| The average price of a home in the UK has risen by | | | | homeowners, when it comes to handing out loans, |
| nearly 400% of the last 20 years. Back in 1987, the | | | | especially mortgages. Finding all kinds of loans is much |
| average price of a home was under £50,000; | | | | easier if you already have a mortgage, as it is |
| twenty years later in 2007, the average price has | | | | possible to use any equity in your home as security |
| pushed just over £200,000. | | | | against a loan. |
| That can be a frightening prospect for any potential | | | | Tenants pay rent for which they never see return, |
| buyer, but for a young couple that are considering | | | | homeowners on the other hand, eventually will own |
| purchasing their first home. It may be an incredibly | | | | the house, free and clear. This will give them a huge |
| daunting prospect to consider being involved in such a | | | | cash amount should they choose to sell. Alternatively, |
| large transaction. | | | | they will have no rent to pay for the rest of their |
| Last year the number of people who owned their | | | | lives giving them more available cash every month. |
| own home in Britain went down by 84,000. This was | | | | The recent near disappearance of the hundred |
| caused mostly by increased UK home prices that | | | | percent mortgage, has its downside in that it may be |
| have risen at an alarming rate since the new century | | | | more difficult for new home buyers to get on the |
| began. | | | | ladder. Nevertheless, on the plus side, it means that |
| The rise in house prices has far outweighed the rise | | | | once the new homeowner has their mortgage their |
| in annual salaries over the last 20 years. Many | | | | home is far less liable to be repossessed. This is |
| homeowners have found themselves in a situation | | | | because it is also less liable to slip into negative |
| where they simply can no longer maintain their | | | | equity, meaning it is worth less than the owner paid |
| mortgage payments on a home they purchased | | | | for it. |
| twenty years ago. | | | | Another advantage of this down market at the |
| In the same period, the rental market for houses has | | | | moment is houses are now actually cheaper than |
| boomed as many couples find that in the short term, | | | | they were a year ago. Enabling those who have |
| they can pay less per month for rent than they | | | | saved a deposit to find a home at a lower price than |
| would have to pay for a mortgage. | | | | they would have paid last year. |
| A couple of other advantages are that you are not | | | | Once the market moves upwards again, as it always |
| responsible for major repairs, which can add up to a | | | | does, the new homeowner will be in a much better |
| considerable amount of money over time. Therefore, | | | | position. Having paid less for their house, and also |
| it would seem as if renting a property at the | | | | owning a bigger percentage of the equity in the |
| moment is a far more viable proposition than | | | | property. |
| purchasing your own home. | | | | There are advantages at the moment to renting |
| However, there are other considerations, to keep in | | | | over buying but they should be carefully weighed |
| mind when comparing purchasing and renting on a | | | | against the much more rewarding long-term benefits |
| long-term basis. | | | | of home ownership. |
| Lenders have always been less kind to tenants than | | | | |