Research from Mortgage Advice Bureau Swindon has found that it is cheaper for Swindon tenants to purchase a new property than rent from a landlord.
As it has become increasingly hard for young people to get their foot on the property ladder, high monthly payments to landlords means that renting is near-unaffordable. Help to Buy ISAs and other government schemes allow them to save for a deposit, ensuring that buying a home quickly becomes a practical option.
Jeremy Morcumb, owner of Mortgage Advice Bureau Swindon, commented: “There is a strong demand for rental properties, but a real lack of supply. Recent legislation has led current landlords to push up rents and put potential landlords off altogether, so there are fewer homes available to rent.”
“In many cases, rental payments have increased by £100 per month or more over the past year in Swindon,” he added.
A number of young tenants believe they are stuck in limbo on the rental market, making them unable to buy their own property. Lenders who enforce high deposit requirements has become the most common reason for tenants feeling unable to take out a mortgage.
The luxury of receiving financial assistance from parents and guardians is not available for everyone. Saving for a deposit is difficult with high rents, while poor debt management equals low credit scores.
“Without family support, the minimum deposit is 5%. Many of our clients are scared of mortgages and in many cases, believe they are unable to buy,” Morcumb added.
“The first thing we do is educate people on how mortgages work and how people can go about buying a home. There’s an old saying: ‘knowledge is power’. We believe that is very true.”
Mortgage Advice Bureau Swindon aims to help clients get on to the property ladder by setting regularly-reviewed plans and giving advice. As a result, clients are able to take all-important first steps towards owning their first home.
Morcumb offered some final advice. “We recommend that young people set a savings target, then organise a Direct Debit to channel cash into a savings account and watch as the money for a deposit builds up.”