Dynamic London economy helps aspiring first time buyers realise savings
- 7th May 2021
- Buying Property News
First-time buyers in London are on average £4,606 better off each year than renters. Buyers across UK save on average £824
First-time buyers in London are on average £4,606 better off each year than renters, shows a new study. Buyers across the UK save on average £824 per year compared to renters.
Halifax’s Buying vs Renting Review uses mortgage associated costs on a three-bedroom property and compares this to the average monthly rent of the same type of property. Buying costs include: mortgage payments; spending on household maintenance and repair and insurance costs as well as income lost by funding a deposit rather than going to savings.
While record low interest rates, the extended Stamp Duty holiday and the Help to Buy programme have all been regarded as boosting first time buyer rates, in London there are also numerous other factors at play.
London’s economy is perhaps the most diversified and resilient across the UK. While the capital is commonly associated with traditional professions such as financial and legal services, the rise in technology, fintech, and marketing has seen the city expand its workforce, attracting skilled professionals from all over the world.
Both London’s traditional businesses and the new industries have been quick to adapt to new ways of working. The rise of home working and hybrid working has encouraged aspiring renters to put down firm roots in the capital.
Stephen Ludlow, Chairman at ludlowthompson, says, “It is unsurprising to see that London is the area recording the biggest savings for first time buyers, considering mortgage rates on purchases are at a record low.”
“For most people whilst they save up for a deposit, new initiatives such as the Government backed 95% mortgages will help many members of Generation Rent get on the property ladder and benefit from these savings.”
“Others, have been fortunate enough to have their parent’s financial backing, with the so-called ‘Bank of Mum and Dad’ having supported 1 in 5 purchases in 2020.”
“Many first time buyers are also benefitting from the extended Stamp Duty holiday, which has enabled them to make substantial savings which can go towards a deposit on a property.”
“Whilst renting is often seen as a necessity, it will remain a preference for a large section of the population that value flexibility.”
Despite the savings that can be made by buying, renting does has some substantial attractions for young professionals. For example, it allows them the flexibility to live in different parts of London before deciding which area to settle and purchase a property in.
If you're interested in buying or renting in the capital, start your search for a property by clicking here.
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It is unsurprising to see that London is the area recording the biggest savings for first time buyers, considering mortgage rates on purchases are at a record low
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