The Halifax claims that the average cost of renting a three bedroom home is now £769pcm, some 16 % more than the mortgage and associated costs if the same house was owned.
This is the largest ‘RENT v OWN’ difference since 2009.And the gap is being driven by average monthly rents increasing by over £100 since 2009 while average monthly ownership costs have remained relatively unchanged over the same period, thanks to the unprecedented – and POSSIBLY soon-to-end – low costs of borrowing.
There are, of course, significant regional variations. Owning a home is most affordable compared to renting in London with the typical buyer paying £188 a month less than the average renter (£1,196 against £1,384).
On the other hand in the West Midlands and East Anglia the difference is marginal with average monthly buying costs just £6 lower than average monthly rental costs (£553 against £559 and £633 against £640 respectively).
The ‘pro-ownership’ findings do not take into account the deposit required by buyers – a long-term factor which forces many people to rent rather than purchase.
If you want to look at your own financial situation why not speak to one of our mortgage consultants ….
The Halifax figures are based on average rental payments for a three bedroom house over 12 months to December 2013; the purchase figures include not only mortgage costs for a similar property, but allowance for household maintenance, repair, minor alterations and insurance costs, too.