Scottish first-time buyers who make the jump to home ownership are on average £1,440 a year better off than they would be if they continued renting, according to new research.
An increase in average monthly rents coupled with a fall in the price of house buying expenses means that home ownership is becoming ever more cost effective, the analysis by Bank of Scotland found.
The gap between buying and renting in Scotland has widened significantly over the past five years, the research revealed. Home ownership now carries an annual saving of £1,440 – almost treble the £548 recorded in 2010 – and the last time renting was the cheaper option was in 2008.
The typical monthly buying cost, including mortgage payments, associated with a first-time buyer of a three bedroom house stood at £525 in December - £120 lower than the monthly rent of £645 paid on the same property type.
“Record low mortgage rates, coupled with rising private rents, have made getting on the housing ladder financially more attractive for those able to raise the necessary deposit and with access to mortgage finance,” said Nicola Noble, the bank’s mortgage director.
She added that first-time buyers accounted for almost half of all Scottish home sales last year, up from just 35 per cent in 2007, thanks partly to improving economic conditions and Government schemes such as Help to Buy.
How much of a saving first-time buyers stand to make depends on where they live, the research found. Those in the North West save around 20 per cent, while people in Scotland save 19 per cent and people in Northern Ireland and Wales save 18 per cent. The South East is the only UK region where renting is still narrowly cheaper than buying.
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