The monthly cost of owning a home for first-time buyers is now £971 - £42 or four per cent lower than the cost of renting the equivalent property, according to the latest Halifax Owning vs Renting Review.
The analysis, which is 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 the £971 owners are now paying, compares to £1,013 for renters, each month.
While still equating to an almost £500 saving per year for owners, the gap is down from its peak in 2016, when owners were saving £1,567 annually.
The UK’s greatest gap between owners and renters, in percentage terms, can be found in Scotland. Those renting in the nation pay an average £918 per month, compared to £727 for home-owners – a saving of 21 per cent for those on the property ladder.
It is a different story in the East of England, the only region or nation in the UK where it is more expensive to own a property than rent the equivalent. Homeowners there now pay £90 more each month, on average, than those renting.
Kim Kinnaird, mortgage director at the Halifax, says: “Our latest analysis shows that becoming a homeowner can bring significant savings for people. Nationally, homeowners are almost £500 better off than renters each year.
“These benefits are felt most keenly in London, where homeowners are saving nearly £3,000 annually compared to those renting similar properties – a significant figure. In fact, the only region where it is cheaper to rent than own is the East of England, where renters are holding onto £90 each month, compared to owners.
“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.”
Table 1: UK average monthly homeowning costs and rent payments
|
Year
|
Average monthly homeowning cost *
|
Average monthly rent payment
|
Monthly savings for owners
|
Monthly savings for owners
|
Annual savings for owners
|
|
2012
|
£614
|
£661
|
7%
|
£48
|
£572
|
|
2013
|
£581
|
£692
|
16%
|
£111
|
£1,327
|
|
2014
|
£607
|
£720
|
16%
|
£113
|
£1,361
|
|
2015
|
£616
|
£744
|
17%
|
£128
|
£1,539
|
|
2016
|
£629
|
£759
|
17%
|
£131
|
£1,567
|
|
2017
|
£629
|
£754
|
17%
|
£125
|
£1,501
|
|
2018
|
£669
|
£759
|
12%
|
£90
|
£1,084
|
|
2019
|
£727
|
£747
|
3%
|
£20
|
£238
|
|
2020
|
£744
|
£821
|
9%
|
£77
|
£923
|
|
2021
|
£766
|
£874
|
12%
|
£108
|
£1,300
|
|
2022
|
£971
|
£1,013
|
4%
|
£42
|
£498
|
Sources: Halifax, Birmingham Midshires and ONS. *Mortgage prices based on Halifax 12mth rolling data calculated to January 2023, January 2022 etc
Table 2: UK average monthly home-owning and rent costs by region
|
Region
|
Average monthly homeowning cost*
|
Average monthly rent payment
|
Monthly savings for owners
|
Monthly savings for owners
|
Annual savings for owners
|
|
Scotland
|
£727
|
£918
|
21%
|
£191
|
£2,295
|
|
South West
|
£1,029
|
£1,237
|
17%
|
£208
|
£2,492
|
|
North West
|
£778
|
£922
|
16%
|
£145
|
£1,737
|
|
Wales
|
£735
|
£872
|
16%
|
£137
|
£1,647
|
|
Greater London
|
£1,828
|
£2,074
|
12%
|
£246
|
£2,950
|
|
West Midlands
|
£839
|
£951
|
12%
|
£112
|
£1,342
|
|
Yorkshire & the Humber
|
£720
|
£802
|
10%
|
£82
|
£980
|
|
South East
|
£1,345
|
£1,474
|
9%
|
£129
|
£1,550
|
|
East Midlands
|
£843
|
£931
|
9%
|
£88
|
£1,059
|
|
North East
|
£628
|
£685
|
8%
|
£57
|
£686
|
|
Northern Ireland
|
£596
|
£620
|
4%
|
£24
|
£288
|
|
East of England
|
£1,212
|
£1,122
|
-8%
|
-£90
|
-£1,078
|
|
UK
|
£971
|
£1,013
|
4%
|
£42
|
£498
|
Sources: Halifax, Birmingham Midshires and ONS. *Mortgage prices based on Halifax 12mth rolling data calculated to January 2023
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Buildings insurance, boiler servicing, running repairs, renewals, have these costs been taken into account ?
Nonsense! Take in to account the deposit, maintenance, insurance etc. Doesn't even compare, in the short term renting is cheaper. The upside to ownership is capital growth and not paying a mortgage for ever.
Exactly, if you rent the monthly payment never stops, and if you own it outright then when you get to 75 years old a s21 cannot land on your Zimmer frame.
What load of claptrap!!!
Comparing a homeowner mortgage with rent is like comparing apples & oranges - they're vastly different.
Kim, sells mortgages !
These comparisons are always nonsense because they don't take into account the buying and selling costs most people experience.
Very few people buy a forever home as their first purchase.
I'm in my 7th home as an owner occupier. I thought my previous one was my forever home but then the Council decided it was an Article 4 area so we bailed before we became trapped in a massively devalued, almost impossible to sell house in student heartland. That move cost £25000 in estate agent fees, SDLT, mortgage arrangement fees, conveyancing fees and removal fees. That was 12 years ago so that £25K needs to be spread over the ownership costs somehow.
This report compares the mortgage payment with the rental payment, nothing else. It needs to be clear that this report does not take anything else into account. What happens when the mortgage is fully paid off. It is a too simplistic view.
Yet another abysmal survey omiting the obvious fact that a mortgage vs rent only analagy is completely flawed. Since when was the Mortgage anyones sole housing cost!
I didn’t see this Article yesterday had too much to do what a nonsense analysis from the Halifax about all, one of the biggest Mortgage providers & owned by Lloyds Bank probably UK’s biggest.
Based on a 3 bed home Rented for £1’013.00 pm, when did I ever Rent a 3 bed home to one person in the last 44 years, answer never.
So shall we say 3 shares minimum and divide by 3 = £427.00 pm per Renter but more likely I should be dividing it by four.
On the other hand I don’t see a first time buyer buying a 3 bed home or 3 people buying the same first time home.
The Article and Analysis is utter nonsense what a long winded load of crap and the Parent Company setting aside huge amounts to Convert former Bank’s into Renting themselves who will have preferential rules and allowed Short Term Tenancies, that should level us out to Business. Oh they call this fairer Renting.
Sorry I was too generous there £337. ea, (or £253 ea if 1013 divided by 4 sharing), so who’s cheaper they must have orders to push Sales.
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