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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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Djokovic violated Australia’s highest national value – a ‘fair go’

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Every few years, a celebrity tries to test out the Australian border and in a nationalistic show of strength they are sent packing.

To the outside world it might seem from time to time that Australia chooses a celebrity to sacrifice at the altar of sovereignty. It must seem we make an example out of them, to scare everyone else off lying on their immigration forms and from smuggling forbidden, squashed fruit from the aeroplane meal into the country.

Things got a bit heated back in 2015 when Johnny Depp and Amber Heard sneaked their dogs into the island nation with a delicate ecosystem and a fondness for biosecurity. It escalated when the now deputy prime minister Barnaby Joyce threatened to have the dogs put down.

Depp and Heard ended up copping a fine, complying with procedures and were made to film a video apologising to Australia in a performance as natural and warm as a hostage proof of life tape.

Depp eventually turned around and said Joyce looked like he was “inbred with a tomato”, but only after he was safely back in the US, like the notable big man he is. Deputy PM Joyce recently shot back in trademark eloquence calling Depp a “deadshit” live on national breakfast television.

Citizens of other (more boring) countries might be dismayed that their national 2ic would trade verbal blows with Captain Jack Sparrow. Not Australians though, who are taught in high school that our economy and trade could be threatened by an outbreak caused from improperly imported fauna and flora. We said “Good onya Barnaby” for applying the rules fairly and squarely, regardless of stardom.

There was broad support for his actions at the time, just as there has for the cancellation of Novak Djokovic’s visa. There has been a lot of legal wrangling involving the Balkan bad boy of tennis, who is now to be deported, but for Australians the stoush was really over one thing: did he try to get around the rules?

There’s a lot of overseas analysis around the Australian public and the political will behind pursuing the case against the tennis star. After all “Djoker” (Jock-a), as he’s known here, is one of the biggest crowd-drawing players at the Australian Open, a banner event in a country where sport is the default religion. Why not let this one slide?

It’s being said that Australians just love rules. But I think this is over simplistic. What Australians actually love is fairness. In past surveys Australians have listed “fairness” and getting a “fair go” as their highest national values. There is an expectation that it doesn’t matter who the person is, they should be treated equally. We hate special treatment, particularly when it’s a public figure appearing to bend the rules the rest of us are following.

In Ireland sometimes there is the ‘ah here, sure look, go on ahead’ approach. This can be a publican letting patrons stay for a sneaky lock in, the bus driver letting you on when you don’t have correct change, but also includes say a person keeping their high-profile job after attending a certain golf function.

Rules in Ireland are bent for people we know, just as we give jobs, rentals and sometimes vaccines to people we know, in the name of “helping out”. This is seen as a positive thing by those receiving the favour, and “nepotism” by others.

Of course, Australia also has favouritism and nepotism but we like to think we don’t. Rules equate to fairness. Everybody has to be inconvenienced equally. Someone trying to get around rules when the rest of us are stuck following rules, even if they’re ones we hate, deserves to be punished.

Covid-19 has exacerbated the situation. No one is enjoying Covid rules. “I am doing the right thing, and it’s deprived me of joy just so this utter tiprat next to me can ignore them at will” is the angry thought rattling around in our rage filled brains.

Australians have not forgotten the 40,000 or so “stranded Aussies” who remained stuck overseas thanks to strict border controls during the pandemic. Those who did not get to see dying parents or hold their own children. A multi-millionaire tennis player seemingly looking for a loophole to hit a ball about for a few weeks because he refused to be vaccinated was never going to go down well.

When Djokovic stayed at the Park Hotel, the only people who might have been happy to see him were the asylum seekers who have been held there for years by the Australian Government while they await processing. They made signs and waved to TV cameras, hoping to draw attention to the “rules” keeping them locked up without an end in sight.

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Interiors trends for 2022: It’s all about vibrant designs and natural textures

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Some home trends last the course (think sustainable design and open-plan living), while others are, thankfully, fleeting (goodbye matching furniture and round beds). 

But there are a few we can count on to stay the distance this year.

