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Homes now cheaper to rent than buy for the first time since 2014

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It has become cheaper to rent rather than buy a home in most parts of the country for the first time since December 2014, fresh research shows.

High demand from prospective buyers and a shortage in the number of properties being listed continues to push property prices up.

In May, tenants typically spent £71 a month less in rent than if they were forking out cash for mortgage repayments on a 90 per cent loan-to-value home loan for the same property, according to Hamptons.

Turnaround: It has become cheaper to rent rather than buy a home in most parts of Britain

Turnaround: It has become cheaper to rent rather than buy a home in most parts of Britain

The cost to rent in this instance would be £1,054 a month, against £1,125 a month for mortgage repayments on the same home.

Rewind back to March 2020, however, and a buyer with a 10 per cent deposit would have been around £102 a month better off buying a home rather than renting, the findings add.

Now, it is only cheaper to buy a home rather than rent in four regions, namely the North East of England, the North West, Yorkshire & the Humber and Scotland.

London has seen the starkest shift, with a buyer putting down a 10 per cent deposit going from being £123 a month better off buying a home in March 2020 to spending £251 per month less on rental costs in May 2021, according to the findings.

Hamptons said: ‘Falling rents in the capital have made renting cheaper relative to buying by a bigger margin than anywhere else. And with rents still falling, the differential looks set to continue growing.’

Costly: Monthly cost of buying relative to renting with a 10% deposit

Costly: Monthly cost of buying relative to renting with a 10% deposit

Buyers with only a 5 per cent deposit face an ever bigger uphill struggle than those with a 10 per cent deposit. A buyer with a 5 per cent deposit will, on average, spend around £195, or 19 per cent, more each month than if they had carried on renting, Hamptons said.

Amid fairly cheap mortgage deals, the stamp duty holiday and a strong desire among buyers for more space and a change in lifestyle, the pandemic has prompted frenzied activity in the property market in many parts of the country.

Around 704,000 homes on Rightmove’s website are currently marked as ‘sold subject to contract’, which means the sale has been agreed, but contracts are yet to be exchanged.

Aneisha Beveridge, head of research at Hamptons, said: ‘The pandemic has reversed a six-year trend which now makes it cheaper to rent rather than buy a home.

‘A year ago, lenders were either increasing their rates or withdrawing higher loan-to-value mortgages altogether. For first-time buyers in particular this pushed up the cost of a paying a mortgage, if they could get one at all, to well above the cost of renting.

‘It is likely the balance will swing back somewhat towards the buying, particularly as mortgage rates come down. However this is likely to be partly offset by rising house prices.

‘And while interest rates are falling, they’re still considerably above where they were pre-pandemic on higher loan-to-value loans.

‘Despite this, we expect the gap between renting and buying to close over the remainder of this year, moving back towards longer-term levels in 2022.’

Property prices reached another record high in May, with the average home adding more than £3,000 of value in the last month alone, recent figures from Halifax showed.

The typical home is now worth nearly £262,000 according to the Halifax price index, which is £22,000 or 9.5 per cent more than in May 2020.

Rental costs jump sharply too

Property prices for buyers have been a hot topic since the height of the pandemic, but the cost of renting has also jumped sharply to a new ‘record high’ over the period.

Last month the average cost of a newly let rental home swelled to £1,054 a month, representing a 7.1 per cent rise on the same time last year. This marked the fastest rate of growth since Hampton’s records began in 2013, surpassing the previous peak of 7 per cent growth in December 2014.

Rental costs: A table showing how much monthly rental costs have shifted in the past year

Rental costs: A table showing how much monthly rental costs have shifted in the past year

While rents bottomed out in May last year, the average rental home cost £43 or 4.1 per cent more than it did in May 2019.

Four out of the country’s eight regions recorded record rental growth last month, namely the South East, South West, Midlands and Scotland. 

Rental costs in the South East and South West of England hit double digits for the second consecutive month, rising 13 per cent and 11.5 per cent respectively.

Meanwhile London continued to be the only region where rents fell. The capital saw monthly rental costs dip 0.5 per cent year-on-year.

With many buyers and tenants seeking out more space, rental costs rose faster on bigger properties. In May the average rental cost for a four-bedroom home surged to £1,805 a month, up 9.5 per cent on the same month last year. Meanwhile rents on one-bedroom homes remained broadly flat.

Is buying the right option for you?

The decision to buy a home is a big one and shouldn’t be taken lightly. 

Here, This is Money and the Money Advice Service run through a number of the pros and cons to consider before taking the plunge and buying a property.

Pros of buying a home

– One of the best things about buying a home is that once any mortgage repayments are paid, which of course can take many years, you will own the property outright and not have to worry about paying for somewhere to live.

– If the home you buy goes up in value over time, if you ever decide to sell it you will be able to take advantage of the equity to help you buy a bigger home or fund a more comfortable retirement.

