The UK rental market has reached a crisis point, with the cost of renting at all-time highs while wages fail to keep pace in the UK. This imbalance has left many UK residents struggling to afford basic living costs, particularly in major cities. For those working remotely, the prospect of continuing to rent in the UK becomes less appealing by the day. A viable alternative for remote workers is to purchase property in Poland, where prices are considerably lower, even when financed through a mortgage. This strategy not only provides financial relief but also offers flexibility: if the UK market stabilizes or if circumstances change, one can easily sell or rent the property in Poland for a profit.
The UK Rental Squeeze
In the 12 months leading to February 2024, the average monthly rent in the UK soared to £1,276, based on data from Office for National Statistics, representing a 9% increase, the highest rise since 2015 . These figures vary significantly by region, with London seeing the most dramatic increases, where average rents are now over £2,000 per month. Meanwhile, wage growth has not kept up with these rising costs. Although there was a 5.1% growth in regular pay excluding bonuses in the private sector , this increase still lags behind inflation and the steep rise in rent prices.
To put this into context, if you’re earning around £30,000 to £40,000 annually, which is the average in many UK sectors, spending over £1,200 a month on rent can feel like an endless financial strain. For many, renting in high-demand areas leaves little room for saving, investing, or improving one’s quality of life.
The Case for Buying Property in Poland
For remote workers, the freedom to live anywhere opens up an array of opportunities, including investing in property in more affordable regions. Poland presents a compelling alternative. Not only are housing prices more reasonable, but mortgage costs can be much lower than the cost of renting in the UK.
Let’s consider some mortgage scenarios for properties in Poland :
- 550,000 PLN (€122,000), 10-year mortgage, 10% down payment:
- Monthly loan payment: 6,000 PLN (€1,320)
- This is comparable to rent in many UK cities but with the added benefit that you are building equity in a property rather than simply paying a landlord.
- 550,000 PLN (€122,000), 20-year mortgage, 10% down payment:
- Monthly loan payment: 4,200 PLN (€924)
- This payment is significantly lower than the average rent in the UK, offering substantial monthly savings.
- 1,100,000 PLN (€244,000), 10-year mortgage, 10% down payment:
- Monthly loan payment: 8,200 PLN (€1,800)
- Even for a larger and more luxurious property, the monthly cost is still lower than renting in high-demand UK areas like London, where rents easily exceed this figure.
Financial Flexibility and Exit Options
A significant advantage of purchasing property in Poland is the flexibility it offers. If you decide that living in Poland no longer suits your needs, the real estate market provides options to either sell the property—potentially at a profit—or rent it out. Poland’s property market has shown consistent growth over the years, meaning that there is a good chance that your investment will appreciate in value over time. Additionally, rental demand in urban areas like Warsaw or Krakow has been rising, so renting out the property could provide a steady income stream.
In contrast, continuing to rent in the UK offers no such financial growth. You are essentially sinking money into an asset you don’t own and have no chance of recovering that expenditure.
Comparison: Polish Mortgage vs UK Rent
- UK Rent: Average of £1,276 per month, increasing by 9% annually . In high-demand areas like London, rents often exceed £2,000.
- Polish Mortgage: A monthly mortgage payment of around €924 for a 20-year loan on a property valued at €122,000 . This not only offers lower monthly costs but also allows you to build equity in a property.
Even when considering additional costs like maintenance or property taxes in Poland, the overall financial picture is far more favorable than remaining in the ever-inflating UK rental market.
Conclusion: A Smarter Financial Choice
For remote workers or anyone looking for a financial escape from the UK’s high rent prices and stagnant wage growth, purchasing property in Poland presents an enticing alternative. With lower monthly payments, the chance to build equity, and flexibility to either sell or rent, investing in Polish real estate could be a strategic financial move. If the situation in the UK improves, you have the option to return, but in the meantime, your money works for you in a property market that offers growth and opportunity. Don’t forget about lower cost of living in Poland.
