Bunk looked at the cost of a rental deposit and the cost of renting for a decade. Bunk then compared this cost to the financial barrier of a mortgage deposit, and the cost of monthly mortgage payments over a 10-year fixed term at a rate of 2.58%.

Across the UK the average monthly rent is £676. With the newly introduced five-week cap, that means a rental deposit costs an average of £845 and renting at this average monthly rate over a 10-year period would cost a total £81,120 – a total cost of £81,965 when including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680. This leaves a loan amount of £204,118 and at a 10-year fixed rate of 2.58% would mean a total repayment of £231,798, a total of £254,478 including the deposit.

The current average UK house price is £226,798 and so a 10% deposit would set you back £22,680.

This means, that renting is £172,513 cheaper than owning a home over a 10-year period when it comes to the upfront and monthly costs, with the one big difference being the bricks and mortar investment secured at the end.

This saving is most notable in Cambridge with a difference of £341,090 over 10-years between renting and buying, with the saving in London also topping £316,247.

In Bournemouth, renting over 10-years is £183,376 cheaper than buying, with Bristol (£177,613), Edinburgh (£166,547), Cardiff (£143,984), Southampton (£138,617), Portsmouth (£137,240) and Plymouth (£128,480) all home to some of the biggest savings.

The lowest saving is in Glasgow where renting for 10-years is just £43,145 cheaper than buying in the city.

Co-founder of Bunk, Tom Woolard, commented: “Of course the big difference between renting and buying is that one leaves you with a sizable financial asset as a reward for your years of hard work making mortgage payments.

However, more and more of us are opting to rent long-term and what we wanted to highlight is that while the rental market is generally viewed in a negative light due to high rental costs, it is actually a considerably cheaper option when compared to homeownership, even with almost record low-interest rates. 

Not only this but those that feel resigned to renting due to the high financial barrier of buying actually have a much better opportunity to save compared to those paying a mortgage. Whether they choose to use this for a deposit further down the road or simply to enjoy a better quality of life is up to them.”

When the hypothetical family from number 28 parade the street in their new Mercedes GLE, doing somewhat of a victory lap, Google is just seconds away as we scout our next big purchase.

Driving the car of our dreams just isn’t a feasible option for many, due to the reality of things like family life and other important household costs. But, as John Paul Getty once remarked, “if it appreciates, buy it. If it depreciates, lease it.” Many throughout the UK have taken the once-oil tycoon’s advice and done just that.

It’s a well-known fact that the value of a new car is known to drop massively within the first year, and research from AA suggests that after three years, a car will have lost 60% of its original showroom price tag at an average of 10,000 miles per year. The first-year loss is definitely the worst, with a deduction of around 40% being made by the end of the first 365 days. Obviously, there are different ways of putting the brakes on depreciation. Keeping the car clean, regular servicing in accordance with manufacturer’s guidelines, and one eye on the mileage gauge, will all go a long way in reducing potential losses.

But could we be doing something different?

PCP

An impressive 78% of buyers nowadays opt for a personal contract purchase (PCP), proving itself as an increasingly popular finance option. Admittedly, it goes against everything our parents have told us to do, in regard to owning our own car, but if you can battle those initial demons, then we’re here to show you why this might be for you.

Cost

Some people take pride in saving up in advance to buy a new car, like the Mercedes A Class, but not all of us have the time (or or patience!). With PCP, the payment is broken down into three major chunks. Firstly, you’ve got the initial deposit which is usually 10% of the car’s showroom value. Secondly, the monthly payments which will include enough to cover the depreciation costs incurred throughout the contract. Finally — and this is where things change once the final payment of the contract has been made, you get the option to either return the car or take a new one on a new contract. Or, you can pay a balloon payment and then the car is yours.

The monthly repayments of a PCP contract are significantly less than the alternative finance deals available. The option then presents itself is to drive a car that you would initially have deemed to be significantly out of your price range. Therefore, if you don’t have a big deposit and want lower monthly repayments, then this might be exactly what you’re after.

Please check this for new and pre-owned cars in Dubai at https://exoticcars.ae.

