New figures from Halifax suggest that taking the first step on the property ladder can have significant financial benefits.
The bank’s research indicates that first-time buyers save a typical £742 a year when compared with those who continue renting. This is based on monthly buying costs, including mortgage repayments, of £658 on a typical three-bedroom house and an average monthly rent of £720 on the same type of home.
Halifax mortgage director Craig McKinlay said: "Average home buying costs are significantly lower than average rental costs, providing first-time buyers with a large financial saving if they can get on the housing ladder.”
This is particularly the case in London, the bank found, where the difference in cash terms between buying and renting was £112 a month or £1,338 over the year.
In the North-west, meanwhile, the gap between the price of renting and owning a home was 17% in owners’ favour.
McKinlay said: “While the timescales associated with raising a sufficient deposit to buy a home present a hurdle to many potential first-time buyers, the significant difference in costs between buying and renting, combined with still low mortgage rates, increased consumer confidence and the Help to Buy scheme, have all been factors driving the substantial rise in first-time buyers over the past two years.”
He added: “A healthy mortgage market is key to a thriving economy. It is for this reason that helping more customers get on the housing ladder is a key commitment within Lloyds Banking Group's Helping Britain Prosper Plan, and Halifax is committed to playing a key role in delivering upon that plan.”