Good news for renters: It's now cheaper not to own your home
Getting on the property ladder is often considered to be one of the top life goals to tick off the to-do list, but in happy news for those for whom home-ownership is a distant pipe-dream, it is now cheaper to rent than buy a property for the first time in more than six years.
It turns out the coronavirus pandemic may have had a role to play in this reversal of fortunes.
Research by the estate agency Hamptons suggests that before the first lockdown in March 2020, people buying with a 10% deposit would have been better off than renters by £102 a month.
But last month, the figures revealed the average private sector tenant was better off, spending £71 a month less in rent.
There are now only four areas in the UK where it is cheaper to buy than rent - the North East, North West, Yorkshire and Humber, and Scotland.
Watch: Am I wasting my money by renting?
In contrast to this, at the beginning of 2020, it was cheaper to buy instead of renting in every nation or region in the UK.
Interestingly, Hamptons says the change comes despite a 7.1% rise in average rents over the past 12 months.
London has seen the largest shift since the start of the pandemic. Here, a buyer putting down a 10% deposit on a property would have been £123 per month better off in March 2020, whereas in May 2021 renters are spending £251 less per month than homeowners.
Read more: Woman transforms kitchen on £500 budget with clever B&Q and Poundland hacks
So what's causing the property switch?
Aneisha Beveridge, Hamptons' head of research, said the pandemic was responsible for reversing this six-year-long trend.
"A year ago, lenders were either increasing their rates or withdrawing higher loan-to-value mortgages altogether," she explains.
"For first-time buyers in particular this pushed up the cost of paying a mortgage, if they could get one at all, to well above the cost of renting."
Beveridge added it's likely the balance will swing back somewhat towards buying, particularly as mortgage rates come down, but this would likely be partly offset by rising house prices.
"And while interest rates are falling, they're still considerably above where they were pre-pandemic on higher LTV (loan-to-value) loans," she continues.
"Despite this, we expect the gap between renting and buying to close over the remainder of this year, moving back towards longer-term levels in 2022."
Watch: How much money do I need to buy a house?
Chris Salmon, operations director of conveyancing specialists Quittance Legal Services says a combination of the Stamp Duty Tax Holiday and 5% deposit mortgages has seen a surge in demand among prospective buyers.
"People who were planning to remain renting for a few more years are now opting to buy earlier in an attempt to take advantage of these two opportunities," he explains.
"This large scale switch in renters suddenly wanting to buy, and to buy right now, is the key factor in renting now being more affordable than home ownership."
Salmon says the fact that several of the causes of rising house prices are temporary means that some buyers may be at risk of their property falling into negative equity, which means renters could again be at an advantage.
"Not having to worry about house prices potentially falling once the stamp duty holiday ends, and potentially being further affected by the end of the furlough scheme, is undoubtedly an advantage of renting over buying."
Read more: Life's a beach (hut) for the owner who sold for nearly £50,000
'I wouldn't have it any other way'
Nell Mead, 43, a physiotherapist from London, believes renting has enabled her to live in a much nicer house than she'd ever be able to afford.
"This time last year I was sharing a house with lovely friends," she tells Yahoo UK. "However, I'm a physiotherapist, so when I had to see my patients online during lockdown, inviting them virtually into my bedroom didn't feel very professional!
"But I didn't have enough cash for a deposit, and even if I did, I'm self-employed, so it would be hard to get a mortgage. So I moved into a rented house on my own, and I was lucky enough to find an amazing little house in London, which I would never be able to afford if I were trying to buy.
"Renting has also allowed me to try out different areas, so if and when I'm ever able to buy, I'll have a better idea as to where I want to be."
Read more: Zoopla reveals the properties we’ve been dreaming of moving to during lockdown
How to successfully decorate your rental property
One of the things that often puts people off renting over buying is the thought that you may be restricted on how you can decorate your home.
But Lisa Evans at MyJobQuote.co.uk has put together some top tips on how to decorate your rental space without worrying about losing your deposit.
Invest in temporary décor
If your landlord is particularly strict about making any changes to your walls or worktops, then why not try temporary decor? This includes temporary wallpaper which is very easy to put up and remove. You can hang it anywhere you wish; on a feature wall in the living room or even at the back of a bookcase to brighten up the decor.
Update your windows
If your windows are naked or you have drab window dressings, then you may want to consider updating them. The best and cheapest way to do this is by installing blinds, which you can do yourself or hire a professional to do it for you. There are a wide range of designs to choose from, although roman and roller blinds tend to offer an array of choices and are also very easy to put up and remove.
Plant power
One of the simplest and cheapest ways to update the decor in your rental home is by adding greenery. Some of the best low-maintenance plants include spider, aloe and ivy, which will also inject an indoor-outdoor feel.
