Buying beats renting in Aberdeen, but it pays to rent in London

  • Buyers in Aberdeen will be £99,000 better off compared to renters after 7 years
  • Dundee, Glasgow, Cambridge and Edinburgh also compelling to buy vs. rent
  • Buying in London with a 10% deposit takes 18 years to become more cost effective than renting
  • Bournemouth, Huddersfield, Bedford and Swansea also make sense to rent not buy

Aberdeen is the most cost-effective town in Britain for buying property compared to renting. Over a typical seven year period, the average property owner in the Scottish town can expect to be £99,040 better off compared to the equivalent renter, according to research from property website

The latest Rent vs. Buy analysis from Zoopla shows that it takes buyers in Aberdeen with a 10% just one year of ownership for buying to become more cost effective than renting. The average property price in Aberdeen is currently £206,060 with average monthly rents at £1,275.

London is currently the most renter-friendly location in Britain. After seven years, a typical London renter would be £82,412 better off than a buyer with a 10% deposit of an equivalent property. It would take 18 years for a London buyer with a 10% deposit to begin to be financially better off compared to the equivalent renter. These calculations are based on a conservative estimate of 4% annual house price growth in the capital.

Bournemouth is the second most renter-friendly town in Britain. With average asking prices of £380,206 and average rents of £1,024 it would take twenty two years for a buyer with a 10% deposit to be better off compared to a renter in an equivalent property. After a seven-year period, a typical renter in Bournemouth would be £30,719 better off than a typical buyer with a 10% deposit.

Lawrence Hall of said: “Despite taking longer to be better off financially, London remains the holy-grail in terms of property investment. It is much more buyer-friendly outside the capital but with rising average prices and low savings rates, accumulating a deposit has become increasingly difficult. It is important to remember that whilst renters may be better off in the short to medium term in some areas of the country, buyers are making a long-term investment. With most buyers opting for mortgage terms of 25 years, over the long term, buyers are likely to be better off compared to those who choose to rent.”

The Zoopla Rent vs. Buy methodology compares all of the costs associated with buying or renting as well as increases in asset or savings value over time. The analysis forecasts the amount of time it will take for buying to become more cost effective than renting across the largest towns and cities in Britain and compares how much buyers or renters are financially better off after the average tenure of a house.





Av. Asking Price


Av. Monthly Rent

Amount buyers are better off after 7 years (10% deposit)

































Milton   Keynes








Source: (February 2014)





Av.   Asking Price


Av.   Monthly Rent

Amount   renters are

better   off after 7 Years

(10%   deposit)





















Source: (February 2014)


£2 Billion Lending Record for Bridging Industry

  • Industry consolidates expansion with gross bridging lending of £2 billion in 2013
  • Annual lending growth is driven by extra projects, with the total number of loans up by a third
  • Bridging interest rates reach record lows, averaging 1.11% over two months to 1st January

Gross bridging lending totalled £2.0 billion in the twelve months to 1st January, up 3.3% from the annual figure in November 2013.

This brings annual growth in gross bridging lending to 27% – up from £1.57 billion in gross bridging lending in 2012.

In the two month period from 1st November to 1st January 2014, industry gross bridging lending was £419 million, up 5.5% from £397 million in the previous two months.

If lending continued at this rate for a year, gross lending in the next twelve months would be £2.51 billion per year.

Duncan Kreeger comments: “Economic progress feels more solid by the week, and it’s branching out across every area of business. By securing vital projects against property, firms and individuals stand to make the most from a year of great opportunity.

“Bridging has grown up from the industry it once was, and it’s still evolving in 2014. Lenders are expanding and opening their doors to different types of borrower. An economy on the move needs rapid finance that can really get projects started – and short-term secured lending is moving to fill that gap.”

Trends in the Bridging Industry

The most significant factor powering the expansion of gross lending is growth in the number of deals agreed.

Industry loan volumes during the two months ending 1st January increased by 10.8% compared to the previous two month period. This brings loan volumes for the whole of 2013 to levels one third (33%) higher than the preceding twelve months.

Meanwhile, the average value of a bridging loan was largely static. The average loan is now worth £459,000, representing a slight drop of 1.4% from the two months ending 1st November.

On an annual basis, loans in 2013 were larger than the previous twelve months, in line with the long term trend. For the last twelve months as a whole, loans averaged £430,000, or 5.2% more than the average loan in 2012.

