Homeowners are better off than renters every year

Homeowners are nearly £500 better off a year than a renter, research from Halifax reveals

It says that the monthly cost of owning a home for first-time buyers is now £971, on average.

That is £42 or 4% cheaper than the cost of renting an equivalent property.

Owning vs Renting Review looked at the housing costs

The lender’s latest Owning vs Renting Review looked at the housing costs for first-time buyers with a mortgage on a three-bed home compared to the average monthly rent of the same property type.

Halifax says that the homeowner is paying £971 every month on their mortgage, while renters are paying £1,013.

That difference equates to nearly £500 being saved every year for owners.

But the gap is down from its peak in 2016, when owners were saving £1,567 annually – thanks to rising interest rates.

‘Becoming a homeowner can bring significant savings’

Kim Kinnaird, the mortgages director at Halifax, said: “Our latest analysis shows that becoming a homeowner can bring significant savings for people.

“Nationally, homeowners are almost £500 better off than renters each year.

“These benefits are felt most keenly in London, where homeowners are saving nearly £3,000 annually compared to those renting similar properties – a significant figure.

“In fact, the only region where it is cheaper to rent than own is the East of England, where renters are holding onto £90 each month, compared to owners.”

‘Making the move from renting to home ownership can be difficult’

Ms Kinnaird added: “Of course, making the move from renting to home ownership can be difficult for many, as raising a sufficient deposit and then finding the right property can be challenging.

“While a predicted fall in house prices this year will be welcome news for those looking to buy their first home, it doesn’t change the fact that getting on the property ladder remains expensive – a problem that is compounded when rents are high, impacting the ability to save.”

Greatest gap between owners and renters

However, the greatest gap between owners and renters in the UK, in percentage terms, can be found in Scotland.

Halifax says that those renting there pay an average £918 per month, compared to £727 for homeowners – a saving of 21% for those on the property ladder.

It’s a different story in the East of England, the only region or nation in the UK where it is more expensive to own a property than rent the equivalent.

Homeowners there now pay £90 more each month, on average, than those renting.