Rich list renters are targeting Shropshire
"Rich list renters" in Shropshire are increasingly shunning buying properties in favour of renting expensive homes and investing money elsewhere.
That's the view of one county estate agent, which insists that affluent people are deciding not to pay mortgages on luxury homes in order to pay cheaper rents.
Bosses at Habitat Lettings say savvy renters can live in a £700,000 home for £1,500 a month, whereas if a borrower took a £500,000 mortgage at a 4.4 per cent rate of interest, and repay it over 25 years, they would pay a monthly sum of £2,700 per month.
Habitat's suggestion that such a borrowing could cost £4,000 per month, however, would be borne out by extreme circumstances, such as the interest rate clocking in at 5.29 per cent – typical for a 100 per cent mortgage – over just 15 years.
Ellie Garbett, co-owner of Habitat Lettings, said: "Before the banking crisis, affluent home-buyers could obtain interest-only mortgages, based on the understanding that, in later years, they had investments or inheritance money that would pay off the capital loan.
"However, banks have now all but stopped giving interest-only loans, so buyers have to pay off the capital as well." She added: "A deposit on house worth £700,000 could be as much as £200,000. Investing that sum in three buy-to-let properties will create an income that covers the £1,500 cost of renting the same luxury home."
Victoria Pocock of Carter Jonas in Shrewsbury said: "There certainly seems to be a demand for good quality homes in Shropshire's rental market.
"Rather than rush in and buy a house because it happens to be for sale, but it's not their ideal home, people are renting so they have the cash available for when the right property does come onto the market."
Michael Nettleton, director of Shropshire-based Nock Deighton, said: "We have certainly noticed a flurry of activity in the rental market, particularly amongst international business people and those in senior management roles who are only positioned in the county for a shorter term period of time.
"Good quality properties will always be popular on both the rental and sales markets, as Shropshire continues to be a much sought after location."
