Buy Or Rent?
Friday 13th December 2024
It is a common assumption that renting in London is more expensive than buying.
Let me smash that myth for buying in 2025 in Central London.
I have done a little illustration of the relative cost of renting versus buying a 2-bed flat in Chelsea worth £1 million.
I have chosen £1 million because it is a nice round number, and a Chelsea flat because that is at our core business but the model can be applied anywhere in the Southeast of the UK, and to houses.
I have not bothered to include council tax and utilities as they should be the same for an owner or tenant.
So, the conclusion is that the annual outgoings of buying are nearly double those for renting.
In reality the £25,000 per annum capital repayment of the mortgage is like a savings plan but even setting that aside it is would still be £53,250 p.a. which is 33% per annum more expensive to buy than to rent.
So, you had better hope for some serious capital gain to make it financially sensible to buy a property.
Has that bust the myth?
Until next time……
PB
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