Duncan Kreeger continues: “Just a few years ago the average bridging loan was worth half what it is now. Since then, the biggest transformation has been a growing interest from bigger property developers, professional investors and small businesses looking for more significant funds.

“The last few months have seen growth focused on volumes as enquiries are coming in thick and fast. But the long-term trend in terms of loan sizes is also moving upwards. Multi-million pound deals aren’t uncommon anymore, and as 2014 unfolds, even the most ambitious ideas are becoming ever more possible.”

Loan to Value Ratios

Loan-to-value ratios across the bridging industry have risen by almost one percentage point in recent months. In the two months to 1st January the average LTV was 48.1%, or 0.9 percentage points higher than LTVs of 47.2% in the previous two month period to 1st November.

On an annual basis loan to value ratios are still lower than previous highs. The average LTV across all twelve months of 2013 was 46.4% – down from 48.0% in 2012.

Duncan Kreeger comments: “Proper underwriting and a “safety first” approach have always been cornerstones of the best bridging lenders. Higher LTVs are completely consistent with that principle, but as properties grow in value more gearing is not always necessary.

“There is certainly space to lend at higher loan ratios this year, and the industry definitely has capacity to fund bigger loans where needed. Just as business and investment opportunities are opening up, the property market is putting the pedal to the floor. Alongside rates that look set to stay low for some time, slightly higher LTVs could mean more projects will have access to the finance they deserve.”

Bridging Interest Rates

As a whole, 2013 witnessed the lowest interest rates on record for the bridging industry, averaging just 1.19% across the entire year. This compares to 1.37% in 2012 and an average interest rate of 1.55% in 2010, the first year of the West One Bridging Index.

On bi-monthly basis, rates have also fallen to a record low. In the final two months of 2013, bridging loans cost on average 1.11% per month, down from 1.22% in the two months ending 1st November.

By comparison with other asset classes, potential returns for those funding bridging loans remain several times the total return of mainstream investment classes. Monthly product rates currently stand at 4.5 times those of 10 year government bonds, with a monthly spread of 0.87 percentage points.

Mark Abrahams, CEO of West One Loans, concludes: “Nearly seven years on from the financial crisis, markets are still shaking with volatility.

“Equities of all kinds are far too risky to form a large portion of most investors’ portfolios, and most fixed income products are set for years of trauma as central banks begin to wind up artificial bond-buying programmes like quantitative easing.

“As mainstream lenders already feel the first withdrawal symptoms from artificial stimulus and special measures, money from normal investors will be more in demand in 2014. And from a lending perspective, that will also be a serious advantage for privately funded lenders.”

Advertised Salaries fall to a 16-month low despite jobs optimism

Adzuna Logo

The average advertised salary across the UK has fallen to a sixteen month low, according to the latest UK Job Market Report from

The average advertised salary has fallen by 4.1% in the past twelve months, to just £32,323 in December 2013. This equals a drop in wages of £2,136 in real terms, and marks the third consecutive month in which advertised salaries have fallen.

Andrew Hunter, co-founder of Adzuna, explains: “The recovery in the jobs market is far from over. The great news is unemployment has fallen at record levels, but wages are still stuck in a post-recession hangover – while the backlog of employees waiting for the right time to change jobs is clearing, salary levels are yet to catch up. Compared with this time last year, there are fewer people fighting it out for each position, but the chances of securing a decent salary have become slimmer.”

Table 1

November 2013

December 2013

Month Change

Annual change

UK Vacancies





Jobseekers per Vacancy





Av. Advertised UK Salary





Salaries across the nation

The salary slide has been felt throughout the country, with annual advertised pay declining in every region aside from Wales during the twelve months to December. The East of England and the West Midlands have borne the brunt of the fall, with the average salary dropping 8.4% and 6.9% respectively in these regions. But Wales has bucked the trend. Salaries in Wales have risen 4.1% over the twelve months to December, reaching an average of £28,121. Salaries in Wales are now at their highest point since August 2012.

Andrew Hunter comments: “The salary picture looks gloomy throughout the country. But some areas are weathering the storm better than others, with Wales leading the way. Initiatives such as Jobs Growth Wales, which has created over 10,000 jobs for young people, are helping to kick-start the regional labour market.[1] As demand for good employees has increased, so has advertised salaries. Wales is further along the curve in this respect than England, Scotland and Northern Ireland.”

