Renting Could Cost More Than A Loan
There has been a dramatic increase in the number of people who are wanting to rent property over the course of the past couple of years, largely due to the lack of availability of finance through home owner loans and mortgages and uncertainty over the future of the housing market.
This increasing demand for rental property has inevitably pushed up the cost of renting a house throughout the course of this year and November was no exception, with the average cost of rent increasing yet again.
According to a survey, conducted by LSL property index, rents in the UK typically increased by 0.1 per cent during the month of November, which means that rents have now been increasing for around ten consecutive months.
Although typical rents can vary significantly across different regions, the survey found that the average rent in the UK now stands at £692 per month for a rental property. With loan rates currently at their lowest level ever, it could actually work out cheaper for many individuals who are renting property to be paying a home owner loan and buy a property instead.
However, the problem for many would be buyers is still that of raising a sufficiently large deposit to meet lenders maximum loan to value criteria and then being accepted for a home owner loan or mortgage under the new, much tighter loan approval rules.
Although a lack of loan availability is one of the biggest reasons for not buying a house, many potential home owners are reluctant to buy in the current economic conditions and, understandably do not want to commit to having to make regular home owner loan repayments with the possibility of job losses looming.
An official from LSL commented that although the rate of rental increases was slowing, there was still a distinct shortage of rental property available on the market and therefore rents are likely to continue to increase into next year.
