The buying vs. renting battle continues – but which is winning?
Well, according to a new study by Halifax, buying a home is still cheaper than renting one -despite the continuing increase in house asking prices.
According to its figures, homeowners in the UK pay £124 less a month than people living in a rented property, meaning their annual costs are £1,488 lower.
Owners of three-bedroom houses faced average monthly costs of £645 in December, or 16% less than the amount they would have paid if they didn’t own the property and rented it instead (£769). Halifax noted that this was the widest gap in homeownership and rent values since 2009, when the difference was calculated at just £6 based on average monthly costs of £646 and £652, respectively.
The greater difference is chiefly a result of the hefty £100 uptick in average monthly rents since 2009. Meanwhile, the average monthly cost of owning a home has remained broadly intact during the period.
Things on the rental market were much different five years ago when renters paid 31% less than property owners, Halifax noted.
Buying a house rather than renting is the option making most sense to those living in London, where owners were found to pay £188 less than renters.
In the last couple of years, owning a home has become a much more affordable option than renting, chiefly thanks to a 32% drop in home ownership costs since 2008, the lender’s mortgage director Craig McKinlay said. The generally stable cost of home ownership continues to fuel consumers’ desire to jump on the property ladder, especially when taking into account the greater availability of mortgages requiring lower deposits, he added.
Are you a buyer or a renter? If you’re yet to buy your first home, now could be the perfect time to get onto the property ladder.