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Renting cheaper than owning a home in much of UK

Renting cheaper than owning a home in much of UK
Christina Hoghton
Written By:
Christina Hoghton
Posted:
29/03/2024
Updated:
29/03/2024

The monthly cost of owning a first home is higher than the equivalent rent in nine out 12 UK regions or nations.

According to Halifax, the South West, London and Scotland are now the only regions where owning a first home is cheaper than renting. The largest annual savings are in the South West (where owners are £1,663 better off­).

Rental savings

Renters are making the biggest savings compared to first-time buyers in the East of England, where they are an average £2,325 better off each year.

Renting in the South East (£1,859), East Midlands (£1,741) and Yorkshire & the Humber (£1,731) also saw significant yearly savings when compared to owning a first home.

Kim Kinnaird, mortgages director at Halifax said: “Our latest analysis shows that, in nearly all regions across the UK, first-time buyers are better off renting than owning a similar home. In fact, the only regions where it’s cheaper to own rather than rent, are the South West, London and Scotland.

“We know home ownership can offer long term financial and living stability and that’s why we believe it’s an important step to take. Our customers want to create a secure future, so it’s a big priority for us to help people get there. However, elevated borrowing costs, alongside a lack of available homes to buy, is pushing ownership further out of reach for would-be first-time buyers in many parts of the country.

“This is why we’re major participants and big supporters of the Government’s affordable home ownership schemes, such as shared ownership and the mortgage guarantee scheme and we’re committed to helping first-time buyers fulfil their dreams of having a place to call their own.”

Nathan Emerson, Propertymark CEO, added: “Rental costs have surged in recent years and various governments across the UK have a duty to support the creation of a sustainable mix of properties within the rental sector. Mortgage tax relief was scrapped in 2015 and this created a situation of landlords unwillingly being forced to pass increased overheads onwards to consumers.

“Rent caps in Scotland and Wales have also caused considerable issues and have ultimately contributed to sharp increases in rents for many too. We need to see the UK Government and the devolved administrations introduce tax incentives to bring landlords back to the market to increase rental supply.

“Attention needs to be paid to housebuilding targets and further support for first time buyers. With inflation now nudging back down, Propertymark is extremely keen to see a reduction in interest rates as soon as possible to help uplift consumer confidence and affordability within the sales arena.”