The cost of buying a home in the UK is 16 per cent lower than renting, according to new research from Halifax. They estimate the average monthly costs associated with buying a three bedroom house are £621, £120 lower than the typical monthly rent of £741 paid on the same property type.
The gap between the costs of buying and renting has widened by £21 per month over the past year. At the end of 2011, the monthly costs associated with home buying was £99 or 14 per cent lower than renting. Over the past 12 months, buying costs have risen by 1 per cent, while the cost of renting has increased by 4 per cent.
Halifax's report also shows that buying a house is more affordable than renting in all 12 UK regions. Buying is most affordable compared to renting in London with the typical homebuyer paying 15 per cent (£193) a month less than the average renter (£1,101 against £1,294). In Yorkshire and the Humber the figures are much closer with average monthly buying costs £1 lower than average monthly rental costs (£482 against £483). In Scotland, the cost of buying a home in Scotland is 6 per cent lower than renting, according to research from Bank of Scotland.
Martin Ellis, housing economist at Halifax, said: "The sharp decline in home buying costs over the past few years, combined with a significant increase in rents, has greatly improved the financial attractiveness of buying a home. This shift has contributed to the increase in the numbers of house purchases, which reached a five year high in 2012.
"Despite this pick-up, home buying levels remains well below the levels at the height of the market. Today, concerns over job security and raising a deposit are the main obstacles to people buying their own home. However, it is worth noting that once homebuyers are on the first rung of the ladder, their monthly costs are notably lower."
Buying has been cheaper than renting since 2009 with buying becoming increasingly less expensive over the past three years. In contrast, in 2008 average home buying costs (£935) were £217 higher than the average monthly rent paid.
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