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Homebuyers £875 a year better off than renters

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.”

 
  Avg monthly buying cost Avg monthly rental cost % difference £ difference
June 08 £1,072 £720 49% £352
June 09 £775 £697 11% £78
June 10 £676 £657 3% £19
June 11 £668 £693 -4% -£25
June 12 £650 £728 -11% -£78
June 13 £672 £745 -10% -£73

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