UK regions where it’s cheaper to buy a home with a 10% deposit than rent
THE price of buying a home for the first time is cheaper than renting in several UK regions, according research.
Online broker Trussle looked at the best 90% loan-to-value (LTV) mortgages offers on the market, where buyers only need to supply a 10% deposit.
They found that average monthly mortgage repayments work out to be cheaper than the average monthly rent in five UK regions.
It comes as rents hit record highs while the reintroduciton of LTV mortages have made it cheaper for first-time buyers to purchase a home.
If you can afford to put down a bigger deposit - for example 20% or 30% - then it becomes cheaper to pay monthly deposits than rent in more areas of the UK.
But with a smaller 10% deposit, first-time buyers can make the most savings by purchasing rather than renting a property in a handful of regions.
The launch of the Government’s loan guarantee scheme has also made it cheaper for first-time buyers to purchase a property with the option to apply for a 95% loan.
Wannabe homeowners can also get a discount of up to 50% off a new-build home with the Government’s First Home scheme.
The discounted homes will be sold to local people who want to stay in the community where they live or work, but are struggling to buy a home at market prices.
The schemes come as part of the Government's wider affordable housing plan announced in June last year.
But the surge in cheaper mortgages, as well as the stamp duty relief extension, have been driving factors in the rise of house prices during the pandemic.
In April, house prices jumped almost £7,000 in a month to an all-time high of £327,797, according to Rightmove.
The surge has also been driven by a shortage of houses on the market, as more families search for homes out of cities due to the shift of working from home.
Plus, there is growing optimism with buyers due to the vaccine roll-out.
The new 5% deposit mortgages have been launched by leading banks including Natwest and Barclays as part of the government's 95% mortgage scheme.
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Lenders pulled almost all of these types of mortgage deals when the coronavirus crisis hit last year as they were seen as too risky.
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