Buying or renting a home is an important outlay. The recommendation of the experts is not to allocate more than 35% of the income to the payment of mortgage payment or the monthly rent. However, in some areas this percentage rises, jeopardizing the finances of many families. There are different factors that can raise this indicator. On the other hand, it is possible to put in place mechanisms to reduce the rate of effort involved in housing. In flats.com we give you the keys:
1. Prices vs wages. One of the aspects that explain this difficult situation is the imbalance between the sale and rental price of homes and the level of household income. In recent years, the value of houses has risen faster than wages, complicating the population’s access to real estate. This fact also hinders the previous savings necessary to cover the unfunded part, as well as the processing of guarantees that are usually required as collateral by the landlords.
2. Insufficient offer. The relationship between supply and demand also influences the rise or fall of the effort rate. In those places where there is more interest in being an owner or tenant, the available park is not able to absorb it, so the percentage of income dedicated to housing will be much higher than in areas where demand pressure has less force. Freeing land to increase new construction and dumping empty housing into the rental market would be the best solutions.
3. Flexible mortgages. To facilitate access, it would be interesting if banks were more open to negotiation. In this sense, the position of the bank would have to be more comprehensive before specific moments in which the buyer is not able to deal with the mortgage. Longer periods of grace are proposed that allow a postponement until the debtor’s economic situation is more relaxed.
4. Financial awareness. Although supply and financing take action on the matter, the lawsuit must also do its part. A greater awareness of borrowing capacity is the best prevention against the worst scenarios. Whether you opt for the purchase or the lease, it is essential to act responsibly and do the calculations. Setting a maximum budget and freeing yourself of other debts before embarking on a mortgage or rent is essential.
5. Limitation of rent. The control of income through official statistics as a way to contain the rise in rent in the most overheated areas is still surrounded by controversy. Many voices point out that the measure could be counterproductive and would not serve to reduce the effort rate. Legal security is seen as the only way to clean up the market, in addition to proposing solutions for the most vulnerable sectors of the population. .