Owning home 'cheaper than rent'

Thurrock Gazette: Buying was found to be cheaper than renting in every region of the UK Buying was found to be cheaper than renting in every region of the UK

The cost of owning a family-sized home in the UK is now almost £1,500 a year cheaper than renting, according to research.

Halifax looked at the cost of running a three-bedroom house compared with the typical monthly rent paid on a similar property, and found that it is around £124 a month or £1,488 a year cheaper.

Researchers assumed that a home buyer had a deposit of around 27% and the cost of buying took into account mortgage payments, household maintenance, repairs, minor alterations and insurance.

The average monthly costs associated with owning a three bedroom house stood at £645 in December 2013; which is 16% lower than the typical monthly rent of £769 paid on the same property type.

Owning a home is most affordable compared to renting in London with the typical home buyer paying £188 a month, or £2,256 a year, less than the average renter.

Buying was found to be cheaper than renting in every region of the UK, although in the West Midlands and East Anglia the difference tends to be more "marginal", according to Halifax, which used a range of sources for its research.

Halifax said that the gap between owning and renting costs has been partly driven by average monthly rents rising by over £100 since 2009.

In 2008, home ownership was £226 a month more expensive than renting.

The Bank of England base rate, which has been held at a historic 0.5% low since 2009 has helped to keep mortgage payments relatively affordable, while Government schemes such as Help to Buy have also boosted the mortgage market.

But some concerns have been raised by experts about how affordable mortgages will be for some people when interest rates eventually start to rise.

Craig McKinlay, mortgage director at Halifax said: "There has been a substantial improvement in the affordability of owning compared to renting in recent years, which has been driven by the fact that monthly home ownership costs have fallen by a third (32%) since 2008."

Here are the average buying versus renting costs by region, according to Halifax, with the average monthly cost of buying followed by the average monthly rental cost and the difference in percentage and cash terms:

:: London, £1,196, £1,384, minus 14%, minus £188

:: Northern Ireland, £365, £419, minus 13%, minus £54

:: Wales, £465, £514, minus 10%, minus £50

:: North, £460, £498, minus 8%, minus £38

:: Scotland, £527, £568, minus 7%, minus £41

:: North West, £500, £535, minus 7%, minus £35

:: Yorkshire and the Humber, £478, £512, minus 7%, minus £34

:: South West, £692, £736, minus 6%, minus £43

:: South East, £867, £918, minus 6%, minus £52

:: East Midlands, £516, £538, minus 4%, minus £22

:: West Midlands, £553, £559, minus 1%, minus £6

:: East Anglia, £633, £640, minus 1%, minus £6

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