Taylor Scott International News
First time buyers in the UK are £742 or 9% a year better off with their own home compared to those who rent, according to new research by the Halifax. The average monthly buying cost, including mortgage payments, associated with a first time buyer buying a three bedroom house stood at £658 in December 2014, some £62 lower than the typical monthly rent of £720 paid on the same property type. With the price of a typical first time buyer home rising by 8% in 2014, the difference has narrowed from £80 or 12% to £62 since 2013 as the average monthly buying costs grew by £46 while average monthly rents increased by £28. However, at the same time, the number of first-time buyers increased by an estimated 22% in 2014, with 326,500 first time buyers getting on the ladder, the highest annual total since 2007 when it was 359,900. In 2014, first time buyers in London had, in cash terms, experienced the largest benefit from buying rather than renting a home. The average monthly cost of £1,275 for those who have bought compares to an average monthly rental price of £1,387, a saving of £112 a month or £1,338 over the year. The second largest difference is found in the North West where first time buyers were paying 17% less a month, £109 a month or £1,304 annually, than the typical private tenant in the region. The smallest differences between the monthly cost of buying and renting are in the East Midlands at £6 or 1%, and the South East at £15 or 2%. The research shows that the gap between cost of buying and renting still substantially higher than in 2009. Five years ago the average monthly cost of buying was £15 higher than the typical rent paid at £576 versus £561. Since 2009 the substantial improvement in the affordability of buying relative to renting largely reflects a 28% or £159 rise in average monthly rental costs over the past five years. This increase was twice as fast as the 14% or £83 rise in average monthly buying costs. ‘Average home buying costs are significantly lower than average rental costs, providing first-time buyers with a large financial saving if they can get on the housing ladder,’ said Craig McKinlay, Halifax mortgage director. ‘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, combined with still low mortgage rates, increased consumer confidence and the Help to Buy scheme, have all been factors driving the substantial rise in first-time buyers over the past two years,’ he added. Taylor Scott International
Taylor Scott International, Taylor Scott
