The smart money rents
20 April 2015
While it is a common aspiration to get a foothold on the property ladder, you could argue that, in the current climate, the smart money rents in London. Indeed, Market Watch columnist Brett Arends recently stated this may be the case in The Wall Street Journal. Moreover, those who rent a room rather than a whole flat or house, such as those using the services of Myrooms.co.uk, can save extra money towards a deposit to buy their own place when the property market becomes less volatile.
While prices for buying prime central London property soar – house prices in the capital’s centre have doubled in the past 10 years and are currently rising 1% per month according to estate agents Knight Frank – the average cost of renting these places is going down, Arends argues. Property owners are receiving less yield for their rentals. Added to this, when interest rates inevitably rise, mortgage borrowers are more vulnerable. Is it worth buying now if the property price bubble is still inflating?
While news stories trumpet spiralling property prices, particularly in London, private rental prices paid by tenants in London increased by only 1.4% in the 12 months to March 2014, according to figures from the Office of National Statistics.
Which is not to say that renting is cheap in the capital; a prime position in one of the world’s most desirable cities comes at a price. A study by HomeLet has found the average cost of renting a home in Greater London stands at £1,316 – half of the average Londoner’s take-home monthly salary of £2,603. Unless wages rise substantially by 2016, this ratio will increase as rents in London are predicted to reach an average of £1,625 a month within the next two years.
With that in mind, what is currently the best way to keep more of your money in your own pocket? Take the sting out of renting by taking a room in one of Myrooms.co.uk’s central city houses or flatshares. Pitched at the young professional, they allow you to make friends, remain flexible and save more of your own money for the future.
For the latest flatshare and house share opportunities in prime central London accommodation, visitwww.Myrooms.co.uk