Mileage

Heavy traffic, congestion charges and the worst culprit of all — parking. Three reasons many drivers in the UK have steered away from the daily commute in the car and opted for public transport. A decade ago, our decision when purchasing a car will have depended hugely on our day-to-day usage — but when that isn’t the same, why should the choice be?

On average the annual mileage of a car in the UK is 7,900. One drawback of renting your car through PCP is that is that when initially taking out the contract, you are given a mileage restriction and if you exceed this, you will be penalised. If, however, you would consider yourself to be one of those average UK drivers, then PCP offers no qualms. The opportunity to purchase a new contract once your current one is up means you aren’t going to have spent your days driving around in an old car with high mileage.

The freedom that comes with PCP means that if you wanted to, you could buy a weekend car — unless of course you are using it to commute every day. When purchasing a new car outright, you are restricted by the constant reminder that you will have this car for the foreseeable future. With PCP, you can buy the car that caters exactly to the needs of your evenings and weekends. For example, an SUV if you go camping with the kids most weekends throughout the summer, or a two-door roadster, if your Sundays are filled by coastal runs. And, if your circumstances do change, you can simply exchange the car.

PCP agreements have revitalised the UK car market, as budgets grow increasingly tighter and people are constantly on the lookout for a good deal. For the past three years, the number of new car sales in the UK has stayed above 2.5million units per year, in comparison to 2011 when it was only 1.9million.

Top tier brands such as Audi, Mercedes, BMW and Jaguar Land Rover have all performed well under the system. This is due to the fact these cars hold their value better, and therefore depreciation is less, ultimately benefiting both dealer and driver. Mercedes reported a 100% upturn in UK sales since 2010.

A typical customer could be paying anywhere in the region of £100 upwards for lifestyle costs such as their phone bill and gym membership, so if dealerships are able to offer a vehicle at £99 a month, then they are making the cost seem more realistic for their customers — it’s near enough a no brainer!

You can't compare rent to a mortgage payment. This way of thinking about the rent versus buy decision is extremely flawed. Comparing a mortgage payment to rent is not an apples to apples comparison. In order to properly assess the rent versus buy decision, we need to compare the total *unrecoverable costs* of renting to the total unrecoverable costs of owning.

That may sound like a complicated task, but I have boiled it down to a simple calculation.

Nowhere across London is more unaffordable than Kensington and Chelsea and Knightsbridge in particular and rental costs in the borough are some of, if not the highest in the capital having increased over 23% since 2012.

But since June 2012, Julian Assange has managed to not only live rent free in prime central London, Harrods adjacent and just minutes walk from Hyde Park, but dodge any increase in living costs associated with renting.

The current average rent for a room in Kensington and Chelsea is £1,928 a month and while he may have been forced to pay for the upkeep of his cat, by claiming refuge in the Ecuadorian embassy over the last seven odd years, Assange has saved a huge total of £148,381 - an average of £1,810.

Tom Gatzen, co-founder of leading flatshare platform ideal flatmate, commented: “We’ve seen the capital’s tenants resort to some drastic measures to deal with the cost of renting in London but I think Julian Assange takes the gold for his commitment to a cost effective lifestyle in the London rental market. 

"It doesn’t seem all that long ago that he entered the Ecuadorian embassy but to think in the time since, the average tenant in Kensington would have paid £150,000 in rent for just a single room, which is actually quite mind boggling.  

"Of course, Kensington sits at the top of the table where rental costs are concerned but it does go to show how the cost of renting in London continues to spiral out of affordability for many.

"While Julian’s saving has been notable the harsh restrictions around leaving the property and the immediate eviction process that he underwent probably weren’t worth it. We would have recommended using ideal flatmate so he could have not only split the cost of living in London, but our personality test could have matched him with like-minded roommates.

"If the Ecuadorian embassy is at a loose end with the now empty room, we can certainly help them fill it with a suitable tenant that will bring less media attention and contribute to the monthly living costs.”

Using the website Numbeo to compare the prices of items from all over the world, giffgaff money has found the global destinations (and no-go zones) for anyone looking to save money.

