First-time buyerssave£27,000 buying over those renting

First-time buyers are saving an average of £27,000 buying a property over those rentingover a 30-year term, almost as much as the average deposit (£31,751).

First-time buyerssave£27,000 buying over those renting

First-time buyers are saving an average of £27,000 buying a property over those rentingover a 30-year term, almost as much as the average deposit (£31,751).

TheHalifax Buying vs. Renting Reviewfound that the average cost including mortgage payments of buying a three-bed home in the UK was £679 a month in December 2017, compared to the average monthly rent of £754 for the same property type.

Russell Galley,managingdirector ofHalifax, 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.”

The gap between the cost of buying and renting is now at its highest in four years,with buyers now saving £900 per year.

Buying is consistently more financially attractive than renting across the UK, with the greatest annual saving in London (£2191), and the smallest saving in Yorkshire & the Humber still standing at almost £589.

However, as a percentage, the biggest savings are made in Scotland and the South West of England, where the cost of buying is 17% lower than renting. The financial gain is most humble in the South East of England, where the cost of buying is 8% lower than renting.

The average monthly cost of buying has dropped 22% (£192) since 2008, while rental payments have jumped by the same amount (22% or £138).

Galley added: “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.”

The number of first-time buyers fell from a high of 359,900 in 2007 to an all-time low of 192,300 in 2008, according to the Council of Mortgage Lenders (now UK Finance).

The levels are back to the pre-crisis peak, having reached 365,000 in 2017 and exceeding 300,000 for the fourth consecutive year.