Monthly mortgage payments are now cheaper than monthly rental prices, according to Halifax.

Good news for anyone thinking of buying their first property. Homeowners are nearly £500 better off annually than renters, according to Halifax. The lender has revealed that the monthly cost of owning a home is £42 cheaper than renting a comparable property. The difference is greater in London, where homeowners pay almost £3000 less yearly than those renting similar homes.

Halifax says the monthly cost of owning a home for first-time buyers is now £971 – which is £42 per month lower than the cost of renting a comparable property, who pay £1013 per month.

The analysis is based on housing costs for first-time buyers with a mortgage on a three-bedroom home compared to the average monthly rent of the same property type.

Renting and buying gap

Scotland has the greatest gap between renting and buying, with renters paying an average of £918 per month, compared to £727 for homeowners. This is a saving of 21% for those who have their own property.

‘Our latest analysis shows that becoming a homeowner can bring significant savings for people,’ says Kim Kinnaird, Mortgages Director, Halifax. ‘Nationally, homeowners are almost £500 better off than renters yearly. These benefits are felt most keenly in London, where homeowners save nearly £3000 annually compared to those renting similar properties – a significant figure. In fact, the only region where it is cheaper to rent than own is the East of England, where renters are holding onto £90 each month, compared to owners.’

First-time buyer deposits

So how much deposit do first-time buyers typically need to find? Cash deposits being raised in the North East are the lowest in the UK, according to Halifax – they stand at £32,920, around 19% of average property prices in the region. Properties in the South East and East of England require much larger deposits of £97,320 and £87,157, respectively, while London properties require around £188,663. Unsurprisingly, figures released in 2021 showed that 46% of first-time buyers used ‘the Bank of Mum and Dad’ to buy their first home.

If you are considering buying your first home, we can help you explore your options and give you a clear idea of what you could borrow.

Feel free to contact us if you’d like to speak to one of our mortgage advisers.

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