House prices: the areas where it is cheaper to buy than rent

OOooh liked the comment that people on benefits who can't now afford to meet the shortfall btw rent and govt allowances should move out of London.

Well I guess its like if you cant pay the hotel bill then dont stay there. Should others really pay your rent for you?

i thought this govt will come strong on benefits scammers but same stories just diff govt.

Pass the second sentence of Anonymous 2 ' s comment to the whingeing Gold Trail clients.

Anonymous 4 knows a thing or two.

Anon 4 + Graham: What a load of rubbish, people who cannot afford to live in London due to unemployment benefits should simply not live there. I work full time and pay my taxes; I do not wish to see the funds spent keeping people who don't want to work in shelter and cider. They can ever bugger off to somewhere income support can allow them to live (dustbin for all I care at this point). Orr....get a job, if this is inconvenient or difficult for them, I would say a resounding 'TOUGH'

AS for Gold Trail clients, comparing a travel operator unexpectedly going bust (unexpectedly to a layman who could not be expected to do due diligence of a travel company before using it) and people living in houses they cannot afford and therefore shouldn't live in is a p*** poor comparison.

"Average rents on two-bed flats are currently at £2,155 a month while average asking prices are an eye-watering £446,345. But mortgage repayments at 5% are lower at £1,859 a month."

BIT OF A SELECTIVE BULLSH1T STATISTIC HERE, EVERYONE!!!

Where I live the average asking price for a 2 bed flat is £300K and the average rent is just £800pcm. Renting is cheaper than buying not only on the basis of cashflow, but also on the basis of overpriced property and insanely low interest rates.

"If interest rates were to increase by 1% and rents to remain the same, the tables would be turned and renting would become more cost-effective in 80% of the locations studied."

HMM, IF? IF???

The next big downphase in coming in Q3 2010 - an epic stocks and shares crash to make the 2007 Northern Rock failure and the Lehman Brothers collapse look puny by comparison.

INTEREST RATES GOING UP BY AUTUMN. FACT.

Repayments on a £446k mortgage only total £1.8k if it is interest only and taken over 30 years. Not sure how many Banks provide 30 year interest only mortgages? On top of that the figures do not take into account cost of ownership such as insurance and repairs/renewals.

Load of rubbish.

With interest rates at 0.5% I'm surprised that it isn't cheaper to buy than rent everywhere. However, if interest rates go up then it will change the equation and it will be cheaper to rent than buy in most places.

Costs of owning versus renting should include more than just mortgage repayments - for example, on the flat I let out, annual service charges are well over £3,000 and I am also responsible for other expenses such as repairs, insurance, etc.

Just comparing rent with mortgage is a very incomplete comparison. What about maintenance costs, decoration, service charges and risk of large unexpected bills (all covered by the landlord) and the loss in income on the deposit. You cannot get a good mortgage rate without a big deposit and the loss of income should not just be assumed to be the loss of (risk free) bank interest because a deposit on a property is a very high-risk investment, so should be compared with far higher yielding risk assets e.g. 7% paying or even 10% APR Add to that up to 5% stamp duty, other costs of buying and the real risk of a drop in house prices and an almost certainty of a significant increase in interest rates and buying is only cheaper than renting (in the short-term) if you assume house-prices will continue their improbable rise. Of course in the very long term renting is usually more expensive, otherwise why would landlords bother?

I live in a London property allegedly worth £800,000+ with a rent of £1,750 a month (i.e. about 2.5% of the value). The £400 a month service charge is paid for by the landlord, as are the regular maintenance and plumbing costs and the new boiler we had fitted etc. (i.e. rent is really nearer 1.5% of the value) I could bought a similar property, but chose to invest the money and pay the rent with the derived income (with plenty to spare) Renting is far cheaper if you do a proper risk-based comparison instead of this simplistic headline grabbing school-boy maths.

All families should OWN their homes even if its only a mud hut . Buy to let is very wrong and with the present financial situation many who have used this to make money will get their fingers burnt .

Are you living in this world Bill Lawson? Not everyone can buy and why is it wrong to provide shelter to those that are not able to buy their own property?

Do you expect the landlord to provide acommodation free?

So all the councils that have let out rented properties for many years, paid for by the taxpayer are wrong not to mention housing associations that rent out property to the needy, again from money invested by people looking for a return on their investment. They are no different to private landlords, each have invested in properties to rent out, in the hope they will see a return on their inestment. Many private landlords have lost their investment, it is not an eaeasy ride.

Thick headed people like you make me sick, you sit on your high moral horse, making stupid comments. The real truth is, you can't afford to buy or you have not got the guts to risk your own money.

Lorna. Sorry about the "school-boy maths" remark. That wasn't aimed at you. Perhaps the headline should read:

"Areas where mortgages are cheaper than rents" or

"Areas where the cost of renting the money required to buy 75% of a property is less than the cost of renting 100% of a property (and have someone else take all of the risk and pay the stamp-duty, initial costs, taxes and running costs)"

Not quite such a catchy title though perhaps?

I'm with Anonymous 6 and Jonathon. This whole article is a bit pointless given that it is based on unprecedented never seen before interest rates of 0.5%. Given how long they have been at that level it is more surprising that we are not experiencing rocket fuelled house price growth of 20-30% a year. If interest rates were to go back up to 'normal' levels of 5-10% then it'd be interesting to see how 'affordable' houses look then.

BTW the article doesn't take into account, that the boom in top-end large country house rental demand might be because the smart money is getting out of property ownership altogether till after the forthcoming deflationary crash! I live on Dartmoor and roughly 50% of the £1m plus houses are on the market at the moment in our area. No sign of buyers though!

Renting at £2000 and mortgage of £1850. All is well until you have a void/non-payment, then suddenly you have to find a spare £1850pm

Sorry DOUGLAS did I touch a nerve , I built my house and I am not a builder in 1968 and still living in it (now worth £500,000) Young people try to buy at the bottom of the market but are priced out by people like you that inflate property prices. There is nothing wrong with council houses I grew up in one. get real yourself.

Congratulations Bill Lawson REAL Sane comments.

As for Douglas I suppose it has escaped your attention, that people who buy lo let do NOT enter into the transaction to provide some POOR sole with a house, but to make money out of them. Also buying to let only helps to inflate prices which makes it even less possible for the poor that you are fleecing to buy. However I am sure that you sleep well.