A new report suggests it’s cheaper to buy than to rent in 80% of British cities and towns. Meanwhile, my experience is a powerful reminder of why many tenants climb aboard the property ladder as soon as they are able.
I’m nowhere near putting my first foot on the property ladder. In fact, the first rung seems so far off that I feel like a modern Jack – stood at the bottom of an estate agent-branded beanstalk that stretches far up into the clouds.
Like many other people my age, I’m a renter. And, sadly, the use of fairytale metaphors is wildly inappropriate when it comes to my life as a tenant.
Is buying cheaper than renting?
According to a new report by property website Zoopla, it’s currently cheaper to buy a two-bedroom flat than to rent one in 80% of the UK’s towns and cities. The research shows that rent on a two-bed place is typically almost 10% more expensive than a mortgage.
Zoopla’s research has come in for criticism. Firstly, you need to be able to scrape together a deposit before you can buy your own home – then there’ll be mortgage fees, solicitors’ charges and possibly stamp duty to contend with.
Plus, Zoopla’s calculations are based on the assumption that buyers have interest-only mortgages at interest rates of 5%. This won’t be the case for many people – and as soon as the base rate rises, we will see the cost of property ownership increase.
Yet it’s depressing to think that renters like me, who are trying to build up the savings they need for a deposit, are in some cases shelling out more per month than those already on the property ladder.
And with mortgage finance still constricted thanks to the credit crunch, there is next to no chance of me getting a home loan until I have tens of thousands of pounds to put down up-front.
Anxiety and insecurity
And what about the practical disadvantages of being a renter? You could argue that people like me pay a premium for having someone else take responsibility for the maintenance of their home – but in my experience this doesn’t ring true.
In the past two years I’ve spent time living with a broken fridge, a busted washing machine, doors falling off their hinges and a toilet that doesn’t flush. I’ve paid my rent in full and on time every month, yet have been made to feel like a glorified squatter each time I’ve asked for a broken item to be repaired.
Earlier this week, my landlady confirmed that she wants my fiancé and me to move out of our home as she’s decided to sell it. Our tenancy agreement is legally binding until mid-2011, so we’ve managed to negotiate a cash settlement for its early termination – but to say this has been stressful and difficult would be an understatement.
It’s this lack of service and insecurity of tenure that puts fire in the belly of renters like me – spurring them on to save and become buyers at the earliest possible opportunity.
So yes, we Brits are obsessed with property. But until the private rental market offers people better protection and value, people like me will continue to dream of escaping it – however far away that fairytale ending might seem.
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