Festive season fuels services boom

A few sectors have managed to navigate the salary slump, and witnessed an increase in advertised salary in December.

Salaries in the Hospitality and Catering sector increased 6.6% to £19,234 in the year to December 2013 – the largest increase of any UK sector. The industry also saw a rare monthly increase of 1% from November to December. This follows recent statistics showing that revenues in bars and restaurants increased 5% and 38% respectively over the Christmas period, largely fuelled by corporate hospitality as a result of increased business confidence.[2]

Other sectors to record salary increases in December included Engineering (+5.1%) and the Energy, Oil and Gas sector (+1.5%). In both skilled sectors, a brain drought has led to fewer skilled workers vying for each role and employers have increased salaries as a means to attract talent.[3]

At the opposite end of the spectrum, some of the sectors that have suffered most severely from the salary slump include Healthcare (-3.4%) and Teaching (-1.8%). Public sector cuts have taken a toll on budgets, and salaries have been squeezed as a result.

Andrew Hunter comments: “After years of corporate belt-tightening, the Christmas party season clearly brought some festive cheer to the hospitality sector. Our waistlines may have just about recovered, but the long-term effect on salaries is still being felt.”

Impact of proposed changes to the minimum wage

Adzuna analysis reveals that well over 1 million British employees would be affected if the Government proposals to increase the minimum wage to £7 per hour were to come into effect. Even this move, however, will still leave many Britons well below the living wage across the country.

In addition, recent research estimated that almost two-thirds of hospitality employees earn the national minimum wage,[4] meaning that a significant number in the industry could be in line for a pay rise if the proposed changes were implemented.

Andrew Hunter, co-founder of Adzuna, explains: “For the 1m+ workers affected by this change, the proposed jump in their hourly rate would have a significant impact. But for the remaining majority of our workforce, any improvements are likely to be more gradual. Osborne’s proposals would do nothing to help the squeezed middle, who are still struggling from a cost-of-living crisis caused by inflation.”

Vacancies and competition for jobs

The number of vacancies in December was 11.9% higher than a year ago, with 744,665 positions on offer. This was despite a slight monthly decrease from November, typical of a seasonal slowdown.

Compared to the previous year, competition for jobs fell by almost a third (30%) in December. But compared to the previous month, a slight monthly fall in advertised vacancies meant that competition for jobs increased by 1.3% in December, to 1.61 jobseekers for each advertised vacancy.

Employers have been slower than anticipated to boost workforces in January, demonstrating a delayed recovery from the seasonal recruitment slump. Adzuna data showed that advertised vacancies in late January fell almost 20,000 vacancies short of the record levels seen in November.

A strong North-South divide… but signs of improvement

A prominent North-South divide persists in the labour market. Nine of the top ten cities to find a job were in the South of the UK, and seven of the worst ten cities to find a job still based in the North. Cambridge was the best city in the UK to find a job in December, with just 0.22 jobseekers per vacancy.  It was almost 100 times more difficult to get a job in Salford, the second most difficult city in the UK to find a job (with 20.54 jobseekers per vacancy), compared to Cambridge, the easiest place in the UK to find a job (with 0.22 jobseekers per vacancy).

There are, however, a few signs that the situation is improving for some industrial pockets in the North. Wolverhampton may be the seventh worst city in the UK to find a job, but competition for vacancies in the city is falling rapidly, and has dropped 38% over the last six months, bolstered by a strong service sector, and growing manufacturing and engineering industries.

Likewise, in Sunderland – the fourth worst city to find a job in the UK, and home to the UK’s vehicle production industry – competition for jobs has halved since July 2013.

Andrew Hunter comments: “Several local industry hubs are fighting back. Competition for jobs in both Sunderland and Wolverhampton has eased dramatically since July, as more vacancies have opened up.  Wolverhampton has the added bonus of having growing manufacturing and engineering industries, where business confidence is encouraging investment and boosting salaries.”

adzuna map jan

[1] Welsh government scheme which started in April 2012

[2] D&D/Living Ventures trading statement, December 2013

[3] Professor John Perkins’ Review of Engineering Skills, November 2013

[4] Resolution Foundation study

London kitchens – a thing of the past?

