Mortgage cheaper than rent?

You're still not making a fair comparison.

You would need to know the cost of an interest only mortgage. And then take into account the value of the increase in the equity in the house ... how do you plan to do that?

Most people would be on a repayment mortgage so they are repaying a loan and also investing in an asset that will continue to grow.

In my area mortgages are cheaper. Don’t forget that rent will always increase with the value of the home, whilst will be static with a mortgage. Therefore even 5 years after a purchase even if they were both the same to start off with, the rent will likely have increased by 10-20% whilst the mortgage is the same plus some equity built.

The landlord would not be making a loss because the Tenent is paying for the landlords set which they will own at the end of the mortgage. It is essentially like the tenant putting money in a savings account for the landlord every month.

Yes. No. Maybe. It really depends on the circumstances, mainly location. Rents are fairly inelastic compared to house values. They're generally very focussed on number of bedrooms, whereas purchase prices vary more. So you can have a 3 bed house worth £200k that earns X rent, but a relatively short distance away (next town perhaps), there could be another 3 bed house worth 350k that only achieves the same X rent.

I suppose you could argue that you should compare the interest part of the mortgage to rental costs, since the repayment is buying equity. The big advantage comes once there mortgage is paid off, whereas a renter is going to have to keep on paying.

People also tend to overlook the other costs associated with home ownership i.e. maintenance. When you rent, all that stuff is included - boiler servicing/replacement windows, flooring, roofing and external maintenance etc, etc. That all adds up, probably averages around 1k to 2k a year over the longer term?

Dead money

Mortgages used to be cheaper than renting, but it's definitely the other way around now where I am. We currently rent and we're having to prepare for our monthly housing cost to double when switch to a mortgage.

In Scotland it absolutely is.

atleast half of what I would pay for renting

I gave my daughter money for the deposit. She’s now saving £400 a month paying mortgage rather than rent!

It depends on your mortgage rates, deposit size and the property prices in the area, demand for rental properties in the area, loads of factors.

Surely that would depend on the area and the property. I know people who rent and I've never paid that much for a mortgage

Surely if you're making this about fair comparisons and want to include deposit then you need to factor in the years and years of rent that tenants will continue to pay after their owner pays off their mortgage and fully owns their home?

not only can it be cheaper, but you eventurally pay it off and dont have to pay anymore

Who did the ones who sold sell to?

There's an assumption that LL selling up reduces available housing but I'm not sure that holds.

A LL pulling out either sells to an owner occupier, so one fewer rental property available but also one fewer rental property needed, or they sell to another LL so the property is still available to rent.

The only way the new rules actually reduce property available is if LLs keep hold of properies but leave them vacant, which seems not likely in the long term (but may happen in the short term eg if they want to sell but are holding out for a higher price than they can get, or are working out how/if they can meet the regs before reletting).

Are you looking at costs of an interest only mortgage though, where you would walk away with no house at the end, same situation as renting

Or are you looking at costs of repayment mortgages where you would actually own a house at the end?

I agree with you about the balance of individual v multiple property owning landlords.

But I was responding to your generalisation to the OP (who I suspect rents out a number of properties):

NemesisInferior · Today 11:14
I'm sorry, what?
What landlords in any sort of sane mind are there that are happy to make a loss on renting out property?

There are plenty of circumstances where a short term loss is a sane decision. Nowhere has the OP argued that a long term overall loss is a sound business plan.

When did you buy though, because eventually your mortgage payment and general maintenance will work out cheaper than renting the same house
12/13 years ago I would have been paying about the same in mortgage repayments as renting similar house, now rent for a similar house would be 2.5x what I pay in mortgage repayments which means even with additional maintenance still works out cheaper for me to have bought rather than rent

My DS was paying £1600 a month rent for 1 bedroomed flat .
Hes recently bought a two bedroomed flat and mortgage is around £950 . Small deposit .

Absolutely for me.
The house next door is being rented out for more than double my mortgage.

Our deposit was £9000 our house was £180,000. We did a 5% deposit. Yes it’s more affordable than some areas but the house prices where I live haven’t gone up massively.

We have lived there for 8 years now.

A £260000 flat costs £1450 a month to rent in my area.

If I bought it the mortgage would be around £1250 with a 25k deposit. It is more expensive to buy undoubtedly.

The service charges and ground rent cost a further £275 a month then you need to factor in maintenance.

However after five years or so it becomes cheaper to buy as inflation increases the rents and the value of your money depletes, and salaries increase.

If a landlord factors in a full refurbishment every 15 to 20 years there is very little profit depending upon increases of property prices and yields etc.

I'd say there's a £50 difference between my mortgage and what I'd get in rent for my house.
That £50 doesn't mean much when I'm also responsible for all upkeep and repairs and had to put a deposit down first.

A 3 bed semi in my area is around £1000 per month. My mortgage for a very similar house in same area is £700.

But how much was your deposit?
What is your ltv?

When did you buy it?