Homeowners saved 59% less in 2018 by buying a home rather than renting compared with previous year
The amount of money saved by buying a home compared to renting in 2018 was less than half the amount in 2017.
In their latest Buying vs Renting Review, Halifax found that homeowners saved an average of £366 last year by buying a home instead of renting.
This was calculated using housing costs, which include average mortgage payments, income lost by funding a deposit, and the average spend on household maintenance, repair, and insurance costs on a three-bedroom home.
Using this method, Halifax revealed the average monthly costs of buying a home in 2018 was £729, whilst average rental payments were just £30 higher at £759; a difference of 4% and the lowest gap between buying and renting in almost a decade.
However, in 2017, buyers were saving an average of £900 per year compared to renters, representing a 59% decline in the amount saved by purchasing a house rather than renting.
On a regional basis, homeowners in London saved the most, with an average annual saving of £4,475 when buying compared with renting; a 21% difference.
Households in Yorkshire & the Humber earned the smallest saving by buying at just £361 per year, just 5% more than the costs of renting.
“The gap between buying and renting is narrowing, primarily driven by reduced first time buyer prices deposits in some regions and continuing house price growth, meaning buyers are paying more on their mortgages,” said Halifax’s Managing Director, Russell Galley.
“With more products available for borrowers, these factors combined have pushed up the price of buying quicker than the price of renting. Meanwhile, the cost of rent, household maintenance and average deposits have remained broadly flat.”
According to recent data by Zoopla, average property prices in UK cities have increased by 2.9% on an annual basis.