First time buying gets better than renting

first-time-buyerFirst time buyers are on average £864 a year better off than those who continue to rent. The average cost of a three bedroom house was at £672 a year in December, which was 10% lower than the usual £744 paid on a alike UK rental property, according to a new research from Lloyds Bank.

The difference is largely down to a 3% rise in rents. The current financial gap between buying and renting of £865 is more than double the annual saving of £397 in 2010. Over this period, the average rent has grown by 23% while average buying costs increased by 17%. Buying has constantly been the cheaper option since 2009. Buying is more affordable than renting in all regions away from the South East, where average monthly buying costs of £965 are higher than monthly rental costs of £900.

Mike Songer, mortgage director, Lloyds Bank, says: “Homeowners have been helped by record low mortgage rates and rising private rents, making buying a home better option than renting. 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.”

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