16:09 PM, 27th January 2012, About 9 years ago 4
Buying a house is still £100 a month cheaper than renting – if you have a credit rating and the cash for a deposit that a mortgage lender demands.
The average monthly cost of buying a three-bedroom house is £600 per month, while average rent on the same property is £716, according to The Halifax.
The figures were taken from the bank’s lending figures and official databases in December.
The cost of buying has dropped significantly over the past three years, mainly due to falling interest rates.
The mortgage rate for new borrowers has fallen to an average 3.63% in 2011, from 5.75% in 2008. Average house prices dropped 11% over the same period
In 2008, buying was 29% more expensive than renting, consuming 47% of monthly income. In 2011, home buying costs made up 29% of incomes.
Despite higher costs, the bank says buying is still 10.2% cheaper than renting in London.
Wales is the only region in the UK where buying is more expensive than renting.
Home buying is more expensive – with increasing estate fees, stamp duty rises and the bigger deposits demanded by lenders all contributing to a fall in the number of house purchases.
Martin Ellis, housing economist at Halifax, said: “The affordability gains for buyers relative to renters in the last three years have been significant. The average mortgage payment has fallen dramatically over recent years as a result of falling house prices and mortgage rates.
“At the same time, rents have risen due to strong demand for rented accommodation.
“Despite the improvement in the relative affordability of buying a home, the number of purchasers has continued to fall due to the ongoing challenges in raising a deposit and the considerable uncertainty over the prospects for the UK economy, which have severely constrained housing demand.”
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