Kitchens are shrinking dramatically in size and prominence in new London homes and conversions, according to the latest research from estate agents Marsh & Parsons.

Falling victim to the changing eating habits of modern-day Londoners, kitchens now account for a smaller proportion of the total living space in new build developments and conversions in the capital than ever before.  Today’s London residents are eating out more – up to an average of four times a week in 2013.  This fuelled a boom in the London dining scene last year, with a new restaurant opening for every day of the month at its peak.

Only half of a typical Londoner’s total weekly lunches and dinners are now prepared in kitchens at home.  And as the average size of UK new builds gets smaller, it is the kitchen which is bearing the main brunt of this fall in square footage.

  • Example 1: A two bedroom flat in a Barnes development comes with a kitchen of 6.5 sqm (or 70 sq ft). This is merely 7.9% of the gross internal area of the apartment and roughly half the size of an average car parking space.

  • Example 2: The kitchen is equal to only 7.3% of the property’s entire internal area in a two bedroom, two bathroom Albert Embankment apartment in Prime Central London.  At just 6 sqm (65 sq ft), this shows kitchen size has shrunk by a third since the 1960s, when the average British kitchen in a post-war new build was 8.8 sqm (95 sq ft).

As a result, over a third of residents in new build developments report they don’t have enough space for everyday kitchen appliances such as toasters or microwaves, or to invite guests over for dinner in their home.

Charles Holland, Lead Director of Residential Developments and Investments at Marsh & Parsons, comments: “The whole way we socialise as a city is changing, and marginalising the kitchen as the traditional hub of the home. Aware of the changing lifestyle of our capital’s young professionals, developers of the latest London apartment blocks are prioritising living space, bathrooms and nearly all else over kitchen size.

“Londoners today are increasingly following in the footsteps of New Yorkers, preferring to eat out and meet friends in a restaurant than host dinner parties. As such, kitchen size is no longer as important to many young professional buyers, and is often at the bottom of the pile in property wish lists”.

Marsh and Parsons have identified that among new build properties coming onto the market, separate kitchens are increasingly rare – with open plan kitchen-diners generally the norm.

  • Example 1: A two bedroom flat in a renovation of a former Victorian hospital in Clapham provides only one large open plan reception space to act as combined kitchen, dining and living area.

  • Example 2: A one bedroom apartment in a modern riverside development in Pimlico incorporates a modest galley style kitchen into a single reception room.

Peter Rollings, CEO of Marsh & Parsons, comments: “With less and less time spent preparing meals in the home, we are starting to see the kitchen completely disappear as a room in its own right, and instead being subsumed into the wider living and dining space.  Once a means of space-saving in tiny apartment blocks, combined kitchen-diners are now necessary for many house-hunters, and much more practical than a separate kitchen.  Looking to the future, it begs the question whether the London kitchen is about to do a disappearing act on us altogether, or whether it has already ceased to exist as a must-have space?” 


Marketing pay rises 5% in the past year


  • 30% increase in marketers feeling positive about the economy
  • Marketing spend at highest level for 13 years

 Average marketing salaries have risen 5.6% in the past year according to specialist marketing recruiter EMR.*

The recruiter’s 2014 Salary and Market Trend report found marketing salaries increased almost £3,000 from £50,781 in 2012/13 to £53,613 in 2013/14. Bonuses, however, have stayed fairly steady at £7,155 this year compared with £7,238 last year

Marketing spend is currently at its highest level for 13 years and has seen four consecutive quarters of growth. Q3 2013 saw a 12.3% increase in spend compared with the same period last year.**

Marketers themselves are even more upbeat with a 30% increase in those feeling optimistic about the economy over the coming year – from 21% in 2012/13 to more than half currently (51%).

Simon Bassett, Managing Director of EMR said,

“An increase in overall pay and salary in particular is a major sign of confidence within the marketing industry as it represents a longer term commitment than simply raising bonuses. The sector is performing well and spending more and the huge increase in optimism is a by-product of this.”

In more good news for the marketing industry, 43% of marketers reported that the number of staff in their department had risen over the past year and 36% expect further headcount growth in the next twelve months. Forty four percent of marketers expect to change jobs in the next year.

Job security has risen 6% over the past year from 55%, to 61% currently. Similarly, job satisfaction has risen from 41% to 48%.

