Halifax reveals buying is more affordable than renting

Halifax has released their latest research which shows that compared to people that rent, annual savings are tightening for first time buyers. Although despite the data which shows figures dropping to £651 in 2016 compared to £879 in 2015, it is still more affordable to buy than rent in the UK.

First time buyers in London pay on average £1420 month which is 10% lower compared to the average rent paid of £1581 which saves a total £1927 annually. Looking at other regions, for example East Anglia, there is only a slight difference with people renting paying on average £743 with home buyers paying £736.

A 45% increase for first time buyers has resulted in higher buying costs despite mortgage rates for new purchases being at an unprecedented low.

Martin Ellis, housing economist at Halifax, said: “Although the average costs associated with buying costs have grown at a faster rate than average rents over the past few years, owning a home is still the more financially attractive option. However, the gap has narrowed since 2011 because of the rising prices of a typical first-time buyer house.

The size of deposit that is often needed is often a major barrier to overcome before the potential financial advantages of home ownership become clearer. Whilst deposits can raise the upfront cost of buying, it is also an important and attractive form of longer-term savings for homeowners, and with rising house prices, it helps contribute towards higher housing wealth.

While prices are at an elevated level, the number of first-time buyers getting on the housing ladder continues to rise and this group now accounts for half of all new home purchase financed by a mortgage. Improving economic conditions, lower rates and government schemes such as Help to Buy, have played a key part in helping first-time buyers.”

You can read the full article published in Property Reporter

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