So here’s what we think will be in vogue for the next 12 months.

Jaunty: A striped armchair. Curves, spheres, lozenges and circular silhouettes reflect our current desire for a greater sense of flexibility in the way we merge work and play

Jaunty: A striped armchair. Curves, spheres, lozenges and circular silhouettes reflect our current desire for a greater sense of flexibility in the way we merge work and play

Soft shapes

Curves, spheres, lozenges and circular silhouettes reflect our current desire for a greater sense of flexibility in the way we merge work and play.

‘You can expect to see more organic shapes coming to the forefront in terms of furniture,’ says the Dining Chair Co’s Amanda Huber. 

‘Curved designs feature softer lines, creating a less strict and more informal setting.’ Check out the gracious shape of Soho Home’s Luciana sofa, £2,495.

Playful pieces

The latest interiors don’t take themselves too seriously — the idea is to elevate simple materials or use them in a creative way.

Think wide, jaunty stripes on an overscaled armchair (take a look at Buchanan Studio’s Studio chair, £2,394, for inspiration), half-length linen café curtains used as cupboard skirts, and trims, tassels, bobbles and fringing on curtains, lampshades and upholstery. 

Relaxed, unfitted kitchens also feed into this look: Buster + Punch’s latest foray into freestanding cabinetry is designed to easily adapt to lifestyle shifts.

Earthy: Bold, natural colours are set to have a resurgence in our homes next year

Earthy: Bold, natural colours are set to have a resurgence in our homes next year 

Colour confidence

More of us are experimenting with colour — whether that’s mixing bold primary tones, colour washing our walls or choosing confident finishes such as all-gloss or soft plaster. 

Warm hues and nature’s tones are set to prevail, from rich terracotta and sand to olive and deeper greens.

This calming, earthy palette suits our renewed connection to nature during the ebbs and flows of the pandemic, when ‘home’ has become a byword for sanctuary. Look out for calming and uplifting bright blues.

Handcrafted appeal

Items that feature the hand of their maker inject individuality, such as the beautifully detailed pieces of Galvin Brothers: the Bobbin Side Table, £375, or the Fluted Cabinet, £4,800, both future design classics, which take inspiration from the shape of ancient columns.

Introduce handcrafted appeal through lighting, too. Susie Atkinson’s Plato lamp bases, inspired by 1940s conical leather lamps, are coated in high gloss colours. They work well with a hand-painted or trimmed shade; Rosi de Ruig’s are a timeless option, priced from £60.

Swish: Bert & May¿s Ric Rac tile from designer Samantha Todhunter

Swish: Bert & May’s Ric Rac tile from designer Samantha Todhunter

Mindful design

Lessening our impact on the planet remains key. 

‘Sustainability is not a trend, but a key design principle,’ says Kelling Designs’ Emma Deterding. 

‘It’s about changing our mindset to embrace upcycling, reupholstering and repairing.’ 

This also translates into buying fewer but better pieces and researching provenance.

‘Seek out items made from recycled materials, such as outdoor furniture produced from recycled aluminium, upcycled fabrics or fabric leftovers for upholstery, and recycled glass for tableware and tops,’ says interior designer Claudia Ludwig.

Flexible living

With many of us required to work from home at a moment’s notice, our living spaces need to accommodate relaxing, escaping, cooking and working. So quality joinery is high priority.

‘All of my projects focus on it, from library style shelving and desks to concealed storage,’ says interior designer Louise Robinson.

‘Another trend that has become hugely popular is open-plan layouts and indoor/outdoor living, which is set to continue as we try to reclaim our homes from pandemic living,’ says Fionnuala Johnston, senior home designer at John Lewis.

Try textures

The trick is to look for less obvious ways to introduce these familiar elements. Try opting for warm oak internal doors rather than ubiquitous Crittall; lining front door surrounds and frames with richly veined marble or using tactile Zellige tiles in bathrooms and kitchens.

Check out Bert & May’s new Ric Rac collection with designer Samantha Todhunter, whose pattern is inspired by the ric rac ribbon she used to sew onto the Spanish dancing skirts she made as a child.

