Buying a Lewisham Home is Still £3,008 a Year Cheaper Than Renting
With mortgage rates tripling over the last 12 months, one could be forgiven for thinking buying a Lewisham home as a first-time buyer would out of the question.
Yet, what if I told you, it is £3,008 a year cheaper to buy a Lewisham home as a first-time buyer than renting, would you be surprised?
With mortgage rates tripling over the last 12 months, one could be forgiven for thinking buying a Lewisham home as a first-time buyer would out of the question.
Yet, what if I told you, it is £3,008 a year cheaper to buy a Lewisham home as a first-time buyer than renting, would you be surprised?
The average 2-bed home in Lewisham is worth £436,278.
The monthly homeownership cost of such a Lewisham home (including the mortgage payments, property maintenance, and insurance bills) comes to £1,674.37 per month compared to £1,925 per month for the same Lewisham house for rent.
Because Lewisham rents have risen like a rocket ship in the last two years, this has helped to tip the balance in favour of homeowners.
This is based on the average first-time buyer mortgage with a deposit of 23% (that being the average last year for a first-time buyer nationally) and industry recognised amounts on property maintenance, and insurance bills.
Yet I thought 23% seems quite high, so I thought what it would cost with a smaller deposit of 10%.
Before I answer that, I believe the ‘buy versus rent argument’ is more than a simple pound notes question. Let me expand.
Renting a home in Lewisham has several advantages.
Firstly, renting allows for short-term living arrangements, with tenancies often lasting just six months. This provides flexibility for those who want to try out a new location or property. Additionally, renters are not responsible for maintenance costs, including broken boilers, and may have the option to rent a furnished property. There are also lower upfront costs, as renters do not need to pay legal fees, maintenance costs, stamp duty or a mortgage.
However, there are also some disadvantages to renting in Lewisham.
Lewisham tenants face large upfront costs, including a deposit and first month's rent - and landlords may increase rent. Renters also lack control over maintenance and may have to move if the landlord decides to sell the property.
Additionally, they may have to battle landlords to receive their full deposit back.
On the other hand, owning a Lewisham home provides long-term security and the ability to decorate and control maintenance. Even though mortgage interest rates have more than tripled in the last 18 months, mortgages are currently still comparatively low compared to the long-term average. Let’s not forget …
Lewisham homeowners can benefit from property price increases.
However, saving for a deposit can be difficult and homeowners are subject to the housing market and price fluctuations. They must also pay mortgage and legal fees and must foot the bill for repairs.
Let’s be frank, both renting and buying a Lewisham home have advantages and disadvantages.
Renting offers short-term flexibility and lower upfront costs, while owning provides long-term security and control over maintenance.
It is important for individuals to carefully consider their financial situation and personal preferences before deciding.
So, let me look at Lewisham first-time buyers who have a 10% deposit.
It is £613 a year more expensive to buy a Lewisham home, as a first-time buyer with a 10% deposit, than rent.
Yet when that annual figure is broken down into a monthly figure, surely paying £51.10 a month, with all the advantages mentioned above, is still worth it to buy your own Lewisham home?
To conclude, whether it's worth buying a home or renting a home in Lewisham depends on your personal circumstances and priorities.
While owning a home can offer security and stability, it's important to consider factors such as your future, financial situation and long-term goals.
Before deciding, take the time to ask yourself the right questions and weigh up the pros and cons carefully. By doing so, you can ensure that you make a choice that is best for you and your family’s future.
These are my thoughts, what are your thoughts people of Lewisham.
Written By Neil Raja
Neil Raja ANAEA, MARLA
Director
M 07930501099
P 02088524441
E neil@charles-knight.com
Charles Knight Estate Agents
250 Lewisham High Street, London, SE13 6JU
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