Financial News
- 18 February 2013, 9:52
Home Ownership '£1,440 Cheaper' Than Renting
The cost of buying a home has become £1,440 a year cheaper than renting, according to new research.
Halifax found the average monthly costs associated with buying a three-bedroomed house stood at £621 in December, which is £120 cheaper than the typical monthly rent of £741 on a similar property.
The latest figures are an about-turn from December 2008, when buying a home was £217 a month more expensive than renting.
In recent years the gap has widened amid house price falls and record low interest rates which have made borrowing cheaper for those who can get access to a mortgage.
Meanwhile, increased demand in the rental sector from those struggling to raise a deposit or meet lenders' borrowing criteria has pushed up rental costs.
Home buying costs have declined by one third (34%) over the past four years, while average monthly rents have been pushed up by 14%, the study found.
The gap between buying and renting has widened by £21 a month over the past year. At the end of 2011, the monthly cost of home buying was £99 lower than renting.
Buying was found to be more affordable than renting in every UK region.
Buying is most affordable compared with renting in London, where the monthly difference is £193, while in Yorkshire and the Humber buying is just £1 a month cheaper than renting, Halifax found.
Martin Ellis, housing economist at Halifax, said that while the "financial attractiveness" of buying a home has improved in recent years, the tough economy is still holding would-be home buyers back.
He said: "Concerns over job security and raising a deposit are the main obstacles to people buying their own home. However, it is worth noting that once home buyers are on the first rung of the ladder, their monthly costs are notably lower."
what do you think?
shirley sutton
That's all very well but if you lose your job they won't pay your mortgage but they'll pay your rent!
shaun spencer
Thats why i suggest that people part buy and part rent their homes in my comments.which could be means tested periodically.particualy the young
Jason Coombes
What a load of rubbish, try and get a mortgage without a least £15-20,000 deposit. The average rent outside of London is a lot lower than this report makes out.
shaun spencer
In my local area ( westward ho) theyve built what you can only describe as a blue monstosity right on the sea front solely for for the purpose for the second home ownership which are empty for most of the year along with two restaurants right next door to each other where a sandwich costs five pounds( google westward ho and you will see what i mean).this place is increasingly becoming a ghost village along with other villages in the area where second homes are taking over and in the meantime our youngsters cant find or afford a place to live in the area.recently planning permission was sort to build a massive marina again mainly for second home ownership and for those that can afford a yacht.and this new marina was going to be built next door to a famous shipyard in the area that is a large employer in the area. But there would have been complaints from from the second home owners about the noise coming from the shipyard particuarly at night.the shipyard would have been forced to comply to the noise levels by law and therefore it wouldnt be of interest to the owners to keep such a shipyard in the area and have possibly moved their operations to plymouth with the loss of many jobs in the area.so second homes would have been built much to the detriment to the local people.its about time we taxed these second homes especially in the light of taxing second bedrooms.planning permission for this marina has been made countless of times now and is resubmitted each time with slight amendments so i fear in future it will be built and we will lose our centuries old shipyard along with many jobs and why so people from the cities can have a luxuary yacht bayed outside their second home.
jimmyjedi1979
The only thing that is holding this country together is the housing market. Bought my family home 7 years ago put down a 20pc deposit and now live comfortably in a nice semi for 490 a month. The family across the road rents hers for 750pcm. Best thing i did was buy into the housing market. Safe as houses as they say!
jimmyjedi1979
Although just down the road you can live in a similar sized house for nothing so long as you don't work and have plenty of kids.
Rob Unstable
I know this but icantget a mortgage because cantpay severe rent and save its a joke
Diane Rogers
That's the trouble my son and his wife have, they rent 550 a month can't afford to save for a deposit as well.
movvi
It's a stinker today, Rob, as you can't get a 100% mortgage. When paying more to rent than you'd pay for a mortgage, how are you supposed to save a deposit?! I always thought I had been unlucky paying over the odds for my house during the boom - now I think I was lucky.
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happymike CHESTER
Buying your own home is the best option ,Governments should help and encourage .Rent prices are a disgrace controlled by agents on behalf of owners ,the only way out of this catch 22 living is rent strikes.
toby wright
all depends on when you bought-never heard of negative equitity-put £30000 down as a deposit, house is now £25000less than when purchased- if sold now due to redundancy would now have £5000 less selling costs
happymike CHESTER
I buy my house for a HOME not for quick profit like the greedy Thatcher children .Prices will recover in time hang on don`t give it up ,I just hope the prices go only with inflation and not the crazy boom and bust we have just had.
Kelly Lovatt
Rent is ridiculous. I have an ex council house, my mortgage is £400 a month, my friend as the exact same house round the corner & pays council £500 a month. I earn more than her aswell.
Diane Rogers
Difference is your friend would get major repairs etc done you would have to pay yourself
stephen
Diane what major repairs . in 1989 thatcher took 75% of the rents off the council . they have no money for repairs
adam
Thats not true Steven,in Northampton the council have just spent a considerable sum replacing kitchens and bathrooms in a large portion of the council properties.
Andrew Brown
Very true Adam. I am a landlord - we are often made out to be the "baddies" in all this, however I have not made a penny of profit in the last three years because every tenant I have had, trashed the property causing not hundreds, but thousands of pounds worth of damage. This is not unusual unfortunately. Most people think throwing money at people who need it improves society. I beg to differ.
stephen
Adam i think you will find them houses have been taken over. housing association they get too keep 100% of the rents
Peter Carter
Andrew, you must be very upset that you have been unable to make a profit while your mortgage was paid by someone else. First world problems?
Paul Grice
The article doesn't play out around the country but the main part of this report is an attempt to kick start the housing market and the economy by using the media to try a brain wash you into TRYING to get a mortgage. . one suggestion I have for people going for a mortgage in these tough times is. To start off with an interest only mortgage that way if you unfortunately lose your job the benifit system will only pay the interest on your your mortgage which of course would be the full payment
shaun spencer
7:26am on 16/2/2013
Im sick of people owning second homes and rarther than taxing them their getti.g tax releif on them which is encouraging second home ownership for mr rich guy who has nothing else to do with his money than buy himself a sweet large apartment at the beachfront or in the country which he only uses once a year.this is just encouraging local authorities to allow permission to build such homes and is turning many many villages and towns into ghost towns throughout the year whilst our local youngsters cant even get on the first rang of the property ladder..tax these second homes and put the extra money into building starter homes for our youngsters.introduce more part rent and part buy homes that could be means tested.this would also gain employment in the local area as well as helping us out of recession as weve built our selves out recession in the past.