Deal Sourcing UK Investment Property

Why Is Rent-To-Rent Now Cheaper Than Buying A UK Property?

There have been a number of factors driving the UK real estate market since the beginning of the pandemic. Many city and town residents have relocated to more rural areas in search of greater space, while room improvements, home offices, and new garden equipment have all been high on the dream list.

According to the Office for National Statistics (ONS), the real estate market has flourished in the last year, with average prices throughout the UK growing at their highest rate since the run-up to the financial crisis in August 2007 – up 10.2 percent in the year to March.

According to statistics from estate firm Hamptons, another key trend to emerge is a “pandemic-led shift” that has made renting cheaper than purchasing for the first time in more than six years.

According Aneisha Beveridge, Hamptons’ research director, claimed the pandemic was responsible for reversing a six-year trend. “A year ago, lenders were either raising rates or phasing out higher loan-to-value mortgages,” she explained. “This pushed the cost of paying a mortgage if they could acquire one at all, considerably above the cost of renting for first-time buyers in particular.”

Purchasing a property has been cheaper on a monthly basis for the past five years than renting. A buyer with a 10% deposit would have been £102 per month better off purchasing than renting in March 2020. “However, the pandemic reversed this trend,” stated Hamptons.

Renting a property in the UK was £71 per month (7 percent) cheaper than buying in May for a first-time buyer with a 10% deposit. “They would have spent an average of £1,054 per month on rent vs £1,125 per month on mortgage payments.”

Rents have increased by 7.1 percent in the last year, while rising housing prices and higher loan-to-value (LTV) mortgage rates have increased the cost of purchasing and owning a property.

Which Regions Are Cheaper To Rent? 

Buying a home was cheaper than renting in every part of the UK early last year. Only the North East, North West, Yorkshire and the Humber, and Scotland defied the trend last month, with the North East, North West, Yorkshire and the Humber, and Scotland bucking the trend.

 London has witnessed the “biggest change since the start of the pandemic.” In March 2020, a buyer who put down a 10% deposit on a house in the capital would have been £123 per month better off purchasing, and in May 2021, they would have spent £251 per month less on rent.

Rents Hit A High Record

Rental growth has reached a new high, with the average cost of a recently let rental house in the UK rising to £1,054pcm in May, up 7.1 percent from the previous month. L ast month’s record increase rate was attributed to “massive increases in prices for larger houses.”

May’s statistics was the highest rate of increase exceeding the previous high of 7% in Dec 2014. For the second consecutive month, rents in the South East and South West increased by 13% and 11.5 percent, accordingly, while London remained the only area where rates decreased (-0.5 percent year-on-year).

What Happens Next? 

With the cost of renting compared to buying at its lowest point since late 2013, A popular real estate agency predicts that the balance will “swing back somewhat towards buying, particularly as mortgage rates fall.”

“However, rising housing prices are expected to counteract some of this. While interest rates are decreasing, they are still significantly higher than they were before to the pandemic on higher LTV loans. Despite this, we estimate the rental-to-purchase difference to narrow throughout the rest of this year, returning to longer-term levels in 2022.”

In The United States, There Is A Similar Tendency

Renting is less expensive than owning not only in the United Kingdom, but also in the U. S. According to many surveys, renting in the 50 major metropolitan regions in the United States costs less per month.

According to the research, renting is $606 (£430) cheaper than buying in the country’s major cities. “The cost difference between renting and buying a property with a mortgage is the greatest in New York, San Francisco, and San Jose.” “Renting versus owning a property while paying down a mortgage is roughly $1,200 (£852) cheaper on average in these three cities.”

PropTech Simplifies The Process

Property investing has never been easier than it is now. It used to be difficult to locate potential properties. Many landlords had never heard of it and preferred to locate a renter through a rental agency.

You may now sit at your computer and quickly find houses that fit your criteria, as well as owners who are actively looking to rent their properties to an investor.

There is software that allows you to assess the possibilities – such as market rent pricing and yield for your home – and you have access to a wealth of information that allows you to perform thorough study in minutes rather than months.

One of the most well-known is DealSourcing. This proptech technology can speed up the process of looking for a property in the United Kingdom by combining numerous components into a single system that acts as your own real estate agent. The system can discover and categorize investments throughout the internet using algorithms and automation.

You’ll save time as well as money! The platform’s major selling point is its capacity to discover high-yielding assets. If you want to invest in the UK property market, is a no-brainer.

The system can also estimate the return on investment for each house posted on Rightmove, Zoopla, and Gumtree, as well as locate underpriced properties for sale, saving time and money for investors.

This information was provided by allows you to control the influence of technology. You can search over 200,000+ Below Market Value transactions (Buy-To-Let, HMOs, and BRRR) with ROIs of more over 15% with the click of a mouse. You can rapidly identify high-yield properties using our basic and easy-to-use tools.

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