22 Nov Are you better off renting in London and Dublin?
Renting in London and Dublin
There is a natural reaction to side with the idea of buying property as opposed to renting in London and Dublin but the movement of the property market, particularly in areas like London and Dublin, has seen a change in the natural order. While there are still many people who want are keen to buy in these areas, the number of people who find themselves priced out of the market or unable to obtain a mortgage in these areas means that there is a growing level of demand for rental options.
There are also a growing number of people who could obtain a mortgage in cities like London or Dublin but who find that there is better for them to rent as opposed to buy. This is a big change from the natural order of the property market but there are findings, statistics and figures to back up this way of thinking.
Renting can be a cheaper option in London
A study undertaken by an online property portal in the United Kingdom found that renting property in London can be half the cost of making mortgage repayments. The study focused on two bedroom properties with the average rent for this style of property at £1,861 per month in London while the average mortgage repayment per month for this property type was £3,001 per month.
The chance to save close to £1,200 per month is going to be of benefit to people, even if you are looking to buy property in the future. The more money you have saved that can be used as a deposit, the more likely your mortgage application will be accepted and the better rate of APR you are likely to be offered. With this in mind, a couple of years renting could make all the difference in obtaining a more attractive mortgage, so in this example, there is a lot to be said for being better off renting in London.
In fact, the study said that 54% of the largest urban areas in Britain presented a situation where it was cheaper to rent than buy. This information stands in contrast to information, from October of 2016, which suggests that 60% of the largest urban areas in Britain presented a situation where it was cheaper to buy than rent. This movement in 2017 has led many people to consider the rental market in a more favourable light, particularly with respect to the London property market.
Not everyone can obtain the best standard of mortgage
These figures were based on the assumptions that the buyer would have a 10% deposit to place on the property and that the length of their mortgage would be 25 years. This wouldn’t be the case for every potential property buyer so there may be even more people would be better off renting than buying.
Information provided by a leading Irish property website and app would suggest that there are also areas where buying property is more expensive than renting. A particular focus was placed on family homes and property in the South Co. Dublin, with the latter having family homes on the market that were 60% more expensive than renting.
If all you think about is the bottom line, there are reasons why you should consider renting in London and Dublin as opposed to buying property but of course, there are also many other reasons why renting is the option that is preferred by many people.
Anyone that doesn’t want to lay down roots or who is unsure of their future may find that renting is the more suitable solution for their short term needs. There is no point in committing yourself to a major investment if this is going to be a hindrance in a short period of time.
Take your time to get to know an area if you are new to a city
There is also the fact that many people are drawn to London and Dublin for the nightlife, entertainment and social activities provided by the major city. This means people are looking to stay in the heart of the city or in a thriving area. It is often more suitable to find rental accommodation in these areas as opposed to buying property. There is also the fact that people who are new to the area, with many people arriving in Dublin and London from afar, may want to settle into the area and find out what is on offer before making a major commitment.
While owning property provides you with an asset and is something that many people should consider, there are times and situations where you are better off renting in London and Dublin.