Buying cheaper than renting
The average monthly costs associated with owning a three bedroom house stood at £645 in December 2013, 16% lower than the typical monthly rent of £769 on the same property type.
This represents a significant shift since 2009, when the average monthly costs for owning and renting were £646 and £652 respectively.
Monthly home ownership costs have fallen by a third since 2008, while monthly rents have increased by over £100 since 2009.
Craig McKinlay, mortgage director of Halifax, said: “Buying will continue to be a more financially attractive option as the cost of owning a home remains stable.
“With greater availability of mortgages that require smaller deposits, the property ladder has also become even more accessible for those who can afford the monthly costs of owning but had previously not been able to save the necessary deposit.”
Buying costs include mortgage payments, income lost by funding a deposit rather than saving, spending on household maintenance and repair and insurance costs. They do not include one-off costs, such as stamp duty, valuation and legal fees.
There are regional variations in buying versus renting, as owning a home is £188 less than renting in London per month, yet in the West Midlands and East Anglia the difference is marginal.
With the lower proportional cost of ownership and improved availability of 95% LTV mortgages, there has been a 15% increase in house sales in 2013 compared to 2012.
Sales were the highest since 2007 last year, yet they remained 34% lower.