Renting is over £130 a month more expensive on average than buying.
According to Halifax, which included in its buying costs mortgage payments, income lost by funding a deposit rather than spending, insurance, and household maintenance and repair costs, the average monthly cost of buying a three-bed home was £600 in June.
This was £132 or 18% less than the average monthly rent of £732 for the same property type.
Over the last year, buying costs have dropped by 3%, while the cost of renting has gone up by 5%.
Last year, the monthly cost associated with buying was £78 or 11% less than renting.
By contrast, in 2008, average home buying costs were £1,048 per month, or 45% – £324 – more than the average rent.
Monthly home buying costs currently account for 29% of average disposable income, down from 54% in 2008
However, the Halifax research points out that despite the improvement in affordability, the number of buyers entering the housing market remains weak. There were 535,000 buyers with a mortgage in the 12 months to June, 33% fewer than in the same period to June 2008.
While the research highlights the high deposits required, the same high deposits would be helping to keep mortgage repayments down, with the purchase repaying the loan on, for example, a 75% LTV mortgage rather than a 90% or 95% loan.
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Comments
Yes exactly, I agree. These days getting a resident on rent seems to be more costlier than purchasing. So, due to decline market of letting, people prefer to buy a resident instead of getting on rent. The letting agency market had declined in past few years.
Bang on Michael!
You just missed 'it's OK for my dog (I saw it in a rescue home, we didn't think you'd mind) to crap in the garden for 12 months because I'll be gone after that' and I think you've got it covered.
Seriously, there are a lot of people who are just not cut out for property ownership - it's not just about the cost.
OK to all above, but what Halifax have not placed a £ value on is the freedom that many tenants obtain from watching Corrie & Eastenders where an owner would be weeding the garden, clearing gutters, fixing the fence, mowing the lawn, trimming trees & shrubs etc.
Then of course the sheer joy of not needing to ever re-pressurise a combi, you just get the landlords plumber to do it. Or fix a leaking tap, or open a window to stop the mould caused by sealing them all winter with your wet clothes on the radiator ... or of course not having to clean mould from bedroom and bathroom walls.
The pleasure too as a tenant of having special exemption from needing to sort out recycling waste, and being allowed to pile up garbage bags beside the bin, with its lid wide open.
The marvellous way that mail forwarding just happens by itself when you are a tenant too. Oil from leaking engines is never an eyesore when you rent, and of course kitchens are such great places to work on cars & bikes, washing parts in the sink with petrol.
The way that when you re-paint rooms in deep purple, one never need mask light fittings, skirting boards, carpets and its such an easy whizz to paint over deep purple with magnolia isn't it?
Who needs a drill & rawlplugs when its quite easyto put screws & nails in the plaster & when patches fall off, well a bigger picture is all you need.
Open fires, the chimney never needs sweeping and old pine pallets burn just great too. And the ash & nails will eventually vanish into the lawn, all by itself.
Regular payments? Nah, with renting its a flexi system, you can miss quite a few really, no matter. Pets, smoking, growing cannabis in the spare bedroom .... easy mate.
Yup, renting sure has a lot of benefits that Halifax have failed to factor into their financial equation. In fact, gawd knows why anyone buys when you can rent.