First-time buyers in the UK are £742 a year better off compared with those who rent, data from lender Halifax indicates.
Craig McKinlay, mortgage director at Halifax, 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 have been factors driving the substantial rise in first-time buyers over the past two years.”
The research found that the average monthly cost for a first-time buyer buying a three-bedroom house stood at £6,582 in December 2014 – £62, or 9 per cent, lower than the typical monthly rent of £7,203 paid on the same property type.
However the average monthly buying costs grew by £46 since 2013, while average monthly rents increased by just £28, meaning the gap has closed over the last year.
But the gap between the cost of renting and buying is still higher than in 2009, when the average monthly cost of buying was £576, compared with £561 for renting.
Ben Wall, director of Bristol-based Wall 2 Wall Finance, said: “Obviously it depends what interest rates will do longer-term, but at the moment this sounds like a reasonable suggestion. The general perception is that it is the deposit keeping people off the housing ladder, but that’s not necessarily the case, because you can get a mortgage with a 5 per cent deposit now.”