Homeowners £500 better off a year than renters despite mortgage hikes

Homeowners are nearly £500 better off a year compared to renters, new figures reveal.

According to Halifax, the monthly cost of owning a home for first-time buyers averages £971. That’s 4 per cent – the equivalent of £42 – less than the rent of a comparable property.

The banking giant’s findings came despite high mortgage rates over the past year, but the gap between ownership and rent has narrowed significantly due to rising borrowing costs.

Halifax based its findings on first-time buyers with a mortgage on a three-bedroom home, compared to the average monthly rent for the same type of home.

Halifax has revealed the average monthly cost of homeowners and rent payments in Britain

While homeowners typically pay £971 per month, those who rent a property pay £1,013 per month.

It equates to nearly £500 in savings for homeowners. The gap has fallen from its peak in 2016, when homeowners saved £1,567 a year.

The largest gap in Britain between homeowners and renters, in percentage terms, is in Scotland.

Those renting in Scotland pay an average of £918 per month, compared to £727 for homeowners, a saving of 21 per cent for those up the property ladder.

It’s a different story in the East of England, the only region or nation in Britain where it is more expensive to own a property than to rent the equivalent. Homeowners there now pay an average of £90 more per month than those who rent.

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This table shows the average monthly owner-occupied home and rental costs per region

The biggest benefits, in monetary terms, can be seen in London, where homeowners save nearly £3,000 a year compared to those renting similar properties.

Halifax’s Kim Kinnaird said: ‘Making the transition from renting to homeownership can be difficult for many, as raising enough down payment and then finding the right property can be a challenge.

While a predicted drop in house prices this year will be welcome news for people looking to buy their first home, it doesn’t change the fact that it remains expensive to get up the real estate ladder – a problem exacerbated when rents are high , with consequences for the ability to save.’

This table shows the average house price, the advance and the deposit for first-time buyers

Halifax’s most recent data on new buyers shows that, in cash terms, deposits on properties in the North East are the lowest in Britain at £32,920, which is about 19 per cent of the average property price in the area.

Outside of London – where those buying a first home bring in an average of £188,663 – homes in the South East and East of England also require hefty deposits from new homeowners, £97,320 and £87,157 respectively.

Separately, data from HomeLet shows that the average rent in Britain was £1,175 per month in February, an increase of 0.3 per cent on the previous month.

Excluding London, the average rent is £983 per month, up 0.6 per cent on the previous month.

In contrast, rents in London continue to fall – although cash rents remain significantly higher than elsewhere in the country.

Research by SpareRoom found that 82% of tenants have not moved even though they wanted to because available housing was out of budget

The region saw the biggest monthly drop, with rents falling by 0.7 per cent, falling below their previous average of £1,989 per month to £1,975 per month.

New research from SpareRoom reveals that nearly three-quarters — or 72 percent — of renters who haven’t moved in the past 18 months said they chose to stay, even though they’d rather move.

The survey of 4,000 renters found that the main reason – at 82 percent – ​​was that the available housing was outside the budget.

Matt Hutchinson, from SpareRoom, said: ‘The current rental market is not working for anyone. Tenants are busy and struggling, landlords are leaving the market and our workforce is becoming less flexible by the day.”