THE PROPERTY EXPERT

Buy as you go?

THE economics of comparing the costs of owning a home versus renting is relatively complex and widely discussed, or even debated.

A wide range of variables need to be considered in the calculation, not limited to interest payments, capital repayments, repairs and insurance, and particularly geographical location. The fall in mortgage payments means that in 13% of the country, including Glasgow and Manchester it is now cheaper to buy a home than to rent one.

Home ownership is of course not just about an economic consideration, but also the security that individuals and families have, the ability to personalise and make changes to a home, as well as the longer term investment; all factors that lead the majority of people in the UK to aspire to one day own their own slice of property.

With rents on the rise coinciding with falling mortgage costs, ownership is likely to become even more attractive. Raising a deposit does continue to be the major limiting factor for many potential buyers, as in many cases rent and mortgage payments do have parity.

Interestingly then, a coming announcement from the government of ‘buy as you go’ expected in the Autumn Statement will potentially be an interesting proposition for prospective buyers.

The general principle is likely to be that for those who do not meet eligibility criteria for a traditional mortgage, without a deposit or mortgage, buyers will gradually gain a stake in their homes over time.

The National Housing Federation is thought to have informed ministers that around 335,000 homes could be built in the next four years under this project, if funded.

This kind of programme should be music to the ears of those caught in the rental sector, and particularly those with young families who are looking for more security and stability in the future.

Given recent discussions from politicians about inheritance being a viable step onto the property ladder, it is a welcome change to hear that those who may not have similar familial finances are being considered and catered to by the government.