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Archive for Rental property

Gap between cost of buying and renting narrows

Friday, May 2nd, 2008

Whilst it is still cheaper to buy a property and pay a mortgage over 25 years than it is to rent a property, the saving made by homeowners has gone down by 75% in the past year according to new research.

Figures show that over a traditional 25-year period of a mortgage, buying a property costs an average of £437,925. This figure is only slightly ahead of the average for renting a property for 25 years which cost an average of £443,736.

While in past years buyers could have expected to save somewhere in the region of £24,000 over 25 years, the impact of rising interest rates and rising house prices means now that the difference between buying and renting has fallen to just £5,811.

In some areas of the UK it is actually now cheaper to rent a property than it is to buy one.

Northern Ireland is a particularly bad area for buying when compared to renting. Property prices have gone up by 40% in the past year meaning that the average house buyer will now pay £572,814 for their property over 25 years while renters will only pay £392,097 for renting the property over the same period. This means by renting a property you will save a massive £180,717 over 25 years.

While the figures do include maintenance costs they do not include set-up costs for home loans. The figures also suggest that it would be cheaper to rent a property in Wales, the north-west of England, Greater London and Yorkshire.

Obviously these figures look at the matter solely from the view of payouts, and not from the security gained from home ownership. Additionally, equity grows as home loan repayments are made and as house prices rise, allowing homeowners to borrow secured loans against their property for both property improvement and equity release purposes.

Posted in Borrowing, Consumer Credit, Equity release, Financial news, Homeowners, House buying, Housing news, mortgages, Property, Rental property, Secured loans, Spending, UK Finance | No Comments »

Dorm Decoration

Tuesday, December 4th, 2007

It is amazing how many parents invest tens of thousands of pounds into their student’s education without ever thinking about their living arrangements. In fact, many students are left to scramble for whatever they can afford, and decorate with left over pieces and junk.

Our environments play a vital role in our emotional wellbeing.  Most parents know this. The concept of borrowing a secured loan, or a mortgage, to redo a teen’s room, a den for entertaining, or the basement, makes common sense.  But, parents rarely see the importance of treating a dorm with the same respect and concern.

Students need a place to unwind and relax, but it must also be an individual statement that lets them continue to grow emotionally, amid the confliction and confusion of a dorm, or student housing.

Student housing décor goes far beyond picking a wall colour and a couch. Many parents are shocked to realise that student housing often lacks a respectable bathroom.  Adding a pure water dispenser, a new toilet seat, and fixing the window coverings can be expensive, but they are vital to a student’s well being.

A secured loan is the best way to do this. It frees enough money to do the job right, in the least amount of time.  And, it can be paid back quickly, without high fees and penalties, depending on whether the property was leased for one year or longer.

A property that is leased for more than one year offers the parents some leveraging. They may be allowed to upgrade the bathroom, add a heating unit, and improve elements which would be the landlord’s responsibility if the housing was a permanent residence.

Posted in Borrowing, Consumer Credit, Equity release, Financial products, Home Improvements, Homeowner Loans, mortgages, Personal loans, Property, Remortgaging, Rental property, Secured loans, Spending, Student debt, UK Finance | No Comments »

Fight Fraud

Friday, July 27th, 2007

The devastation caused by mortgage fraud is becoming a major problem in the UK. It costs lending companies and homeowners millions of pounds each year. However, most of it cannot be prosecuted, because many of the fraudsters are from foreign countries that do not collaborate with UK enforcement authorities.

Mortgage fraud takes many forms, including stealing property using various methods of deception, obtaining a money transfer by deception, signing mortgages, and selling third party homes.

Victims are left with no hope of proving that they were not involved in the scam and are accused of hide the proceeds of the scam. Most victims hope that they are protected by banks and loan lenders, but sadly this is not always the case.  Many people have been left with 40 year mortgages in their name and what appears to be a history of bad debts and defaults on secured loans.

The Department of Productivity, Energy and Industry (DPEI) closed a buy-to-let scam, in 1995, which promised to help investors make money in the property market.  Three companies linked to the scam ended up at the High Court, following confidential investigations by the DPEI.

These companies took “substantial sums of money” and promised that they would help clients to build a portfolio worth £1 million a year.

In 2005, DPEI Minister Gerry Sutcliffe said: “These companies knew that their clients, who had all invested substantial amounts of money, couldn’t make anything like the returns that were promised. The schemes were completely misleading and set up with the sole aim of parting people from their money.”

Consumers are warned to avoid any investment scheme that promises too much, or very little risk. They are also warned to avoid anything that asks for personal information before explaining the company’s intent.

Posted in Bad Credit, Banking, Borrowing, Buy to let, Consumer Credit, Consumer debt, Financial news, Fraud, Homeowners, House buying, Housing news, mortgages, Personal debt, Property, Rental property, Secured loans, UK Finance | No Comments »

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