FTBs 9pc better off than renters
The cost per month for first-time buyers purchasing a three bedroom house stood at £658 in December 2014, £62 lower than the typical monthly rent of £720.
Craig McKinlay, mortgage director, Halifax, said: “Average home buying costs are significantly lower than average rental costs, providing first-time buyers with a large financial saving if they can get on the housing ladder.
“While the timescales associated with raising a sufficient deposit to buy a home present a hurdle to many potential first-time buyers, the significant difference in costs between buying and renting, combined with still low mortgage rates, increased consumer confidence and the Help to Buy scheme, have all been factors driving the substantial rise in first-time buyers over the past two years.
“A healthy mortgage market is key to a thriving economy.
“It is for this reason that helping more customers get on the housing ladder is a key commitment within the group’s helping Britain prosper plan, and Halifax is committed to playing a key role in delivering upon that plan.”
The number of first-time buyers entering the market increased by 22% in 2014 to stand at 326,500, the highest annual total since 2007 (359,900).
Buyers in London benefit most from buying rather than renting, as the average monthly cost of buying stands at £1,275 compared to the typical rental price of £1,387; a saving of £112 a month.
The second largest difference is in the North West, where first-time buyers are paying 17% less a month (£109 a month or £1,304 annually).
In East Midlands and the South East however the cost of buying versus renting is negligible (£6 and £15).
The cost of renting has increased by 28% in the last five years, double the rise (14%) in monthly buying costs.