Buying '£124 a month cheaper than renting'

by Daniel Jones

The amount of money within the property rentals market has been illustrated by a new finding that declared it is £124 cheaper each month to own a home than to rent one.

New research by Halifax, which has published its latest Buying vs Renting Review, showed that those who own their property will save an average of £1,488 every year in comparison with renting a place to live.

In December 2013, an average three-bedroom house in the UK attracted monthly costs of £645 to an owner. However, the same property would have cost £769 to rent.

This is the largest difference between buying and renting at any time since 2009, at which time there was only £6 a month variation in the cost of owning and renting. Indeed, these sums were £646 and £652 respectively five years ago.

Craig McKinlay, mortgage director at Halifax, said: "There has been a substantial improvement in the affordability of owning compared to renting in recent years, which has been driven by the fact that monthly home ownership costs have fallen by a third (32 per cent) since 2008."

Of course, many people in the UK don't have the funds required to put down a deposit on a house, so renting remains their only option when it comes to paying for somewhere to call home. With renting costing significantly more, it's clear that there is plenty of cash to be made for enterprising landlords.

The increasing gap between buying and renting is being driven by a sharp rise in the average monthly rents being charged by landlords, as the cost of owning a home has remained relatively stable since 2009.

Prospective landlords should certainly do their research before investing in properties, as there are plenty of regional variations to be found in terms of the return they can expect.

For instance, in London, the average renter has to pay £1,384 a month for their home, while in the West Midlands this is just £559.ADNFCR-1645-ID-801703986-ADNFCR

Published on: March 17, 2014

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