With a generation of young would-be buyers dubbed “rentysomethings”, many long-term tenants aged between 25 and 35 can only dream about getting on to the property ladder.
According to the Halifax Buying vs. Renting Review, buying a home is on average almost a fifth lower than renting.
While the average monthly cost for renting a three bedroom house stood at £732 in June 2012, the average monthly costs for buying the same home would be £600 – a difference of 18%.
Further figures from the survey revealed that while the last year has seen buying costs fall by 3%, the cost of renting has increased by 5%.
The research also found that the buying landscape has changed considerably over the last four years. In 2008, average monthly home buying costs (£1,048) outstripped monthly rentals costs (£724) by 45%.
In terms of the proportion of average UK disposable income used for buying or renting, the landscape changed considerably since the economic downturn started in 2008.
In 2008 monthly home buying costs were more than half of the average disposable income, compared to a current figure of 29%. In contrast, renters have to earmark more of their disposable (35%) to meet housing costs compared to homeowners.
“It is clearly encouraging that there has been a significant decline in the cost of buying a home for those able to enter the housing market since 2008,” said Martin Ellis, a housing economist at Halifax.
“The improvement is due to a combination of lower mortgage rates and declining house prices. In contrast, market conditions for renters have deteriorated as rents have risen in the past two years.”