Buying a home costs £1,300 less than renting
First-time house buyers could save over £1,300 per year by purchasing a property rather than renting one.Research by Halifax, the country's largest mortgage lender, reveals the average monthly mortgage costs of owning a three bedroom house for a typical first-time buyer in the UK were £677 in June 2014 - £110 lower than renting the same kind of property.There has been a significant decline in the cost of purchasing a home relative to renting. Five years ago, buying a house was £37 per month more expensive than renting.This was attributed to the decline in the average mortgage rate, from 4.92 per cent in June 2009 to 3.09 per cent now, cutting the average monthly payment by £57.In the past year, the gap has widened further, with a £25 rise in the average buying cost more than offset by the £42 rise in rental costs.Lenders have become more confident about offering mortgages to borrowers with smaller deposits, spurred on by government-backed initiatives such as Funding for Lending and Help to Buy.The trend can be seen in every part of the country apart from the East Midlands and East Anglia, with the most pronounced advantages for buyers in the West Midlands, London and Wales.As the costs of purchasing a home have fallen, the number of first-time buyers has risen by 29 per cent in the past year. This group now accounts for 45 per cent of all house purchases, compared with 38 per cent in 2009.Halifax's mortgage director Craig McKinlay described the decline in the cost of mortgages as "encouraging"."Buying costs have been remarkably stable for much of the past five years making home ownership a more attractive option," he added. "With greater availability of mortgages that require smaller deposits, the property ladder has also become even more accessible for those who can afford the monthly costs of owning but had previously not been able to save the necessary deposit."
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