncertainty of variable interest rates anyway? - then there is no shame in renting, for the long-term if necessary. You get to live in someone's house with no responsibilities except keeping it tidy, and you help to support the important and valuable buy-to-let industry.

Nemo666 as usual criticises private housing developers and claims they build overpriced flats on flood plains. He's living in the past. No developers are building flats now, and new Environmental Agency rules make it near-impossible to build on flood plains. And the only reason any developers did build in such locations is because the UK's planning rules are so ludicrously tight and long-drawn-out, it was impossible to find any other building sites.

Everyone says new homes are too expensive, too small, and too crowded together. Everyone says developers are greedy. Yet the housebuilding industry on average makes lower profits than most businesses in this country, more on a par with manufacturing, and the houses have to be closely-packed because the Government has mandated those housing densities. The same goes for the price of housing: it's expensive because land is expensive, the planning process is expensive, the taxation is heavy (Section 106, VAT, new planning gain taxes, and then all your company taxes as well on any remaining profit) and construction is expensive and getting ever more so, as the Government forces housebuilders to build "carbon-free" houses. When Nemo666 actually sat down and worked out what it costs to build a new house in this country, even assuming one can find a small plot of land somewhere, he would quickly see that they are not over-priced: they just reflect the cost of doing business in a small, heavily-regulated country like Britain.

Sorry - obvious typo, should be '... so IS opportunity profit...'

The right time to buy a house is when you can afford it. So why did I buy a house in 1972? So I don't have to pay rent when I'm a pensioner!

I think young people today are being treat badly by the governmen with regard to mortgages.  The government promised lots more help for first time buyers 2 years ago, and I have seen no evidence of it.  What happened to the low cost council houses they were going to build. What happened to the housing authority part owned property.

I have five children,1 has recently got married and is living in a flat paying £450 per month.  They wouldn't pay that if they owned the same flat.  I am desperately worried about the rest of my children, and judging by statements made by the government, can only see the problem getting worse. Will my children ever own homes of their own?

Can anyone recommend a company who is now giving 100 per cent or 95 per cent mortgages please.

Can I have some houses [In Rentable Condition] at the Prices Quoted?

None Available?

Apart from derelict Mill Town Houses, There are NONE Here in Lancashire.