Rent a celebrity

From the Hollywood Hills to Notting Hill - one landlord knew his luck was in when A-listers Reese Witherspoon and Jake Gyllenhaal turned up to rent his Victorian terraced home for a whopping £4,000 a week - but don't let this sky high price fool you, as new research has found that renting is still cheaper than buying for many of us...

£4,000 a week to rent a terraced property is no tall order if you are Hollywood A-listers, raking in millions each year. The three bedroom Victorian terrace just off Westbourne Grove is for sale for £2.795 million through agents Bective Lesley Marsh and is currently being rented out to some famous faces.

Actors Reese Witherspoon (Walk the Line, Legally Blonde) and Jake Gyllenhaal (Brokeback Mountain, Donnie Darko) are taking advantage of the current strength of the dollar against the pound and splashing out £4,000 a week on the home.

Agents Bective Leslie Marsh said, "The owner couldn't believe his luck when they turned up."

Back to reality

Despite house prices falling over the last year by as much as 16 per cent, it remains cheaper for first time buyers (FTBs) to rent a home rather than buy one.

According to a new study by propertyfinder.com, despite prices being at their lowest level for five years relative to income, the high mortgage rates are still pricing FTBs out of the market.

The irony is, if excellent lending deals were readily available to all first time buyers, it would be cheaper for them to buy a property rather than rent in 95 per cent of the UK.

Nicholas Leeming, Director of propertyfinder.com, said, "The strong deals are restricted to those who have a large deposit, something which the majority of first time buyers don't have."

There are now just three mortgage lenders offering home loans to people with only a five per cent deposit, and they charge rates of about seven per cent.

By contrast, the best deal available on the market for someone borrowing 80 per cent of their home's value is less than half of this, at 3.39 per cent, while most top rates demand a deposit of 40 per cent.

Mr Leeming said, "First-time buyers are the bedrock of the housing market.

"Lenders are squeezing the life out of the housing market with the extortionate mortgage rates they are demanding from those wanting to get on the ladder.

"Thousands are champing at the bit to take advantage of lower house prices, but simply can't get a mortgage. It's no wonder first-time buyers are now an endangered species," he added.

Picture by Manamanah