Homeowners are saving over £400 per year compared to renters
The monthly cost of owning a home for first-time buyers is 4% - around £42 a month - lower than the cost of renting the equivalent property, according to the latest Halifax Owning versus Renting Review.
The analysis, based on housing costs for first-time buyers with a mortgage on a three-bed home compared to the average monthly rent of the same property type, found that homeowners were now paying £971, while renters were shelling out £1,013, each month.
Halifax noted that while owners were still saving hundreds of pounds per year compared to renters, the gap between these expenses was down from its peak in 2016, when owners were saving £1,567 annually.
The Halifax report also showed that in Scotland, the gap between owners and renters was the UK’s largest in percentage terms, with those renting in the nation paying an average £918 per month, compared to £727 for homeowners – a saving of 21% for those on the property ladder.
On the other hand, East of England was the only region or nation in the UK where it was more expensive to own a property than rent the equivalent. There, homeowners were now paying £90 more each month, on average, than those renting.
“Our latest analysis shows that becoming a homeowner can bring significant savings for people,” said Kim Kinnaird (pictured), mortgages director at Halifax.
“Of course, making the move from renting to home ownership can be difficult for many, as raising a sufficient deposit and then finding the right property can be challenging. While a predicted fall in house prices this year will be welcome news for those looking to buy their first home, it doesn’t change the fact that getting on the property ladder remains expensive – a problem that is compounded when rents are high, impacting the ability to save.”
The latest first-time buyer data from Halifax showed that, in cash terms, deposits being raised in the North East were the lowest in the UK at £32,920, around 19% of average property prices in the area. Outside of London – where those buying a first home were raising a huge £188,663 on average – properties in the South East and East of England also required substantial deposits from new home owners, at £97,320 and £87,157 respectively.
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