LETTING & ESTATE AGENT

Households who buy are 10% better off a year than tenants

Households who buy are 10% better off a year than tenants

Households are £875, or 10%, a year better off buying instead of renting – provided they can raise the deposit, says the Halifax.

The figures underline major changes in the market. Five years ago, the same Halifax research found it was almost £900 a year cheaper to rent than to buy. The difference since 2008 has been made possible by lower mortgage rates and higher rents.

The regular half-yearly research takes in average buying costs, including mortgage payments, income lost by funding a deposit, insurances, and household maintenance and repair.  

According to the Halifax, the average monthly costs associated with buying a three-bedroom house stood at £672 this summer, compared with typical monthly rent of £745 for the same property.

There are just two regions in the UK where it is still cheaper to rent than to buy – Yorkshire and the Humber, and Wales. However, at 1%, the difference is marginal.

Despite the improvements in mortgage affordability, the number of buyers in the UK housing market in the 12 months to June 2013 was 44% lower than in the same period in 2008.

However, there are signs of increasing market activity, with the number of home buyers up 3% compared to the same period – the first half of the year – in 2012. This is despite the size of the average deposit at £40,628, up from £28,893 a year earlier.