The gap that exists between what it costs to rent and what it costs to buy has decreased by 59% to its lowest point in 9 years, according to a recent report from Halifax. Last year, buyers made savings of around £366 in comparison to renters. This is a substantial drop from the previous year, where buyers were saving around £900.
Average housing costs in December last year, for a property with three bedrooms including mortgage were around £729 every month. That was a small fraction lower than the monthly rental costs for a similar property of £759. It was also revealed that Scottish buyers benefit from the best savings on a yearly basis at 20%. That means they save approximately £1,574 per year when compared to the rental cost.
Northern England, however, has nowhere near the savings of Scotland, with buying houses in Yorkshire costing a measly 5% less than rentals, saving the buyer £361 per year. While there’s no denying that the gap is shrinking between the cost of buying and the cost of renting, Halifax’s managing director, Russell Galley, states that owning property is still more cost-effective than renting. According to Mr Galley, as there are a greater number of financial products out there for borrowers, this has increased the cost of buying a home at a faster rate than the cost of renting. All the while, the average cost of deposits, household repairs, maintenance and rent has remained almost the same.
Source: Halifax
