The gap between the cost of buying and renting is now at its lowest for almost a decade, Halifax claims.
Analysis by the lender – based on the monthly costs of a three-bedroom property – found that buyers were saving an average £900 a year compared to renters in 2017, but the latest figures show this saving is down to £366.
This is the smallest savings gap for nine years.
The research compares the typical costs for a first-time buyer such as average mortgage payments, income lost by funding a deposit rather than saving, spending on household maintenance and repair and insurance costs, with rental data from BM Solutions.
There are some limits to the numbers as it doesn’t include upfront costs such as Stamp Duty, valuation and legal fees or anything a renter may pay such as a deposit or tenant fees.
|Average monthly buying costs||Average monthly rental payment||% difference||£ difference||£ Annual Savings|
Home owners are still better off having their own property than renting across the UK, according to the analysis.
The biggest saving is in London, where home owners are spending £4,475 less than renters over a year, followed by Scotland where the savings are at £1,574.
|Average monthly buying costs||Average monthly rental costs||% difference||£ difference||£ Annual Savings|
|Yorkshire & the Humber||£520||£550||-5%||-£30||-£361|
Russell Galley, managing director at Halifax, said: “The gap between buying and renting is narrowing, primarily driven by reduced first-time buyer prices deposits in some regions and continuing house price growth, meaning buyers are paying more on their mortgages.
“With more products available for borrowers, these factors combined have pushed up the price of buying quicker than the price of renting. Meanwhile, the cost of rent, household maintenance and average deposits have remained broadly flat.”