Residents in Hertfordshire would be better off by up to £855,477 on average over 25 years if they bought instead of rented a typical property, according to research by Countryside.
Researchers compared the lifetime gain or loss of someone renting a property to the lifetime gain or loss of buying an average home. Because buyers will own an asset once they have paid off their mortgage, this is creating a remarkable divide between buyers and renters, leading to a property divide whose wealth will be substantially less than those buying over a 25 year period.
It may seem as though renting can be the cheaper option, but overtime, the property winners are those who buy and are left with an asset after 25 years. Looking at the costs of buying or renting an average Hertfordshire house priced at £403,949, buyers can gain over £850,000 after 25 years. This average house price reflects the latest figures published by the UK Land Registry under the category “all properties”.
The following table shows the lifetime difference between buying and renting an average house in Hertfordshire:-
|District||Monthly rent (initial)||Average Monthly Mortgage payment||Lifetime gain/ loss from renting||Lifetime gain/ loss from buying||Lifetime difference between renting/ buying|
|Hertfordshire||£ 1,398||£ 1,515||-£ 440,438||£ 415,039||£ 855,477|
David Everett, Managing Director of Countryside’s New Homes & Communities Central Region, said:
“With no shortage of picturesque villages, Hertfordshire is becoming an increasingly popular living destination for those wanting a peaceful and tranquil setting to call home. The beautiful and historic market town of Bishop’s Stortford lies within the commuter belt and has a range of primary schools, making it a perfect destination for families that want to escape the stress and high costs associated with life in London.”
Buyers interested in purchasing a home in Hertfordshire have many options available with Countryside at St. Michael’s Hurst. Nestled within beautiful Hertfordshire countryside and on the outskirts of Bishop’s Stortford, the development offers an exceptional range of 2,3,4 and 5-bedroom luxury homes. One of the highlights on the development is The Winchester, a stunning 4-bedroom house with roof terrace and turfed garden available for £599,995. Boasting an attractive contemporary design, it comes with an excellent specification as well as integrated appliances and flooring throughout.
Countryside has calculated the average rent using figures from the Government’s Valuation Office Agency and modelled how they are likely to increase in line with projected house price rises; it then modelled current and projected mortgage rates over a 25-year period using 25-year swap rates and current MFI bank margins. It used current house prices from Land Registry and modelled potential house price rises and capital gains using projections from the Office of Budgetary Responsibility for the next six years and a conservative long term house price annual growth rate of 3.7%.