Simon Bassett continued,

“Marketing has a major role to play in the economic recovery as companies seek to expand. Talented staff are central to this hence increased hiring and increased movement in the job market. Many marketing professionals will have stayed put during the worst of the downturn as confidence was low, but now the sector is booming again, marketers will be on the look-out for an attractive move and bigger pay rises.”

IMLA’s latest Intermediary Lending Outlook

Pace of market growth takes mortgage lenders and brokers by surprise – but hopes emerge of a fuller sustainable recovery

Intermediary lenders and brokers see no cause for intervention to limit growth

Number of brokers struggling to help prime and near-prime borrowers halves in the last year

Wider causes of application failure show prudent approach by lenders

Broker-lender relationships improve as market returns to growth

Almost one in three brokers expect more than 10% growth in first-time buyer volumes

Market growth in the second half of 2013 surprised a majority of intermediary mortgage lenders and brokers but stops short of needing government intervention, according to the latest Intermediary Lending Outlook from IMLA (the Intermediary Mortgage Lenders Association).

Almost nine in ten (86%) lenders and 60% of brokers agree that growth was faster than expected between July and December. However, most lenders (71%) and brokers (74%) feel this upward trend will not require the government to intervene during 2014 to cool the pace of growth. A further 21% of lenders and 11% of brokers are unsure.

Instead, 69% of brokers see current growth as just the beginning of a fuller recovery while another 12% feel this could be on the cards. Lenders are slightly more cautious: 43% expect a fuller recovery while 50% feel this may occur.

Confidence reflected in growing ability to source mortgages for clients

Confidence has been transformed among mortgage brokers in the last year: 90% feel market conditions are currently improving, compared with just 37% in January 2013. Just 2% saw improvements as significant twelve months ago, yet 36% now take this view.

Lenders remain unanimous that the market is improving, as was the case in July. A growing number (67%) see current improvements as ‘significant’ (compared with 63% – Jul 2013).

This confidence is reflected in brokers’ ability to source mortgages for their clients. Just 26% were unable to source a mortgage for a prime borrower in Q4 2013, with more than twice as many (63%) having experienced this problem in Q4 2012. The same is true for near-prime borrowers: 37% of brokers failed to source a mortgage for this type of client in Q4 2013 compared with 67% in Q4 2012.

Growing numbers report improving market conditions Jan 14 Jul 13 Jan 13 Jul 12 Jan 12

Feel market conditions are improving

90% 85% 37% 14% 27%

Feel conditions are improving significantly*

36% 20% 2%

Unable to help a prime borrower in the last quarter

26% 37% 63% 64% 54%

Unable to help a near-prime borrower in the last quarter

37% 46% 67% 69% 65%

Feel market conditions are improving

100% 100%

Feel market conditions are improving significantly*

67% 63%

*The % who feel improvements are significant are counted in the overall % who feel conditions are improving

Prudent lenders keep borrowers in check

Almost nine in ten brokers (88%) report that successful applications stayed the same or improved in the second half of 2013.  But despite wider availability of mortgages and greater volumes of lending, more brokers are experiencing application failure as activity levels grow.

Faced with growing consumer interest, the trend suggests lenders are keeping a close eye on affordability as applications rise¹ and staying focused on lending responsibly to those who can afford it. Growth of lending in the high loan to value (LTV) bracket means limited deposits are now the fourth most common cause of failure, having been third in July, while existing debt has risen to third.

Brokers’ views on the most common causes of application failure

Jan ‘14 Jul ‘13

Not fitting a lender’s profile

74% 67%

Existing or historic financial difficulties (e.g. CCJs, arrears or bankruptcy)

54% 52%

Existing debt

51% 36%

Limited deposits

41% 41%

Asking for too much money, relative to the borrower’s income

40% 31%

Not being on an electoral register

19% 18%

Having too many searches on a borrower’s credit report

17% 10%

Administrative errors

13% 9%

Broker-lender relationships improve

More than one in four lenders (29%) increased the number of brokers they worked with in the second half of 2013, with just 7% reducing numbers. More lenders reported a consistent quality of introduced business in the previous six months (79% – Jan 2014 vs. 64% – Jul 2013) – although those experiencing better quality fell from 29% to 21%.

