Home Money Revealed: The only three areas of Britain where you’d now be better off buying rather than renting…

Revealed: The only three areas of Britain where you’d now be better off buying rather than renting…

by Elijah
0 comment
The only regions where it is cheaper to own rather than rent are the South West, London and Scotland, according to the latest data from Halifax

In most regions of Britain, owning a house is more expensive than renting a similar property.

In nine of the 12 regions or countries in Britain tracked by Halifax, it is more expensive to be a homeowner than a renter every month.

These areas include the North East, for example, where owning a home typically costs £1,030 a month in mortgage payments, compared to the £907 spent on rent.

In contrast, there are only three regions where owning a first home is cheaper than renting, and these are the South West, London and Scotland.

The only regions where it is cheaper to own rather than rent are the South West, London and Scotland, according to the latest data from Halifax

The only regions where it is cheaper to own rather than rent are the South West, London and Scotland, according to the latest data from Halifax

UK average monthly costs of home ownership and rent by region
Region Average monthly homeownership costs* Average monthly rental payment Monthly difference between owner-occupied home and rent % Monthly difference between owning and renting a house € Annual difference between owning and renting a house €
North-East £827 £801 -3% -£26 -£312
Yorkshire and the Humber £954 £809 -18% -£144 -£1,731
North West £1,030 £907 -14% -£123 -£1,475
East Midlands £1,081 £936 -15% -£145 -£1,741
West Midlands £1,118 £1,056 -6% -£62 -£744
East of England £1,546 £1,353 -14% -£194 -£2,325
Wales £953 £864 -10% -£89 -£1,069
South West £1,298 £1,437 10% £139 £1,663
Southeast £1,705 £1,551 -10% -£155 -£1,859
Greater London £2,241 £2,253 1% £12 £148
Northern Ireland £779 £692 -13% -£88 -£1,051
Scotland £953 £988 4% £35 £424
Britain £1,231 £1,258 2% £27 £319
Source: Halifax

Overall, the cost of owning a home is cheaper for first-time buyers in the UK, with an average spend of £1,231 per month.

It compares to a cost of £1,258 per month for renters – or £27 more per month.

However, this monthly difference in costs is the smallest difference between homeownership and rental that Halifax has recorded since 2019.

The annual difference in verse rentals is currently just £319, and was at a similar level of £330 in 2019.

In 2021, the difference rose to £1,338 during the pandemic, showing how much more expensive renting was than buying the same type of property.

The biggest difference in the past decade was in 2015, when it cost £744 a month to rent a three-bedroom property, compared to £612 to cover ownership costs. It led to an annual difference of £1,581.

UK average monthly home ownership costs and rental payments
Year Average monthly cost of owning a home Average monthly rental payment Monthly savings for owners % Monthly savings for owners £ Annual £ difference between owner-occupied home versus rent
2013 £578 £692 16% £113 £1,361
2014 £605 £720 16% £116 £1,388
2015 £612 £744 18% £132 £1,581
2016 £629 £759 17% £131 £1,570
2017 £627 £754 17% £128 £1,533
2018 £669 £759 12% £90 £1,082
2019 £719 £747 4% £28 £330
2020 £742 £821 10% £80 £956
2021 £763 £874 13% £111 £1,338
2022 £973 £1,013 4% £40 £476
2023 £1,231 £1,258 2% £27 £319
Source: Halifax

The dream of owning a home remains increasingly out of reach for many first-time buyers due to high house prices and lenders requiring a large down payment.

Amy Reynolds, from estate agents Antony Roberts, said: ‘Most people want to own their home, which is why politicians base their entire policy on encouraging home ownership.

‘The challenge in London is simply a matter of affordability, but with such high rents it is the same challenge for tenants as it is for homeowners.

With the Bank of Mum and Dad the only reason many first-time buyers can get into the housing market, a new two-tiered system is emerging: a system of wealth for those who have it, and long-term rental for those who don’t.

Amy Reynolds – real estate agent

‘Renting in London can be a lot more expensive than a mortgage on the same property, so it’s best to own it, but where does the deposit come from?’

She said the realities of the property market meant that renting was no longer a short-term alternative to buying a first home.