Global interiors

Armchair travel is on the rise as many are reluctant to take risks.

That translates to confident interiors that are embracing global design motifs, from deeply pictorial wallpaper such as Osborne & Little’s Portovenere, featuring retro Ligurian village scenes, £94 per roll, to patterned flora and fauna soft furnishings.

Charming ceramics

Spanish and Italian handmade pottery is enjoying a resurgence. See the vintage collection at The Edition 94, from £40 per plate and the range of decorative jugs, plates and dishes by traditional maker Cerámica J. Marín, available at Liberty.

Savings of the week! Winter duvets

Dunelm¿s Fogarty Soft Touch microfibre-filled duvet costs from £17.60 to £35, depending on size

Dunelm’s Fogarty Soft Touch microfibre-filled duvet costs from £17.60 to £35, depending on size

Fuel bills are set to soar. Since turning up your thermostat against winter chills will harm the wallet this year, consider a new duvet, an item on which heartwarming savings are now available,

This will also be an investment in better sleep, improving your health and mood in the morning. 

If you share your bed, a 10.5 tog rating duvet should be sufficiently cosy.

Dunelm’s Fogarty Soft Touch microfibre-filled duvet costs from £17.60 to £35, depending on size, a 20 per cent reduction. 

A kingsize costs £33.60, down from £42. For a little more, you can have the microfibre-filled Feels-Like-Down duvet from bedding store Julian Charles, which costs from £55 to £85, a 50 per cent reduction. 

The Woolroom Deluxe costs from £112.50 after a 25 per cent reduction

The Woolroom Deluxe costs from £112.50 after a 25 per cent reduction

The price of the kingsize is £75, down from £150.

Happy to splurge? Then prices for Marks & Spencer’s Luxury Siberian goosedown duvet start at £192, down 40 per cent.

Should you dream of snuggling up under a British wool-filled duvet, the Woolroom Deluxe costs from £112.50 after a 25 per cent reduction. 

The kingsize is £157.50 down from £210.

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One winner claims €19m Lotto jackpot in first ‘will be won’ draw

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After more than 60 draws over seven months the €19.06 million National Lottery jackpot was finally won tonight by one person who matched all six numbers.

The jackpot had remained capped at €19.06 million since October 2nd and had not been won since June last year. It is the biggest National Lottery jackpot win in in the State.

The jackpot numbers drawn were: 2, 9, 16, 30, 37, 40 while the bonus number was 23.

Tonight had been the first “will be won” National Lottery draw which could have seen the prize shared among those who matched five numbers and a bonus number, or, if still no winners, those who matched five numbers, in the absence of an overall winner.

However, this process was not required as one lucky person matched all six numbers.

Almost €5.5 million was shared by 149 players who matched five numbers and the bonus number.

The National Lottery said it would will reveal details on where the winning ticket was sold in the coming days.

A spokesman for the National Lottery advised everyone who played to check their tickets.

“If they are the lucky winner, we encourage them to sign the back of the ticket immediately and contact our prize claims team on 1800 666 222 or email claims@lottery.ie , and we will make arrangements for you to collect your prize.”

Earlier the Lotto app and website came under severe strain ahead of the first “will be won” jackpot draw.

Some users of the Lotto App were confronted with this message in the minutes shortly before the cut-off to buy tickets.
Some users of the Lotto App were confronted with this message in the minutes shortly before the cut-off to buy tickets.

Some players seeking to play via the Lotto app shortly before the 7.45pm cut-off were told that “due to high traffic volumes we are experiencing technical difficulties”.

The National Lottery website was also displaying a “currently unavailable” message shortly before the draw at 8pm.

Sales of tickets for tonight’s draw were reported to have been significantly higher than a standard draw.

The succession of jackpot rollovers had prompted the operator of the National Lottery, Premier Lotteries Ireland, to seek the addition of the “will be won” draw.

In future lottery jackpots will only rollover five times once the prize cap has been reached.

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