For their part, a growing number of brokers reported consistent service from lenders over the last six months: up from 45% in July 2013 to 50% in January 2014. Those who feel lenders’ service improved also crept up slightly from 11% to 12%.

Better systems for applications and more information on target profiles remain broker’s proprieties for lenders to address. Demand for better systems has grown from 25% to 34% of brokers, with interest in more information on target profiles also rising from 23% to 27%.

First-time buyers will drive growth in 2014

Brokers see the first time buyer market as the biggest growth area during 2014, with 30% expecting business volumes to increase by more than 10%. One in five (20%) expect the same growth among home movers while 18% anticipate more than 10% extra business in buy to let and remortgages.

Growth is expected to be fuelled by standard borrowers: 79% of brokers predict this part of the market will grow in 2014 (including 29% expecting more than 10% extra business). In contrast, 52% of brokers expect the near-prime market will grow but just 7% forecast growth in this segment to be above 10%.

Peter Williams, Executive Director of IMLA, comments:

“It is easy to forget just how low expectations were this time last year, with barely a third of brokers sensing an improvement in the mortgage market and a tiny minority placing any significance on it. A host of factors have contributed to a remarkable turnaround, including better funding markets, government support, consumer confidence and the improving economy.

“A market slump breeds pessimism, which has certainly been the case in the mortgage market since 2007/8, so for growth to return sooner than expected is nothing unusual and no cause for alarm. It is absolutely right for the Treasury, Bank of England and regulators to maintain a watching brief in 2014. But the recovery is yet to bed in fully and issues such as future interest rates continue to prompt widespread debate. Unnecessary tinkering may undermine the long term goal of laying the foundations for a sustainable market that is strong enough to be self-sufficient.

“Improving relations between lenders and brokers are a big plus as new regulations bring about new working relationships from April. Preparations are well underway to keep on serving the growing number of people interested in getting a mortgage. Their chances of doing so are vastly improved compared with this time last year – but lenders are clearly focusing on affordability and are making sure those who get mortgages should be able to sustain repayments through the upturn in interest rates.”

Property market confidence soars to highest level for 4 years

  • UK homeowners predict 7.2% increase in property prices over first half of year
  • 92% of homeowners expecting property prices to rise between now & summer
  • Londoners most confident with 98% of owners in capital saying prices will rise
  • Biggest increases in confidence seen in North signalling a broadening recovery

UK homeowners predict house prices will rise 7.2% between now and summer, up from 5.7% just three months ago and from 3.2% this time last year, making it the most upbeat forecast in four years, according to the latest Zoopla Housing Market Sentiment Survey.

The survey of 7,796 UK homeowners by Zoopla found that 92% of homeowners expect house prices in their area to rise over the next six months, up from 65% last year and the highest proportion on record. Only 3% of homeowners predict house prices will fall over the first half of this year, down from 19% at this time one year ago.

The survey further revealed that as homeowner confidence is buoyed, there has also been an increase in those considering buying a property over the next six months in the first half of 2014 – up to 22% from 19% back in September.

Londoners remain the most optimistic about the state of the property market, with 98% expecting a further rise in property values in the capital during the first half of the year and predicting average price growth of 9.6% over this period, above the national average of 7.2%.

In a positive sign for the broadening out of the market recovery, the most significant jump in confidence can be found in the North with Yorkshire and The Humber and the North West where the proportion of owners who believe property prices will increase over the next six months has risen from 84% to 88% in just 3 months. At the other end of the spectrum, homeowners in Wales are the least bullish on house prices currently, with only 85% of homeowners predicting a rise in property prices by June.

Lawrence Hall of commented: “Across the country, homeowners are starting the New Year far more positive about the health of the property market. Early indicators suggest that we can look forward to a busy first few months to 2014, as current levels of confidence are likely to fuel more transactions. With 2013 characterised by the wave of government initiatives to lure first-time buyers onto the property ladder, 2014 could well be the year we see activity levels increase significantly.




Rise   (%)

Flat   (%)

Fall   (%)





South East England




East of England




South West England




West Midlands




East Midlands




Yorkshire and The Humber








North West England




North East England








Source: (January 2014)





1   year ago




East of England



South East England



North West England



South West England



West Midlands






East Midlands



Yorkshire and The Humber



North East England






Source: (January 2014)