15 March 2023 , 10:52
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Homeowners are nearly £500 better off a year compared to renters according to an analysis by Halifax.
The bank's research found that the average monthly cost of owning a three-bedroom house for first time buyers was £971.
At the moment, this is £42 lower than the average cost of renting a similar property with renters paying an average of £1,013 a month.
This equates to around £500 a year for homeowners.
Halifax did note that the gap had narrowed since 2016 when homeowners were saving £1,567 a year but 2021's figure showed homeowners saving a whopping £1,300 compared to renters.
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The mortgage lender found that the difference was "most pronounced" in London where homeowners were paying nearly £3,000 a year less.
Scotland was found to have the largest gap percentage-wise than the rest of the UK with renters paying 21% more than homeowners for a similar property.
On average, renters are paying £918 a month compared to £727 for homeowners.
There is only one region in the UK where renting was cheaper than owning and this was in the East of England.
In this area, homeowners pay £90 more each month, on average, than those renting.
Northern Ireland was next with homeowners only making a monthly saving of £24. After that homeowners in the north East were making a saving of £57 a month.
Kim Kinnaird, mortgages director at Halifax said: “Our latest analysis shows that becoming a homeowner can bring significant savings for people."
“Of course, making the move from renting to home ownership can be difficult for many, as raising a sufficient deposit and then finding the right property can be challenging.
“While a predicted fall in house prices this year will be welcome news for those looking to buy their first home, it doesn’t change the fact that getting on the property ladder remains expensive – a problem that is compounded when rents are high, impacting the ability to save.”
Regarding housing deposits, Halifax was found that the North East had the lowest in the UK with an average deposit being £32,920.
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Outside of London properties in the South East and East of England also required hefty deposits with the average being £97,320 and £87,157 respectively.