New research by Halifax reveals that UK first-time buyers are £27,000 better off than renters.
As mortgage rates plummet, first-time buyers are finding that they can save £900 a year by choosing to buy rather than rent.
The research found that the average cost of a three bedroom home in the UK was £679 per calendar month (December 2017) whereas the average rent for a similar property came in at £754 per calendar month.
If you’re currently renting in Yorkshire and Humber, according to Halifax’s research you could save an average of £589 per year by investing in your own home. East Midlands renters can save an average of £1,134 per year, while West Midlands tenants stand to save £1,229 per year by buying a home.
MD of Halifax, Russell Galley, puts the widening gap between the cost of renting versus buying down to the competitive market meaning lenders must offer attractive low interest rates on mortgages. But while buying rates have significantly reduced, the cost of renting has remained relatively unmoved for several years now.
“Despite having to put down a sizeable deposit up front, homeowners are overall better off than renters in all parts of the UK,” says Russell. “But those who are unable to get onto the property ladder because they can’t raise enough cash are paying more by renting.
“The good news is that record numbers of first-time buyers are still taking their first step on to the ladder and helping to bridge this gap thanks to a continued low-rate environment and government schemes including Help to Buy.”
If this positive buying environment is to continue, buyers must take advantage of support schemes and low rates while they are available. The government’s Help to Buy scheme is coming to an in 2020, meaning buyers will no longer be able to take advantage of the 20% equity loan to help top up their deposit when buying their new home. And with interest rates remaining low, today’s mortgage market is in favour of the buyer; it’s the perfect time to buy a home.
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