Tenants in Chelmsford would be better off by up to £809,120 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 wth an asset after 25 years.
Looking at the costs of buying or renting an average Chelmsford house priced at £334,475, buyers gain over £800,000. Those who purchase higher priced properties could find themselves being property millionaires.
The following table shows the lifetime difference between buying and renting an average house in Chelmsford:-
|District||Monthly rent (initial)||Monthly Mortgage cost||Lifetime gain/ loss from renting||Lifetime gain/ loss from buying||Lifetime difference between renting/ buying|
|Chelmsford||£ 947||£ 1,232||-£ 440,437||£ 368,683||£ 809,120|
Chris Bladon, Managing Director of Countryside’s New Homes & Communities Eastern Region, said:
“The difference between renting and buying is creating a property wealth divide in Chelmsford. We understand that one of the key challenges that tenants are faced with is saving up for the deposit. But, with help-to-buy and stamp duty relief for first-time buyers this has made buying a property far easier for first-time-buyers.
He added: “Apart from being a good investment for the future, home buyers in Chelmsford can look forward to benefitting from a wide choice of shopping, dining and leisure facilities. Some of the best performing schools, like King Edward VI Grammar School for Boys and Chelmsford County High School for Girls, offer further advantages for those with families.”
Buyers interested in purchasing a home in Chelmsford have many options available with Countryside. Hanbury Place, a collection of two to four bedroom traditionally styled houses in Broomfield, provides the best of both country and city living in an ultra-convenient location on the doorstep of the city of Chelmsford. Set amongst woodland and beautifully landscaped grounds, each home blends the best elements of traditional local architectural styles and comfortable modern day living. Four bedroom homes are currently available, starting from £459,995.
Alternatively, Countryside’s Beaulieu development has both traditional and contemporary homes to suit any needs and preferences. The latest phase of development there, Beaulieu Keep, offers buyers three to five bedroom houses with well-planned interiors and exceptional internal specifications. All of this in an environment that boasts striking public art installations and a beautiful parkland location. Three bedroom homes at Beaulieu are available starting at £509,995 with four bedroom homes from £714,995.
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%.