First time buyers pay almost 10% less each month than those who rent, according to research by Halifax.
The findings, based on Halifax data and figures from the Office for National Statistics, puts the average monthly costs for first time buyers at £658 compared to the average monthly rental costs of £720.
The report reveals that first time buyers are likely to make annual savings of £742 when compared to those who rent.
Monthly costs for home owners include mortgage payments, deposits, maintenance and insurance payments.
The number of first time buyers has increased by 22% in 2014 with 326,500 people climbing onto the housing ladder. This is the highest annual amount since 2007.
The research reveals that renting is more expensive in all UK regions:
- renters in London pay £112 more on average each month – 8% more than first time buyers
- buying a house is 17% cheaper than renting in the North West
- renting is 11% more expensive than buying in Scotland.
Craig McKinlay, mortgage director at Halifax, said:
“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.
“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 2 years.”