Home ownership cheaper now than six years ago
If you are not already on the home ownership ladder now is the best time to own a home since before the financial crisis caused so much hardship and created one of the most difficult times to get a mortgage. However, it is rather a surprising fact that in spite of rising house prices, as well as food inflation, due to record low mortgage repayments today, the cost of owning a home has fallen.
The money that is being saved through lower mortgage repayments has more than offset the higher price of home as well as inflation that has been witnessed at supermarkets. Taking London out of the equation, if we compare today to 2007, the ability to buy a house has greatly improved. London as always bucks the trend as house prices have been rocketing over the last few years. The picture there is different; figures show that the average house price in London reached an all-time high of £514,000 in July.
To give an example of the new affordability seen now, in 2008 someone borrowing £150,000 would have to repay £1,022 per month, today that figure could be as low as £600 leaving them with over £400 per month extra cash.
The down side of this of course is when interest rates rise, which they surely will and this is expected to come in the spring of 2015. However, the rise should not be too great and it is generally anticipated that wages will have risen, so this rise should take care of the extra money needed to service the mortgage.