Renters 'paying up to 18% more per month' than home owners
21 February 2020, 00:29
Renters are paying up to 18% more each month than those who own their own homes in some parts of the UK, a report has found.
The gap is greatest in London, where home owners could find themselves 18% better off typically, adding up to savings of £3,727 per year, Halifax said.
Buying was found to beat renting across the UK, with those in Yorkshire and the Humber making the smallest savings on average at £235 per year.
Low mortgage rates have helped make monthly home loan repayments more affordable.
Back in 2009 when Halifax conducted similar research, buying was found to be more expensive on average than renting.
Despite buying now beating renting, the gap by which people could be better off has narrowed as house prices have increased, Halifax found.
The research looked at the housing costs associated with a typical first-time buyer paying mortgage on a three bedroom home - and compared them with the average monthly rent on the same property type.
Average buying costs include mortgage payments, income lost by funding a deposit rather than saving, spending on household maintenance and repair and insurance costs. But the calculations did not include one-off costs, such as stamp duty, valuation and legal fees.
Russell Galley, managing director, Halifax, said: "The overall gap between home buying and renting is at its smallest margin for 10 years, but this masks some significant regional variations where home owners are making some considerable savings on monthly costs.
"While Londoners stand to save the most from home ownership compared to renting, buyers in the South East and South West of England and north of the border in Scotland are also reaping the benefits.
"Buyers in two-thirds of UK regions are saving upwards of £1,000 a year from living in a home they own."
Here are average monthly buying costs, followed by average monthly rental costs, the percentage difference and the cash amount saved by buying versus renting on a monthly and annual basis, according to Halifax:
- London, £1,378, £1,689, 18%, £311, £3,727
- South East, £1,008, £1,214, 17%, £206, £2,475
- South West, £765, £915, 16%, £150, £1,796
- East Anglia, £736, £853, 14%, £117, £1,400
- Scotland, £545, £647, 16%, £102, £1,224
- Wales, £536, £634, 15%, £98, £1,177
- North West, £568, £665, 15%, £98, £1,174
- West Midlands, £621, £711, 13%, £90, £1,076
- East Midlands, £620, £686, 10%, £65, £784
- North East, £468, £530, 12%, £62, £747
- Northern Ireland, £437, £489, 11%, £52, £621
- Yorkshire and the Humber, £544, £564, 3%, £20, £235