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

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.

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.

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.

‘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 . .’

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.

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.’