She explained: ‘While home ownership remains a key ambition for many, the realities of the housing market, economic conditions and individual circumstances can influence the extent to which renting is seen as a temporary step or choice for the long-term.

‘For many, owning their own home will remain just a dream and those people are trapped in a rental system that is not fully supported by the government.

‘Either the government must support landlords and cut taxes so that profits can be made, or it must provide sufficient rental housing itself, providing stability for the many who need to rent long-term.

‘With the Bank of Mum and Dad, the only reason why many first-time buyers can get into the housing market is to create a new two-tiered system: a system of wealth for those who have it, and long-term rentals for those who don’t . .’

In nine out of twelve regions or countries in Britain it was more expensive to be a homeowner than to be a renter

In nine out of twelve regions or countries in Britain it was more expensive to be a homeowner than to be a renter

In nine out of twelve regions or countries in Britain it was more expensive to be a homeowner than to be a renter

Halifax’s calculations were based on the cost of owning a three-bedroom home with a mortgage, compared to renting a similar type of property.

The average cost of ownership includes mortgage payments and loss of income from financing a down payment instead of saving, along with expenses on household maintenance and repairs and insurance costs.

They do not include one-off costs such as stamp duty, valuation and legal fees.

Regional differences

Costs for those who own or rent a three-bedroom home vary from country to country.

The biggest savings available to those who rent a home rather than own one are in the east of the country.

In that region, renters are on average £2,325 better off every year.

Renters are also better off than first-time buyers in the South East by an average of £1,859, as well as in the East Midlands by £1,741 and in Yorkshire and the Humber by £1,731.

1711563279 34 Revealed The only three areas of Britain where youd now

1711563279 34 Revealed The only three areas of Britain where youd now

The choice is limited for those looking for areas where it is cheaper to own rather than rent.

The South West, London and Scotland are now the only regions where owning a first home is cheaper than renting.

The biggest savings for first-time buyers compared to renters are in the South West, where homeowners are £1,663 better off.

Kim Kinnaird from Halifax said: Our latest analysis shows that first-time buyers in almost all regions of Britain are better off renting than owning a similar home.

‘In fact, the only regions where it is cheaper to own rather than rent are the South West, London and Scotland.

“We know that home ownership can provide long-term financial and life stability and that’s why we believe this is an important step to take.

‘However, high borrowing costs, alongside a lack of available homes to buy, are putting ownership further out of reach for potential first-time buyers in many parts of the country.

‘This is why we are committed to helping first-time buyers realize their dreams: a place they can call their own.’

Average home price for starters, mortgage advance & deposit, 2022 & 2023
Region 2022Average house price Average mortgage Average deposit Average down payment (% of house price) 2023Average house price Average mortgage Average deposit Average down payment (% of house price)
North-East £174,862 £141,275 £33,587 19% £173,824 £138,959 £34,865 20%
Yorkshire and Humberside £201,249 £159,826 £41,423 21% £202,820 £158,999 £43,821 22%
North West £217,938 £173,585 £44,353 20% £217,831 £170,610 £47,222 22%
East Midlands £237,980 £186,098 £51,882 22% £233,890 £180,433 £53,457 23%
West Midlands £237,386 £185,081 £52,305 22% £241,109 £186,435 £54,674 23%
East of England £355,549 £268,840 £86,709 24% £346,484 £256,745 £89,739 26%
Wales £199,823 £164,090 £35,733 18% £196,995 £158,973 £38,021 19%
South West £300,571 £225,267 £75,304 25% £288,935 £214,027 £74,908 26%
Southeast £393,735 £296,394 £97,341 25% £381,466 £283,485 £97,981 26%
Greater London £586,756 £397,563 £189,193 32% £559,263 £368,433 £190,830 34%
Northern Ireland £163,955 £130,650 £33,304 20% £166,394 £128,468 £37,926 23%
Scotland £197,986 £163,863 £34,122 17% £196,998 £158,599 £38,399 19%
Britain £279,260 £214,405 £64,855 23% £270,602 £204,573 £66,029 24%
Source; Halifax
money item html_snippet module" data-channel-color="money"> Best Mortgages

You may also like