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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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Barings and HBD secure planning for London logistics scheme (GB)

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Barings and HBD have secured detailed planning for a strategic logistics scheme in Rainham, London, transforming a 20-acre brownfield site. The new development, Momentum London, is being delivered by Barings and HBD in a joint venture partnership. It will create 381,814ft² of new logistics and industrial space across four units ranging from 41,000 -171,000ft².

 

The scheme will target Net Zero Carbon, BREEAM “Excellent” and an EPC “A+” rating. This is being achieved by dynamic design, careful consideration of materials, zero use of fossil fuels, maximizing photovoltaic solar panels, battery storage and intelligent building systems. The units will be 100% EV ready, including passive fleet charging to the yards.

 

The logistics park will be set in landscaped environment with picnic and public areas, as well as direct access onto the Thames Cycle Path, so that it brings further social benefits to the area. Positioned on the River Thames, with potential for jetty access, Momentum will offer an easy stepping stone into Central London and out via the A13, just minutes away.

 

Darren Hutchinson, Head of UK Real Estate Transactions and Managing Director at Barings, said: Momentum London will be a strategically located logistics scheme with strong environmental and social credentials, beneficial both to future occupiers and the communities around it. Logistics is one of Barings’ preferred investment sectors and Momentum London exemplifies the kind of developments we’re seeking, with a keen interest in exploring joint ventures like this one with HBD.”

 

Simon Quine, Senior Development Surveyor at HBD, said: “Industrial and logistics space remains in very limited supply across London, particularly larger distribution units. Momentum will plug that gap within the M25 and provide modern, sustainable logistics and distribution space to serve London and the wider South East market. Landscaping and wellness have been thoroughly considered, with careful design considerations and enhancements to the Thames Foot and Cycle path, which we hope will help occupiers to attract and retain staff.”

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Mirrored furniture trend can create the illusion of space in your home

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Mirrored furniture provokes strong emotions. Some see it as the epitome of bad taste, flashy and bling. Others know that mirrors have magic powers.

A mirrored table or cabinet makes a room or a hallway appear more swish and spacious. It’s a trick that bars and restaurants employ to ensure their establishments appear roomier and more inviting — and they can add lustre to your home, too.

Choosing a piece of mirrored furniture also sends out a sign that you are aware of one of the year’s trends — the return of Art Deco, the influential style that emerged in the 1920s. 

Reflections: A mirrored bedside table. The power of the mirror to create an impression has been recognised for centuries

Reflections: A mirrored bedside table. The power of the mirror to create an impression has been recognised for centuries

It blended forms that celebrated modern machinery with decorative elements drawn from Greco-Roman culture and nature. 

The mirror was a favourite material, used on the surfaces of furniture and walls to supply a shimmering silver and gold effect.

Probably the most famous piece of Art Deco architecture is New York’s Chrysler Building. Completed in 1930, its sunburst-patterned stainless steel spire remains one of the key elements of the Manhattan skyline.

Art Deco console tables, drinks trolleys and other items from the era of the building’s construction sell for thousands on auction sites such as 1stdibs underlining the growing appeal of this aesthetic. 

Jamie Watkins, the co-founder of fabric and wallpaper company Divine Savages, explains Art Deco’s allure for a new audience.

‘Art Deco, with its bold geometrical patterns was such an iconic period for design: it’s synonymous with glamour and luxury.’

The resurgent popularity of Art Deco is also based on its practicality: a mirrored piece works with almost any interior, adding interest and depth.

The power of the mirror to create a wow impression has been recognised for centuries. 

Examples of this technique include the round mirror on the wall behind the bride and groom in Jan van Eyck’s 1434 Arnolfini Portrait in the National Gallery. It sends out the message that the couple are discerning — and wealthy.

Cheers: B&M's £25 oval drinks trolley with two mirrored shelves

Cheers: B&M’s £25 oval drinks trolley with two mirrored shelves

The hall of mirrors in the palace of Versailles was designed to be a place of beauty, but also to display the financial resources of Louis XIV, the Sun King. Mirrors were a luxury item until an inexpensive manufacturing process was invented in the 1830s.

In 2022, it is possible to pick up mirrored pieces for under £100. B&M has a £25 oval drinks trolley with two mirrored shelves that would lend an air of Thirties elegance to any gathering. The £94.99 Ellison serving cart (a U.S. term for drinks trolley) from Wayfair has a similar vibe.

If you believe that the right mirrored trolley would save you money on trips to bars, the larger £144.95 gold oval mirrored trolley from Melody Maison could be the thing.

