Despite widespread belief that owning a property is more expensive in the long run, a new report has shown rents are exceeding mortgage costs in Liverpool city centre.
The survey commissioned by the St Paul’s Square development in Liverpool’s commercial district showed that tenants paid 37% more than homeowners.
Whilst 71.4 percent of tenants paid between £500 and £600 per month in rent, almost 83% of homeowners paid less than £400 in mortgage repayments.
The report comes after interest rates were held at the record low of 0.5% by the Bank of England this week.
Pauline Sangster, Residential Sales and Marketing Manager for St Paul’s Square, said: “Despite the fact that the costs of owning a property are at an all time low, there is widespread belief that owning a property is going to be more expensive than renting. In fact, it can be far more cost effective.”
Ironically the report also found that 34% of city centre tenants felt that renting was cheaper than buying, and 17% said they can’t afford to buy in the current economic climate. Martyn Green, Partner at King Sturge, said: “Rising rents are due to high tenant demand as a result of the market being flooded with residents who aren’t able to find a mortgage that suits their situation.
"Low interest rates have reduced the monthly cost of home ownership significantly.
“Although the level of mortgage products for first time buyers is steadily increasing, St Paul’s Square is making the doorway to entry in the housing market even easier for first time buyers or owner occupier purchasers who are mortgage free.
"The development’s Shared Equity Scheme requires a minimum of 5% deposit, and enables buyers to move into one of the development’s one or two bedroom apartments for just 80% of the full purchase price.
"The remaining 20% is secured against the property with an interest free loan for up to 10 years. This is NOT shared ownership and the buyer will still own 100% of the property.
“Buyers should look into different purchasing options and schemes before deciding not to buy, as there are many available on the market at the moment.”
Resident Tim Morgan bought a one-bedroom apartment at the St Paul’s Square development last year.
He said: “As a first time buyer who rented before purchasing my property, I can honestly say that my mortgage is around 25% cheaper than a typical rent payment for a similar size apartment in the area.
"My apartment also includes secure parking saving me an additional £100 a month. For me, buying has been far more cost effective than renting and I’ve made a solid investment for the future."
A two-bedroom apartment starts at £119, 960, which is 80% of the open market price of £149, 950 under the Shared Equity Scheme.
For more information or to request a viewing please contact King Sturge on 0151 242 6490.
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