First-time buyers £862 better off than renters a year
The average monthly cost of buying a three bedroom house was £672 in December, £72 cheaper than the typical monthly rent of £744 paid on the same property type.
Lloyds said the difference has grown as rents have increased more steeply at £24 a month, or 3%, while monthly buying costs have risen £15, or 2%, over the past year. The gap between buying and renting has more than doubled since 2010’s figure of £397.
Purchasing a home has been the most affordable option overall for the past seven years apart from in the South East where buying costs are £65 higher than rents per month at £965 and £900 respectively.
Buying is most affordable compared to renting in the North West, where first-time buyers pay an average £133 less per month compared to renting at £525 and £658 respectively. It is followed by Scotland which offers a saving of £120 and Wales with a saving of £103 a month.
The number of first-time buyers totalled 310,000 last year, a marginal drop from 311,700 in 2014. First-time buyers accounted for 46% of all house purchases made with a mortgage in 2015, a share which has grown by 36% since the recession.
Mike Songer of Lloyds Bank said the gap between buying and renting has been achived through record low mortgage rates and rising private rents.
“This steady improvement in the costs of buying compared to renting has helped to boost the number of first-time buyers over the past few years, who now account for 46% of all home sales in 2015 – up from 36% in 2006. Official government schemes, such as Help to Buy have also played a part in helping first-time buyers as have improving economic conditions,” he said.