New research suggests that first-time buyers will end up being £27,000 better off than renters over the course of a mortgage term. Buying your own home is actually £900 a year cheaper than renting, adding up to substantial financial savings in the long term for those who get on the housing ladder.
The Halifax research, for its latest Buying vs. Renting Review, revealed that the average cost of buying a three-bed home in the UK, including mortgage payments, was £679 per month in December. The average monthly rent for the same type of property was £754.
That means the gap between the cost of buying and renting is at its highest in four years, up 44 percent from last year’s figure of an annual saving of £623 to £900 a year.
The figures show just how much more attractive buying is to renting for first-time buyers. London has the biggest annual saving for those who can afford to buy at £2191, with Yorkshire and the Humber the smallest at £589.
Halifax managing director Russell Galley said: “The gap between buying and renting has widened significantly, primarily driven by a reduction in mortgage rates and a more competitive market pushing down monthly payments. Meanwhile, the cost of rent, household maintenance and average deposits have remained broadly flat.
“Despite having to put down a sizeable deposit up front, homeowners are overall better off than renters in all parts of the UK. But those who are unable to get onto the property ladder because they can’t raise enough cash are paying more by renting.
“The good news is that record numbers of first-time buyers are still taking their first step on to the ladder and helping to bridge this gap thanks to a continued low-rate environment and government schemes including Help to Buy.”
If you’re a first-time buyer looking to make your move, Homeward Legal can help. Our dedicated First-Time Buyers’ hub has all the information you need on buying for the first time, while our expert team are standing by to give you a competitive quote for your conveyancing. Call now on 0800 038 6699 or get an instant quote.