Homebuyers are on average £875 a year better off than those in rented accommodation, according to new research from Halifax.
It is a massive turnaround since 2008 when purchasing a house was over £4,200 a year more expensive on average than renting.
The data shows that average monthly costs associated with a three-bedroom house purchase was £672 in June 2013, roughly 10 per cent lower than typical monthly rent of £745 for the same property type.
In June 2008 purchasing a home was £352 more expensive a year than renting, on average, a difference of £4,226.
A 37 per cent decline in home buying costs – mortgage fees, house prices and mortgage rates – since 2008 has improved the affordability of purchasing a home relative to renting.
In June 2008 the average mortgage rate for a new borrower stood at 5.88 per cent compared with a June 2013 average of 3.57 per cent.
In all but two regions of the UK – Yorkshire & the Humber and Wales – it is now a more affordable option to purchase a home than to rent.
London & Country mortgage specialist David Hollingworth says: “A big factor in these results will be in mortgage rates sharpening up compared with climbing rental costs. With first-time buyers having struggled, that’s kept rental demand very strong while mortgage rates are coming down.
“It highlights yet again why so many people aspire to own their own home.”
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