Residents of London, New York, Paris and Amsterdam, look away now. Research into the world’s cheapest and most expensive countries has found that rent in Egypt is incredibly cheap, averaging at ­just £114 a month for a one-bed apartment in the city. Although you might feel a little better to know that a city centre apartment in Hong Kong would set you back £1,562 a month.

Categories used included every day and essential purchases including cars, rent and groceries which giffgaff have used to create maps and graphs to illustrate the vast cost gap in each category.

• Iceland, which consistently has one of the highest costs of living in the world, topped three categories: food and drink, groceries, and clothing and shoes.
• Switzerland also made several top-five appearances, proving most expensive for sports and leisure.
• Tunisia, on the other hand, was consistently one of the world’s cheapest countries and was found to have the cheapest food and drink in the world.

Rent

Living in a city apartment in Hong Kong is simply not possible for most of us, with a monthly rent average of an incredible £1,562 a month. Families hoping to live in the city centre will also face mind-blowing monthly costs, with a three-bed home stretching to £3,715 a month in rent.

Residents of London, New York, Paris and Amsterdam, look away now – rent in Egypt is incredibly cheap, averaging at ­just £114 a month for a one-bed apartment in the city. Families will also save, with a three-bed suburban home costing around £170 a month to rent.

Cars

Driving the picturesque landscape of Eastern European Georgia is a cheap affair, with a Volkswagen Golf priced around £12,072 (compared to £23,638 in the UK) and a Toyota Corolla coming in at just £13,621 (compared to £ 23,724 in the UK).

Singapore, on the other hand, is a pricey place for drivers, with a nippy Volkswagen Golf setting you back an eye-watering £88,474 – a massive £76,406 more than buying the same vehicle in Georgia.

For full results from the research, click here.

(Source: giffgaff)

With the changes to mortgage interest relief for buy-to-let landlords, many are now considering transferring their properties and are actively looking at ways to reduce their tax burden.

Below, Jonathan Amponsah of The Tax Guys looks at the pros of cons of establishing a buy-to-let business as a limited company and the tax implications you need to be aware of.

Tax rules for buy-to-let (BTL) landlords are changing – and this could mean higher tax bills.

Landlords will no longer be able to deduct all of their finance costs from their property income. The changes are being phased in between April 2017 and 2020.

However, this change doesn‘t apply to limited companies. So, unsurprisingly many BTL landlords are considering transferring their properties into a limited company, enabling them to continue to claim tax relief on all the interest and finance costs.

On the surface this decision appears to make business and financial sense. But… you may find yourself landed with unnecessary tax bills and costs.

Here are five common pitfalls to be aware of:

• Capital Gains Tax. If you transfer the property to the company, this will be treated as if you’ve sold the property to the company. If the property has gone up in value since you originally bought it, you’ll have to pay up to 28% capital gains tax on the difference, subject to any tax reliefs and allowances. If you have a few properties to transfer, seek advice about a relief you could claim to defer your capital gains tax.
• Stamp Duty Land Tax. If you transfer the property from yourself to the company (effectively the company buys the property) then the company could become liable to pay stamp duty land tax. So while you reduce income tax, you may wind up paying the same amount or more in stamp duty land tax.

These two main tax pitfalls could potentially wipe out any short term tax savings.

• Once the property is transferred, it is owned by the company, not the landlord. If something happens to the company, all its assets will be exposed including the property that you put in it.
• Your Mortgage. If your company needs a mortgage to buy the property from you then watch out as in most cases the interest rate is higher for commercial or company mortgages than it is for individuals. So, you could end up paying a lot more over the full term of the mortgage.
• At some point in the future if you sell the property the company will pay Corporation Tax on the profits and the balance of the money from the sale will remain in the company. In order to get access to the funds to enjoy you’d need to take it out of the company either as salary or dividends or other means. You’d then pay additional tax on that income. When you take the above into account the idea of transferring your BTL property into a limited company starts to sound rather bleak.

But there are some situations where you can reduce or eliminate the pitfalls above and enjoy some of the benefits of holding your properties through a limited company.

