Halifax think it is. Their Buying vs Renting Review released last month claimed that average monthly costs associated with buying a 3 bedroom house were 18% lower if buying the property rather than renting, although behind this headline-grabbing figure they showed that in most UK regions it was more like a 7% gap.
Halifax say these figures are representative and adjusted to include repair, maintenance and insurance but Alan Ward of the Residential Landlord’s Association isn’t so sure. In a statement today he said he believes that the weighted averages used provide an “unrealistic comparison” and therefore make buying look cheaper than it really is for the purposes of the Halifax review.
Whoever is right, for a lot of people the decision of whether to rent or buy isn’t based on monthly costs alone. The need to raise a hefty sum as a deposit when buying, as well as the lack of flexibility a mortgage brings are enough to put off large numbers of would-be buyers in the current climate. Halifax recognised this in their survey which found that 58% of respondents mentioned the difficulty in raising a deposit as one of their main barriers to buying.
Unfortunately Halifax’s study only looks at monthly averages, and neither party has commented on the other various upfront costs of buying and letting. Things like solicitors’ fees, surveyors’ fees, stamp duty and mortgage arrangement fees can add thousands to the cost of moving when buying, on top of the deposit amount.
Moving into rental accommodation isn’t always cheap either – the Guardian found last year that letting agent fees can run up to several hundred pounds per tenant. Shelter are currently campaigning on this issue, highlighting in particular the fact that the fees are often unexpected when beginning the transaction, and seemingly disproportionate to the work performed.
On OpenRent, all our landlords agree to advertise their properties with no admin fees, and referencing costs just £20 per tenant should the landlord require it. We’re working hard to make the rental market a fairer, safer place for tenants – and at the same time offer landlords a listing on all the major portals, tenant referencing, digital contracts and deposit protection all for free on their first listing!
Take a look now to see what all the fuss is about!