New research has revealed that buying a house is more affordable than renting in all 12 UK regions, with the difference most salient in London.
The bi-annual Halifax Buying vs. Renting Review found that the cost of buying a home in the UK is 16% lower than renting.
The average monthly costs associated with buying a three bedroom house stood at £621 in December 2012, which is £120 lower than the typical monthly rent of £741 paid on the same property type.
This adds up to savings of £1,440 over the course of a year, although this discrepancy varies with different regions.
Typical homebuyers in London pay 15% (£193) a month less than the average renter (£1,101 vs. £1,294). In contrast, there is very little difference, with average monthly buying costs just £1 lower than average monthly rental costs (£482 vs. £483).
The cost of housing has soared for both tenants and homeowners over the last decade. According to the UK Payments Council, between 2001 and 2011, the amount we collectively spent on rent has shot up by 104% whilst spending on mortgages has risen by 99%.
Buying has been cheaper than renting since 2009, with the significant improvement in affordability largely attributed to a 34% decline in home buying costs over the past four years.
Martin Ellis, housing economist at Halifax, said: “The sharp decline in home buying costs over the past few years, combined with a significant increase in rents, has greatly improved the financial attractiveness of buying a home. This shift has contributed to the increase in the numbers of house purchases, which reached a five year high in 2012.
“Despite this pick-up, home buying levels remains well below the levels at the height of the market. Today, concerns over job security and raising a deposit are the main obstacles to people buying their own home.”