• If you’re buying a new property then a limited company could be a good idea. But if it’s an existing property and you’re only managing one or two properties, I’d say: don’t bother. You’re better off paying just a little bit of tax now instead of triggering all these taxes and then having to pay additional double tax if you sell the property in the future.
• Partnerships – If you currently run your BTL through a properly arranged partnership business, then transferring into a limited company could be a good idea because some of the tax burdens above could be reduced.
• Legacy planning. Landlords who want to leave their BTL properties to their children could consider the pros and cons of a Family Investment Company as an alternative to a Trust.

Clearly the message here is; don’t rush into it. It’s extremely unwise to move BTL properties into a company without taking professional advice. Whilst there’s no simple answer to the question and it all depends on your circumstances, as a general ‘rule of thumb’ I would say that if it‘s only one or two existing properties in your name, it‘s not a good idea. If you‘ve got 6-10 properties, it‘ might be worth your while to look at how you can enjoy the benefits of a limited company without triggering unnecssary taxes and costs.

With wage inflation stagnating below the rate of increased property prices, it has become very difficult to get a firm foothold on the London property ladder. Many people have therefore been forced into the private rental sector; signified by nearly one in three London household’s renting privately.

Despite the tremendous growth for the sector itself, the increased demand has driven up private rental values. Especially in London, where the average rent for a one bedroom property is a substantial £1,329 per month.

Sellhousefast.uk analysed data from the Office of National Statistics (ONS), revealing that single tenant’s in 25 of London’s 32 boroughs are sacrificing more than 50% of their monthly salary (after income and council tax deductions) on rent for their one bedroom property.

Single tenants living in a one bedroom property in Kensington and Chelsea are sacrificing an astonishing 85% of their monthly salary on rent – the highest out of all the London boroughs.

Single tenants in Kensington and Chelsea are then closely followed by those in Hackney – who give up 81% of their monthly salary to pay for rent on their one bedroom property. In third place is Westminster, where single tenants use up 79% of their monthly salary to pay rent for their one bedroom property.

Single tenants in Bromley as well as Havering, sacrifice the joint lowest percentage of their monthly salary on renting their one bedroom properties in London at 42%. Redbridge (49%), Merton (49%) Richmond upon Thames (48%) and Bexley (43%) are the other London boroughs where single tenants sacrifice less than 50% of their monthly salary on a one bedroom property.

Sellhousefast.uk asked a couple of single tenants living in a one bedroom property in London about their experience of renting.

Jessica, 26, has been renting a one bedroom property in Southwark for the last two years: ‘I am giving up a lot of my monthly income on renting a one bedroom in Southwark. It’s frustrating but I only tolerate it due to the convenience of living a short distance away from my workplace. It’s ideal as I start early and finish late most days. The biggest benefit is that it eradicates any time that I would lose through commuting if I lived outside the area. A lot of my colleagues are also currently doing the same thing as me. Whilst most are unhappy about giving up such a huge proportion of their salary on rent each month, it’s ok for the short-term. But in the long-run, it isn’t sustainable, as I wouldn’t be able to secure a deposit for a property of my own.’

Chris, 29, has been renting a one bedroom property in Hounslow for the last four-years: ‘Rent in London is truly extortionate. For the past three years, over half my monthly salary has gone on covering rent. On top of that, I have to pay for my food, utilities and travel every month – so I am not left with much to save, let alone enjoy any leisure activities. With me nearing thirty I want to settle down with my partner and this tiny one bedroom flat is certainly not going to suffice for the both of us. We have started to look at bigger properties in Hounslow, as we both work in the area. With rental prices as they are in London, it might be an uphill struggle for us’.

Robby Du Toit, Managing Director of Sell House Fast commented: “Demand has consistently exceeded supply over the last few years, Londoner’s have unfortunately been caught up in a very competitive property market where prices haven’t always reflected fair value. This notion is demonstrated through this research whereby private rental prices in London are certainly overstretching single tenants; to the extent they must sacrifice over half their monthly salary. For those single tenants with ambitions to climb up the property ladder – their intentions are painfully jeopardised, as they can’t set aside a sufficient amount each month to save up for a deposit or explore better alternatives. It’s not only distressing for them but worrying for the property market as a whole – where the ‘generation rent’ notion is truly continuing too spiral further.”

(Source: Sellhousefast)