The cost of buying a home in the UK is now almost a fifth lower than renting, according to research by Halifax. The average monthly costs associated with buying a three bedroom house stood at £600 in June 2012 which works out at £132 lower than the typical monthly rent of £732 paid on the same property type.
In 2011, the monthly cost
associated with home buying was £78 lower than renting. Over the
past year, buying costs have dropped by 3%, while the cost of renting
has increased by 5%.
"It is clearly encouraging that there has been a significant decline in the cost of buying a home for those able to enter the housing market since 2008," said Martin Ellis, housing economist at Halifax. "The improvement is due to a combination of lower mortgage rates and declining house prices. In contrast, market conditions for renters have deteriorated as rents have risen in the past two years.
“Despite the improvement in buyer affordability, the housing market nationally continues to tread water. Those getting on the housing ladder still face challenges, most notably in getting a deposit, and this challenge, along with the considerable uncertainty regarding the economic outlook, is still contributing to subdued housing demand. However, it is worth noting that once homebuyers are on the first rung, their monthly costs are notably lower.”
Buying is most affordable compared to renting in London with the typical homebuyer paying 14% (£177) a month less than the average renter (£1,108 against £1,284). The gap between buying and renting costs is smallest in the East Midlands
A recent Rightmove survey found that 56% of renters are ‘trapped’, wanting to buy but unable to afford to. Raising sufficient deposit was cited as the single biggest challenge for a third of those looking to get on the housing ladder. Highlighting the affordability challenge of getting onto the housing ladder, 58% of intending first-time buyers said that property prices in their area are above what is ‘fair and reasonable’.Reuse content