It"s £1,500-a-year cheaper to own a house than rent

By

Adam Uren

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It is now almost £1,500 a year more expensive to rent a family-sized home than it is to own one, research from Halifax has found.

Owners of a three-bedroom house are reckoned to be on average across the UK £124 a month better off than someone renting it, even taking into account maintenance. repairs, alterations and insurance on top of mortgage payments.

The average monthly cost of owning such a house stood at £645 in December, Halifax said, which is 16 per cent lower than the £769 typical monthly rent on a property of the same type.

Cheaper to own: A family home costs on average just under £1,500 less to own than to rent, Halifax found.

It is cheaper to own in all regions of the UK, but the average is dragged up because of the exorbitant rental market in London, where renting is a massive £188-a-month more expensive – or £2,256-a-year.

But Halifax, which used a range of sources for its research, said the difference is more marginal in the West Midlands and East Anglia, where it is £6-a-month cheaper to own.

Halifax said that the gap between owning and renting costs has been partly driven by average monthly rents rising by over £100 since 2009.

In 2008, home ownership was £226 a month more expensive than renting.

WHERE CAN YOU SAVE THE MOST BY OWNING YOUR HOME?

The Bank of England base rate meanwhile, which has been held at a historic 0.5 per cent low since 2009, has helped to keep mortgage payments relatively affordable, while Government schemes such as Help to Buy have also boosted the mortgage market.

But some concerns have been raised by experts about how affordable mortgages will be for some people when interest rates eventually start to rise.

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 since 2008.’

Comments (14)

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David,

Sussex,

41 minutes ago

760 quid to rent out a 3 bed house? Righto!

Emma.D,

Itchycoo Park, United Kingdom,

3 hours ago

I can’t afford a deposit. If I was to scrape together a 10% deposit, I’d still have to find around £8000. Also, I’m heavily in debt, so I doubt I would get a mortgage.

Zeit Geist,

Venus Project, Ukraine,

3 hours ago

Surely it is cheaper to pay no rent, like Ian Duncan-Smythe, who lives rent and mortgage free in a country pile wth acres of land and at least four spare bedrooms, owned in trust by his aristocratic family.

Zeit Geist,

Venus Project, Ukraine,

3 hours ago

Rent is robbery. If you have a house to rent out, you already have too many houses.

Kilo Charlie,

My World, Bermuda,

44 minutes ago

Somewhat lacking in entrepreneurial acumen I think?

frankie mcgill,

manchester,

4 hours ago

Have you factored in those who are renting with a view to buying without the need of a mortgage? The return i get from my house fund more than pays the rent and i expect i will save quite a few quid by not paying thousands upon thousands of pounds in interest to a bank just to bring into existence the debt required to buy a home.

Rigsby,

Pity the Crashist, United Kingdom,

3 hours ago

@Frankie – of course, once you’ve spent your ‘house fund’ on a property, you’ll then lose the financial return it generates. As you claim your ‘house fund’ is currently generating enough to pay your rent, I assume it must be generating more than say 5%? I don’t expect for a moment the penny will drop, but I’d give this phenomenon some thought.

Rigsby the merciless,

EU London, United Kingdom,

1 hour ago

Yes Frankie. The promissory note made by you to fund the mortgage is stolen by the banks before you repay the credit money exchanged for it. But don’t expect that chap from Nottingham to understand it.

Kilo Charlie,

My World, Bermuda,

4 hours ago

Rob- good point you make. Bearing in mind that things are not made to last these days, maintenance is constant. A new boiler installation, not a cheap nasty one, costs around £1500-£2000 fitted. Kitchens and bathrooms are heavy traffic areas and also need constant attention. Of course it’s better to own than to rent, but you do need to take all this into account.

OAP,

Nantwich,

5 hours ago

The problem with renting is that even when you retire you still have the rent to find on a much reduced income. If you pay off your mortgage before you retire then you are rent free in your old age. I couldn’t afford to rent on my pension.

Rob,

berkshire, United Kingdom,

5 hours ago

Have you included the cost of insurance and maintenance that a landlord would normally cover for renters. No you have not.

DAME IAINDUNCANSMITH,

TORY REGIME LAND, United Kingdom,

5 hours ago

IT IS CHEAPER WITH NO MORTGAGE, PEOPLE WHO HAVE NO MORTGAGE OR RENT TO PAY SPEND MORE IN THE WIDER ECONOMY

Do you want more money spent at your business?

Then what needs to be done is the cost of living needs to come down.

The way to do this is to cap interest on mortgages at 1% and allow homeowners to have interest only mortgages.

For example if I borrow £200,000 to buy a home with a 4% interest and repayment mortgage I would have to pay about £16,000 a year to service it.

If I was just paying 1% interest only for the mortgage I would be paying about £2,000 a year, leaving me £14,000 a year to spend in the economy.

This would also benefit any employees as their cost of living would go down

Taxes would go down as we would save many £BILLIONS every year in housing benefit ( I would say £20 billion a year could be saved of taxpayers money).

Who benefits under the current system? BANKS

Who would benefit under the 1% interest only mortgage system EVERYBODY ELSE

Rigsby the merciless,

EU London, United Kingdom,

1 hour ago

Yes IDS. But the banks steel your mortgage promissory note and sell it on which means they are no longer the bearer of your promise to pay bearer. They want house prices to rise as each new mortgage promissory note is bigger thus more profits up front.

Henry,

Reality, United Kingdom,

19 minutes ago

Rigsby as hard as STEEL is it’s STEAL!

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It"s £1,500-a-year cheaper to own a house than rent