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Cambridge property buyers could be over £900,000 better off than renters

11 September 2018

  • Tenants of a typical home in Cambridge would be approximately £958,227 better off over 25 years if they bought the property instead
  • Research reveals a property wealth divide existing in Cambridge

Cambridge, September 11 2018 – Residents in Cambridge would be better off by up to £958,227 on average over 25 years if they bought instead of rented a typical property, according to research by Countryside.

Researchers compared the lifetime gain or loss of someone renting a property to the lifetime gain or loss of buying an average home. Because buyers will own an asset once they have paid off their mortgage, this is creating a remarkable divide between buyers and renters, leading to a property divide whose wealth will be substantially less than those buying over a 25 year period.

It may seem as though renting can be the cheaper option, but overtime, the property winners are those who buy and are left with an asset after 25 years. Looking at the costs of buying or renting an average Cambridge house priced at £450,426, buyers can gain over £918,000 after 25 years. This average house price reflects the latest figures published by the UK’s Valuation Office Agency under the category “all properties”.

The following table shows the lifetime difference between buying and renting an average house in Cambridge:-

David Everett, Managing Director of Countryside’s New Homes & Communities Central Region, said: “Cambridge has a unique offering that few other cities can replicate, in that it gives residents the chance to enjoy contemporary living in one of England’s most historic cities. With excellent education and transport links, Cambridge also offers home buyers a good investment for the future. The outstanding Perse School lies within walking distance of our developments, along with the Cambridge Guided Busway providing the fastest connections to destinations including Cambridge railway station and the city centre”.

Buyers interested in purchasing a home in Cambridge have many options available with Countryside at both their Abode and Aura developments. The Hobson Collection is the latest release of homes at Abode; an exclusive development of just fifteen 1, 2 and 3 bedroom apartments, and 3 bedroom duplexes. All homes are set amid green open spaces and tree-lined avenues, surrounded by an extensive range of amenities in the wider Great Kneighton development. Local facilities include schools, shops, a library, sports pitches and a 120-acre country park. Prices range from £265,000 - £650,000.

Countryside has calculated the average rent using figures from the Government’s Valuation Office Agency and modelled how they are likely to increase in line with projected house price rises; it then modelled current and projected mortgage rates over a 25-year period using 25-year swap rates and current MFI bank margins. It used current house prices from Land Registry and modelled potential house price rises and capital gains using projections from the Office of Budgetary Responsibility for the next six years and a conservative long term house price annual growth rate of 3.7%.

Full details of the methodology and assumptions are in the notes to editors.


Jose Mendez/Louise Male |t: 07884134440 /07961 048 046

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About Countryside

Countryside is a leading UK developer specialising in building communities, not just houses. With over 60 years’ experience, we continue to make a positive impact with regeneration schemes in London, the South East, the North West of England and the West Midlands, often partnering with local authorities and housing associations.
Our Millgate brand creates homes with exceptional standards of craftmanship around London and the South East.
In 2016, Countryside was listed on the London Stock Exchange and our robust balance sheet enables us to continue investigating in our systems and people and to support our growth plans.
For the year ended 30 September 2017, we completed 3,389 homes with revenues of £1,028.8m. In April 2018 Countryside expanded its Midlands region with the acquisition of Westleigh Group Ltd which delivered 1,159 homes of which 92% affordable for year ended 31st March 2018.
For more information see or follow @CountrysideProp on Twitter.


1) Monthly average private sector rent for Cambridge has been taken from the Government Valuation Office Agency at 31 May 2018. Rents are assumed to increase in line with house price increases (i.e. at the same yield) on an annual basis. The assumptions for house price growth are covered in point 5 of the methodology.
2) Average house prices are from the Land Registry at 31 May 2018.
3) The average deposit / mortgage loan size were sourced from UK Finance. The Loan to Value (LTV) figure is based on a UK weighted average LTV of 78.34% (based on UK Finance figures of 25,200 FTBs at 84.3% LTV and 24,800 re-mortgages at 72.3% LTV). Figures at 31 March 2018.
4) Mortgage repayments are based on a 25-year mortgage.
5) The average UK mortgage rate is currently 2.5%, based on the average UK mortgage rate on Gross Advances and Existing Stock, Mar 2018 (regulated and non-regulated loans). Source: BoE.
Since this reflects current rates, not rates over a 25-year term, we have calculated a long-term mortgage rate of 2.92% for an estimate of future mortgage payments across the term of the mortgage. This is based on a 25-year SWAP rate of 1.62% (this is the rate which banks use to price fixed term loans) and applying the current UK Monetary Financial Institution mortgage margin of 1.3% (Source European Union). We recognise that any projection of long term interest rates intrinsically requires a degree of estimation and assumption.
6) We have modelled future UK house price increases based on the current OBR (Office of Budget Responsibility) projections for the next six years, and a long-term capital growth rate of 3.7% (the future most data point in OBR projections). By way of comparison, PWC currently estimates that house prices will grow in the period 2020-2025 at an average of 4.1% a year. As with the long-term projection of interest rates, this intrinsically requires a degree of estimation and assumption.
7) For the purposes of calculating total returns, we assume that after a 25-year term, an individual would fully own the property and it would be their primary property (and therefore would not be subject to capital gains tax should they chose to sell it).
8) We do not include any running or transactional costs in this calculation; in most circumstances, property owners may have additional running costs for maintenance or repair of the property. In addition, they will face transaction costs in the potential sale of their property.
9) We have included current rates of purchase stamp duty in the return calculation. The assumption is that, in line with our calculation for LTV (point 3), 50.4% of purchasers are first time buyers (who will not pay stamp duty up to £500,000). The other 49.6% of purchases will not be first time buyers and will pay stamp duty.
10) We have not included the opportunity cost of investing a deposit in a property, vis a vis holding it in a savings account or other investment vehicle. 

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