If you’re one of the many people stuck in the vicious renting cycle, we have some more bad news for you. It turns out that owning a home could in fact be cheaper than renting in every part of the UK.
First-time buyers could potentially save an average of £2,268 more than renters a year. That’s provided they can get on the housing ladder and afford the £51,000 deposit, research has found.
The study, from Santander Mortgages, weighed up the potential cost of home-owners’ monthly mortgage payments against what they could expect to pay out by renting.
It found that, across the UK, there were potential savings to be made by being on the property ladder. But it also discovered that the average first-time buyer deposit needed is £51,952.
Once on the property ladder, first-time buyers could expect their monthly mortgage repayments to come to £723 on average – compared with an average rent of £912 per household, the report found.
This means home-owners could save an average of £189 a month – or £2,268 a year – compared with renters, it said.
In London, the savings are potentially greater, with the average monthly rent £289 higher than monthly mortgage payments, adding up to a potential saving of nearly £3,500 per year.
However, first-time buyers in London face raising £135,000 for a deposit, according to the calculations. Santander found the smallest difference between rent and mortgage payments is in the East of England, at £43 per month – or just over £500 a year.
The research, which used average rents from the Homelet index and Office for National Statistics (ONS) house price figures, made several assumptions about a first-time buyer’s mortgage payments, including them having a 24% deposit, a mortgage rate of 2.48%, and be paying off what they owe over 25 years.