DCSIMG

Buying a home now ‘cheaper than renting’

Buying a home is now cheaper than renting in every region of the UK including the province according to the Halifax

Buying a home is now cheaper than renting in every region of the UK including the province according to the Halifax

THE cost of buying a home has become £1,440 a year cheaper than renting, according to research from Halifax published today.

The gap has widened in recent years amid house price falls and record low interest rates which have made borrowing cheaper for those who can get access to a mortgage.

Meanwhile, increased demand in the rental sector from those struggling to raise a deposit or meet lenders’ borrowing criteria has pushed up rental costs.

The result, says Halifax is that it is now £60 cheaper a month on average to buy a house in the province than to rent.

Across the UK as a whole, the bank said the average monthly costs associated with buying a three-bedroomed house stood at £621 in December, which is £120 cheaper than the typical monthly rent of £741 on a similar property.

Average buying costs include mortgage payments, income lost by funding a deposit rather than having savings and spending on repairs, using figures from Halifax’s own database as well as official sources.

The latest figures are an about-turn from December 2008, when buying a home was £217 a month more expensive than renting.

Home buying costs have declined by one third (34%) over the past four years, while average monthly rents have been pushed up by 14%, the study found.

The gap between buying and renting has widened by £21 a month over the past year. At the end of 2011, the monthly cost of home buying was £99 lower than renting.

Buying is most affordable compared with renting in London, where the monthly difference is £193, while in Yorkshire and the Humber buying is just £1 a month cheaper than renting, Halifax found.

Martin Ellis, housing economist at Halifax, said that while the “financial attractiveness” of buying a home has improved in recent years, the tough economy is still holding would-be home buyers back.

“Concerns over job security and raising a deposit are the main obstacles to people buying their own home,” he said.

“However, it is worth noting that once home buyers are on the first rung of the ladder, their monthly costs are notably lower.”

Buying was found to be more affordable than renting in every UK region. Below are the average monthly buying costs followed by rental costs and the difference, according to the Halifax study:

:: London, £1,101, £1,294, £193

:: Northern Ireland, £362, £421, £60

:: South East, £839, £889, £51

:: South West, £697, £737, £39

:: East Anglia, £606, £645, £39

:: West Midlands, £525, £560, £34

:: Scotland, £524, £558, £34

:: North West, £498, £526, £28

:: North, £451, £478, £27

:: Wales, £470, £486, £16

:: East Midlands, £505, £513, £8

:: Yorkshire and the Humber, £482, £483, £1

 
 
 

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