The age-old topic of renting versus buying has been making headlines again – albeit in more sobering tones. Of course, the issue has never gone away however recent coverage in the national press was of interest to Complete Mortgages for two reasons.
Firstly, as a Guildford-based mortgage adviser, the national press attention has focused on Guildford. Secondly, it highlights how now could be a time to find a mortgage before the gap between rental and mortgage payments widens even further.
So, what exactly is the issue? Well, at the heart of it is work carried out by the Resolution Foundation, which shows how 1.3 million households allocate over a third of their entire income to mortgage payments, rent and maintenance. In housing terms, it is widely accepted that if you spend more than 35% of your income on housing then it is unaffordable.
According to the research, families are substituting other items such as furniture and even food to pay for their accommodation, which is wholly unsustainable and needs to be addressed sooner rather than later.
Now, it’s no surprise that the results are disproportionate across the UK. It’s also probably no surprise that the highest proportion of those having to wrestle with unaffordable housing live in London. However as a company specialising in mortgage advice it was surprising to find out that Guildford was one of those areas deemed expensive when compared with the rest of the UK, with the average monthly rent coming to £950 (63% of average income) compared with the average mortgage payment of £860 (57% of average income).
At 40% of income (£600), even affordable housing isn’t deemed affordable in Guildford!
What does this tell us? Well it highlights what we already know – renting is expensive. And all evidence points to the fact that it will only become even more expensive. Of course, finding a mortgage isn’t necessarily a straightforward or achievable process in itself for many people. However there are ways of securing a mortgage in an affordable way so that you don’t have to compromise your living standards or place unnecessary pressure on your day-to-day living arrangements.
Whether you’re a first time buyer in need of advice or someone looking for buy to let mortgage guidance, there are options. And exploring them sooner rather than later could save you money in the long-term.