An interesting new piece of research by Lloyds Bank has revealed that first-time buyers in the UK are on average £865 (10%) a year better off with their own home compared to those who rent.
The average monthly buying cost (including mortgage payments) associated with a first-time buyer purchasing a three bedroom house stood at £672 in December 2015; £72 (or 10%) lower than the typical monthly rent of £744 paid on the same property type.
This represents an increase of £105 over the past year compared with the annual saving associated with buying a home instead of renting of £760 in 2014. The difference has grown as average monthly rents have increased more steeply (by £24 – a 3% increase) when compared to a £15 (2%) increase in monthly buying costs.
Average monthly buying costs (£965) in the South East are higher (£65) than average monthly rental costs (£900) – the only UK region where renting is the cheaper option. On the other hand, buying is most affordable compared to renting in cash terms in the North West, where the typical first-time buyer is paying £133 a month less than the average renter (£525 against £658); followed by Scotland (£525 against £645, a saving of £120), and Wales (£471 against £574, a saving of £103).
According to Lloyds, the number of first-time buyers is estimated to have totalled 310,000 in 2015; largely unchanged from 311,700 in 2014. This represents an increase of almost two-thirds (60%) since the number of first-time buyers fell to a recent low of 193,700 in 2011.
The number of first-time buyers accounted for 46% of all house purchases made with a mortgage in 2015. This share has grown from 36% at the start of the housing downturn in 2007.
Contact our Solicitors
For further information on our property and conveyancing services, please contact us today at our Stirling office on 01786 235 235, or at our Tillicoultry office on 01259 753330, to speak to our solicitors.