– When you buy a property, you can spend money improving your home and increasing its value without having to ask a landlord, which is what tenants renting a property often have to do.

– In some circumstances, but not all, it can be cheaper to buy a home as opposed to renting one. This is the case in places like Scotland and Yorkshire & the Humber at present.

 Drawbacks of buying

– As the Money Advice Service stresses, buying a home is a major commitment and you have to ensure you can afford to take it on.

– Maintenance costs like new boilers or a leaky roof can really stack up after you buy a home. And even before you move in, things like removal service fees can be expensive. 

– Interest rates are very low at present, but if and when they go up, mortgage repayment costs could increase for some people. It will always pay to shop around for the best mortgage deal. 

– If the value of your home falls, you might be unable to sell if you owe more to your mortgage lender than your home is worth, the Money Advice Service notes.

– You have less flexibility than when renting. For example, selling up and moving is more expensive as you have estate agency and legal fees to pay. 

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Social Democrats activists consider deferring request on leadership contest

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A group of Social Democrats activists who want to see a leadership election in the party is looking at deferring their request to consider such a contest until after a new general secretary is appointed to the party.

A draft letter to the party’s national executive, signed by two councillors and 14 others, seeking the leadership contest emerged on Friday evening.

The letter, which has not been sent to party authorities, requested the national executive meet to hold a vote to call a leadership election.

It pays tribute to the party’s current co-leaders Catherine Murphy and Róisín Shortall, who it states “have done exceptional work”, but adds that “it is now time to move to the next stage”.

The party released a statement later the same evening saying its TDs are “united behind co-leaders Catherine Murphy and Róisín Shortall”. This statement was shared on Twitter by all six of the party’s Dáil Deputies.

One of the councillors who signed the draft letter, Kildare representative Chris Pender, responded with his own social media post saying: “Anyone who’s read the letter will know it states we don’t have an issue with the leaders, but we believe in the democratic right to vote for that/those leaders.

“A leadership contest would give members the opportunity to show support for the current leaders, if that’s what they want.”

Cllr Cat O’Driscoll, who sits on Dublin City Council, was the other public representative who signed the draft letter.

Motivations

Sources insisted the motivations behind seeking a contest include giving the Social Democrats’ membership a say in who leads the party, as well as an issue of timing. They say with no general election expected imminently, it would give the next leader time to prepare.

It was also revealed on Friday that Brian Sheehan, a former director of the Yes Equality campaign, is to step down from his role as Social Democrats general secretary in early September. The decision is not connected with the call for a leadership election and those behind the draft letter were unaware of Mr Sheehan’s decision to leave the job.

However, it has prompted a rethink of the request for a leadership contest.

The Irish Times understands the activists are considering a new version of the letter that takes Mr Sheehan’s departure into account and would not seek a discussion about a leadership contest until after his successor is in place and has had some time in the job. A source suggested the approach with any new letter would be “a bit more cautious”.

On Monday, a party spokeswoman ruled out any contest for the leadership, either before or after the appointment of a new general secretary.

“The rules of the party state any leader must be a TD and all of our TDs are united in their support for the party leadership. The general secretary position is entirely unrelated to the party leadership,” she said.

Ms Murphy and Ms Shortall have jointly led the Social Democrats since its establishment in 2015.


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Instagrammer captures abandoned Welsh property in series of eerie photographs

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Who would live in a house like this? Instagrammer photographs abandoned Welsh property – complete with a bottle of Champagne for ‘Grandad’s’ 90th birthday, dishes still in the sink and a newspaper dating back to 1956

  • Photographs reveal the rooms have been untouched for decades and house opened bottle of Champagne  
  • Discovery was made by Instagrammer Kyle Urbex while exploring the countryside in Flintshire, North Wales 
  • Kyle said: ‘Overall the whole exploration just left me wondering the whole backstory’ 
  • ***Do YOU know who lived in the abandoned house? Contact izzy.nikolic@mailonline.co.uk*** 

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An abandoned Welsh house has been captured in a series of eerie photographs complete with a bottle of Champagne for ‘Grandad’s’ 90th birthday and dishes still in the sink.  

Photographs reveal rooms that have been untouched for decades and reveal a bottle of bubbly with a sticker which reads: ‘Happy 90th Birthday. Sorry I can’t be there to drink this with you! Lots of love James xxx.’  

The property has been dubbed ‘Granddad’s abandoned house’ after it was discovered tucked away in the woods. 

A piano can also be seen with sheet music still in place along with clothes hanging up and dishes still in the sink.

