Homeowners in the UK are nearly £500 better off a year than renters, according to new research from Halifax.
The average monthly cost of owning a three-bed home for first-time buyers is now £971, which is £42 lower than the average cost of renting an equivalent property, the mortgage lender said. Renters pay on average £1,013 each month, 4% more.
This equates to a saving of almost £500 a year for owners, the report said. However, the gap has narrowed since 2016, when homeowners were saving £1,567 annually.
“Our latest analysis shows that becoming a homeowner can bring significant savings for people,” said Kim Kinnaird, mortgages director at Halifax in a statement.
“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.”
The difference is most marked in London, where homeowners are paying nearly £3,000 less each year than those renting similar properties. In percentage terms, the biggest gap is in Scotland, where renters pay an average £918 a month compared with £727 for homeowners, a saving of 21% for those on the property ladder.
The east of England is the only region where it is cheaper to rent with homeowners in the region paying £90 more each month, on average, than those renting.