A mirrored cocktail cabinet will dazzle guests. The £1,200 Primrose & Plum champagne and gold cabinet has a Jazz-Age feel.

The £299 Venetian sideboard from Furniture Market, meanwhile, is a more modestly priced way to conjure up the party spirit of the Roaring Twenties.

The show flats of apartment blocks are often equipped with mirrored cocktail cabinets containing bottles of spirits and crystal glasses. This makes buyers dream of dinner parties, with a prelude of aperitifs, but also serves to make the apartment appear even roomier.

A console table in the hall also creates an illusion of space which can be amplified by the addition of a lamp. HomesDirect365 has a range in the style of almost every era including Art Deco, Regency, the 1960s and the 1970s. Prices start at £233.

The bedroom is often the most cramped room in either a house or flat which is why this can be the best place to experiment with mirrored furniture. 

The desire to preserve family harmony is another reason. The other members of your household may prefer the kitchen and living room to be slick and understated, seeing anything mirrored as excessive.

In the bedroom, however, you can indulge your decor fantasies. Habitat has the one-drawer Hepburn bedside table for £76.

Next offers the antique effect Fleur bedside table which costs £225 for the one-drawer version and £275 for the two-drawer version. 

The Fleur is also available as a six-drawer chest for £599 or a £1,150 double wardrobe if you seek to waft around your bedroom channelling your inner 1930s Hollywood screen siren. 

Dunelm’s Venetian mirrored dressing table also offers a chance to live out your dream of silver screen stardom (£449).

If mirrored furniture has brought out your party animal, kindling a passion for Art Deco in every guise, Divine Savages offers Deco Martini wallpaper whose design is based on the geometric forms, with a hidden Martini glass within the print (£150 per roll).

Some of your guests may not be too busy checking out their reflections on the doors of the mirrored cabinet to notice this subtle and witty detail in the wallpaper.

Savings of the week! water jugs… Up to 52% off 

The Sandvig hammered-glass jug from made.com is half-price at £22

The Sandvig hammered-glass jug from made.com is half-price at £22

Sitting outside on a sunny afternoon is already delightful. But it is even more enjoyable if you are sipping on a cool drink or an iced coffee from a generously sized jug, or maybe even a Pimm’s. The arrival of the July sales means bargains abound.

If you prioritise practicality, Ocado’s textured lustre plastic picnic jug has 33 per cent off at £8.

The price of the pleasingly geometric plastic smoky-grey Prism jug from Wayfair is 16 per cent off at £10.10. 

If you would like to feel as if you are in the south of France, John Lewis has the plain glass Arles wicker-wrapped jug. It is reduced from £25 to £12, down 52 per cent.

Wanting something more elegant that you can also use for flowers? The Sandvig hammered-glass jug from made.com is also half-price at £22.

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VGP acquires French logistics development

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VGP NV and VALGO signed an agreement to purchase 32 hectares of land that housed the former Petroplus refining units in Petit-Couronne, near Rouen. This brownfield rehabilitation project is fully in line with VGP’s core expertise and strategy. Thanks to the six years ownership of the site by VALGO and its expertise in asbestos removal, soil and water table decontamination, in-situ waste treatment and development, this area has now become a suitable site for the development of new industries and business activities.

 

On the banks of the river Seine and close to the A13 highway, the 32-hectare area of land offers its future users a highly strategic location. Following the extensive depollution work carried out by VALGO, the site is now ready for redevelopment. VGP expanded into France only a few months ago and is delighted to start its French business activities in the dynamic Rouen Normandy metropolis area, via this major project. In total, around 150,000m² of land are set to be redeveloped to accommodate industrial and logistics projects, with work due to begin in 2023.

 

Jan Van Geet, CEO VGP, said: “VGP is delighted to begin its business activities in France on a site as exceptional as this one, with strong economic and environmental ambitions that are shared by both our partner, VALGO, and the local authorities. As the rehabilitation of brownfield sites is at the heart of our business, this project is a great opportunity for us to deploy our industrial and logistical know-how. The uncertain geopolitical situation and the rise in transport prices mean that companies are increasingly looking for local support to start their business. In this context, we strongly believe in the relevance of our integrated model with a long-term vision. We are now eager to get to work and bring all the expertise of the Group to the project.”

 

Francois Bouche, CEO VALGO, commented: “We are delighted that this huge piece of land has been sold to a major investor with experience in redeveloping brownfields in Europe. However, I would first like to celebrate the work of the men and women who worked so hard to make this colossal project a success. It took more than 1 million hours and over €60m in investment by VALGO to turn the page on over 80 years of refining on this site, which already employs 600 people.”

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