Photographs reveal rooms that have been untouched for decades and reveal a bottle of bubbly with a sticker which reads: 'Happy 90th Birthday. Sorry I can't be there to drink this with you! Lots of love James xxx'

Pictured: A piano can also be seen with sheet music still in place along with clothes hanging up

Photographs reveal rooms that have been untouched for decades and reveal a bottle of bubbly with a sticker which reads: ‘Happy 90th Birthday. Sorry I can’t be there to drink this with you! Lots of love James xxx’

The property has been dubbed 'Granddad's abandoned house' after it was discovered tucked away in the woods. Pictured: The exterior of the property

The property has been dubbed ‘Granddad’s abandoned house’ after it was discovered tucked away in the woods. Pictured: The exterior of the property 

Random debris including a broken bicycle, piping, empty tins and folding tables and chairs were left strewn throughout the house

The discovery was made by Instagrammer Kyle Urbex (pictured) while he was exploring the countryside in Flintshire, North Wales

Random debris including a broken bicycle, piping, empty tins and folding tables and chairs were left strewn throughout the house

Mr Urbex said: 'I visited the property just over four weeks ago and getting to the actual location wasn't too bad, just a walk up a small hill and the door was wide open'

Mr Urbex said: ‘I visited the property just over four weeks ago and getting to the actual location wasn’t too bad, just a walk up a small hill and the door was wide open’

The discovery was made by Instagrammer Kyle Urbex while he was exploring the countryside in Flintshire, North Wales.

Kyle also spotted a newspaper dating back to 1956 in what he believes was once someone’s ‘dream family home.’

He said: ‘I visited the property just over four weeks ago and getting to the actual location wasn’t too bad, just a walk up a small hill and the door was wide open.

‘Once inside I instantly saw the whole location was eerie because it was a house full to the brim of memories, ranging from clothes in the bedroom to old decaying pianos which once may have entertained many.

‘The porch area had been trashed, however the seating still remained intact and of course the champagne bottle for his 90th birthday still left on the fireplace.

He added: 'Once inside I instantly saw the whole location was eerie because it was a house full to the brim of memories, ranging from clothes in the bedroom to old decaying pianos which once may have entertained many'

Dishes are left undone in the sink in the kitchen

He added: ‘Once inside I instantly saw the whole location was eerie because it was a house full to the brim of memories, ranging from clothes in the bedroom to old decaying pianos which once may have entertained many’

Kyle says he has now been left wondering about the story behind the house. He added: ‘While the place appears to have been ransacked by vandals, clothes still hang in wardrobes; one of the few signs of the home it once was’

Kyle also spotted a newspaper dating back to 1956 in what he believes was once someone's 'dream family home'

Kyle also spotted a newspaper dating back to 1956 in what he believes was once someone’s ‘dream family home’

Mr Urbex added: 'Overall the whole exploration just left me wondering the whole backstory and how somebody could just leave so much memories and cherished possessions behind'

Mr Urbex added: ‘Overall the whole exploration just left me wondering the whole backstory and how somebody could just leave so much memories and cherished possessions behind’

‘I found it quite sad really given all the memories just left to be forgotten about. As well as the house there was a caravan hidden at the back in all the overgrowth which had more memories inside, old books and so on.

‘I managed to uncover an old bike in the shed which looked like it had been there quite a while.

‘Alongside all of these findings I came across a newspaper dated from November 3 1956.’

Kyle says he has now been left wondering about the story behind the house.

He added: ‘While the place appears to have been ransacked by vandals, clothes still hang in wardrobes; one of the few signs of the home it once was.

‘Overall the whole exploration just left me wondering the whole backstory and how somebody could just leave so much memories and cherished possessions behind.’

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Foley to bring school reopening plan to Cabinet on Tuesday

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Minister for Education Norma Foley says she has every confidence schools will reopen fully from late August and early September.

Ms Foley said there was ongoing engagement between her department and public health officials on the matter but all schools were set to reopen.

Strong mitigation measures would be in place in schools to ensure that they would continue to be controlled environments, she told RTÉ radio’s Today with Claire Byrne show on Monday.

Covid-19 infection rates among children were at their highest when children were not at school and public health experts had pointed out “on a consistent basis to schools being a very significantly controlled environment”.

The safe operation of the Leaving Certificate exams and enhanced summer camps indicated that the safe operation of education could be maintained, she said.

A plan would be put in place to allow schools to “draw down” CO2 monitors and the Minister said she was confident there would be enough monitors for all schools by the start of the new school year.

In relation to Covid-19 vaccines for children, Ms Foley said the “expertise” lay with the National Immunisation Advisory Committee (NIAC) from which her department would take guidance.

“I have received confirmation that the 16 to 18-year-old cohort should be in a position for online registration in the coming days, and I have been advised that the 15-year-olds cohort are still being considered by NIAC and there has been no definitive timeline given,” she added.

Ms Foley will bring a plan to Cabinet on Tuesday outlining enhanced public information campaigns, the outcome of antigen testing pilots, and the purchase of C02 monitors to assist in ventilating classrooms.

Capacity limits on school transport services will also remain in place.

Government sources were adamant on Sunday that second-level education would resume in the autumn, despite concerns among public-health officials that the wave could grow following the reopening of indoor dining today, before peaking in September.

“Schools will reopen,” a senior Coalition source said.

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