Buying is over £130 cheaper per month than renting
Interest only mortgages cost significantly less than renting
September 17, 2012
The cost of buying a home in the UK is now 18% cheaper than renting. The average monthly cost of buying a three bedroom house was just £600 in July compared to £732 for renting. According to a new report from mortgage lender Halifax, even when mortgage repayments and maintenance costs were included owning a home was significantly cheaper than renting.
In the last four years the cost of buying has fallen substantially. Since 2008 the monthly costs of owning a home have fallen by 43% from £1,048. Back then owning a home cost £324 a month more than renting. This is largely due to a fall in house prices coupled with record low mortgage rates. The Bank of England’s base rate has not budged since March 2009. Consequently monthly home buying costs now only account for 29% of average disposable income. The same figure was 54% in 2008.