Buying is cheaper than renting across all of the UK

According to a new report from Santander, potential first-time buyers would have lower monthly outgoings if they bought a property than they do renting.

Related topics:  Property
Warren Lewis
14th December 2015
rent blocks

In every region of the UK, average monthly rental prices now surpass those for the average mortgage repayment.

According to the bank’s research, would-be buyers could save themselves £2,300 a year if they were able to purchase their own property. The average monthly rent in the UK is currently £995 per household compared to monthly repayments of £805 for the average first-time buyer household, meaning homeowners could save an average of £190 a month or £2,3005 a year.

Prospective first-time buyers in the South West are set to make the biggest monthly savings by making the switch from renting to property ownership as average monthly rents exceed mortgage payments by over £192. First-time buyers in London, where rental prices are 56 per cent higher than the UK average, would see themselves £179 better off per month. At the other end of the scale are those living in the East of England, where typical first-time buyer monthly mortgage payments exceed average rents by only £2.

UK Region

Average house price

Average rent per month

Average monthly mortgage bill with 21% deposit

Difference between rents and mortgages

South West

£  187,416




Greater London

£  363,555





 £  137,504





£  129,582




North West

£  137,874




Yorks & Humber

£  136,834




West Mids

£  151,224




East Mids

£  144,712




North East

£  121,072




South East

£  246,023





 £  215,082





 £  212,610




Miguel Sard Managing Director of Mortgages, Santander UK said: “People assume that buying a property will put them under greater financial pressure, but often the reverse is true. With annual savings averaging well over £2,000, this can really mount up over time and of course once the mortgage is paid off you have a valuable asset to show for it.

Many prospective first-time buyers see the cost of saving for a deposit as prohibitive, but there are many deals available for smaller deposits. Buying a property is a big financial commitment and there are upfront costs to consider, but over the long-term the financial benefits can be very significant. Getting independent advice and looking for competitive rates either online or through a mortgage advisor is crucial to get the best mortgage to meet potential homeowners individual needs.”

The research found the average price across the country to be £212,610. This means that a buyer with a 21 per cent deposit – the average deposit size for a UK first-time buyer6 – would require £44,648 in order to get on to the property ladder.

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