Buying a First Home is Now Cheaper than Renting

Added on March 25th 2016

Buying a First Home is Now Cheaper than Renting

UK homeowners are now paying less in mortgage payments each month than tenants pay in rent, even if they have a large loan.

The average monthly mortgage repayment for first-time buyers is £805 per household, compared to the £995 average that UK tenants pay in rent every month. This figure is based on the average first-timer buyer’s 21 per cent deposit, and over a year, owners are on average £2,300 better off than tenants.

This figure doesn’t include, however, the running costs of maintaining a home – repairs, redecoration and so forth – that are the responsibility of the landlord.

The UK’s South West sees the biggest difference, with homeowners paying £192 less than tenants monthly; in London they pay £179 less. There’s much less difference in the East of England, where tenants pay just £2 more a month than owners.

It’s hard, however, to take that first step on the property ladder. Santander found that the average 21 per cent deposit on the average first-time buyer price of £212,610 was £44,648. Prospective first-time buyers often find that paying hefty rents means they can’t save effectively for a deposit, especially in these times of rapid house price increases.

One option is a governmental Help to Buy equity loan (which can contribute up to 20 per cent of the price) or a mortgage guarantee that means only a five per cent deposit is needed to secure a property. With the average first-time house price this works out at around £10,600, which is just over £5,000 each for a couple.

A common misconception is that a mortgage is more expensive than renting and that it puts people under greater financial pressure, but it’s simply not the case. Would-be buyers need to remember that not only could they be saving more than £2,000 each year, but with each mortgage payment, they own more of their property.


« Back to Latest News
Back To Top

Our offices are open

  • Mon-Fri: 8:30am - 6pm
  • Sat: 9am - 4pm
  • phone icon
    © 2022 Elliot Oliver Estate Agents. All rights reserved.
    Privacy Notice | Complaints Procedure | CMP Conduct and Membership Rules | CMP Client Money Protection | Cookie Policy| Sitemap

    Elliot Oliver Sales And Lettings Limited is a Company registered in England and Wales under company number 08837847. The Registered Office address is 101 Promenade, Cheltenham GL50 1NW. VAT No. GB. 181797466