Buying A Home Is Now Cheaper Than Renting, Report Claims
Monthly mortgage payments for first-time buyers are now more than £100 cheaper than renting the equivalent property, according to research.
A report from Halifax published on Monday said the average monthly cost of buying a two-bedroom property in July was £567, compared to £677 to rent the equivalent home.
The bank said the figures were a turnaround from 2008 when the average cost of buying was £212 more than the average rental cost.
Suren Thiru, a housing economist at Halifax, said the decline in the cost of buying a property reflected the drop in both mortgage rates and house prices since 2008 as well as a marked increase in the average rent paid over the past year.
"However, while these affordability gains are welcome, conditions in the housing market for those looking to get onto the property ladder remain challenging." she said.
"Difficulties in raising a deposit and the current economic uncertainty are likely to mean that number of prospective first-time buyers entering the market will remain relatively subdued in the near term."
Average mortgage rates have dropped to 3.84 per cent from 5.91 per cent in 2008. And the average house price has fallen by 14 per cent to £124,378.
However despite the price of mortgage repayments becoming cheaper than renting, figures from the Council of Mortgage Lenders show the number of first-time buyers in the first half of 2011 was 23 per cent lower than it was in the same period in 2008.
The drop has been put down to the economic troubles over the last three years as well as the size of deposit required, £27,127, to secure a first home.