Buyers better off than renters in the UK, but the gap is narrowing
The gap between annual costs of buying a home in the UK compared to renting one are at the lowest in almost a decade but buyers are still better off nationwide.
Latest figures show buyers are saving £366 per year, compared to £900 in 2017 and owners are still better off than renters in all parts of the UK when all costs are considered.
The research from lender the Halifax shows that the gap between the cost of buying and renting is down 59%, its lowest in nine years. Housing costs, including a mortgage on a three bed home in the UK, were £729 a month in December 2018, compared to the average monthly rent of £759 for the same property type.
The report points out that buying in recent years has meant lower monthly costs than renting across the UK but the latest picture shows an uneven snakes and ladders effect. Outside of London, Scottish buyers have the highest average annual savings of 20% or £1,574 compared with renting, compared to Yorkshire, where the cost of buying is only 5% lower than renting at £361.
Regionally, buyers are better off than renters in Wales with annual savings of over £2,000 or 14% whereas in Northern Ireland mortgage payers are saving 7% less than their Welsh counterparts at £382 annually.
‘The gap between buying and renting is narrowing, primarily driven by reduced first time buyer prices deposits in some regions and continuing house price growth, meaning buyers are paying more on their mortgages,’ said Russell Galley, Halifax managing director.
‘With more products available for borrowers, these factors combined have pushed up the price of buying quicker than the price of renting. Meanwhile, the cost of rent, household maintenance and average deposits have remained broadly flat,’ he added.