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Renting now cheaper than owning a first home in nearly all UK regions finds Halifax research

by | Mar 27, 2024

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The monthly cost to first-time buyers of owning a home is now £1,231, -£27 lower than renting an equivalent property. 

This is the smallest gap between home ownership and renting recorded since 2019, according to the latest Halifax Owning vs Renting Review.

The analysis, based on the housing costs associated with a mortgage on a three-bed home compared to the average monthly rent of the same property type, found that monthly rental costs in 2023 grew by 24% to £1,258, while home-owning costs grew by 27% to £1,231.

 
 

There are many advantages to owning a home – as well as the annual savings of £319, compared to renting, it can offer long-term financial stability and remains an aspiration for many people. 

Table 1: UK average monthly home-owning costs and rent payments

YearAverage monthly home-owning cost *Average monthly rent paymentMonthly savings for owners %Monthly savings for owners £ Annual difference between home-owning and renting £ 
2013£578£69216%£113£1,361
2014£605£72016%£116£1,388
2015£612£74418%£132£1,581
2016£629£75917%£131£1,570
2017£627£75417%£128£1,533
2018£669£75912%£90£1,082
2019£719£7474%£28£330
2020£742£82110%£80£956
2021£763£87413%£111£1,338
2022£973£1,0134%£40£476
2023£1,231£1,2582%£27£319

Sources: Halifax, Birmingham Midshires and ONS. *Mortgage prices based on Halifax 12mth rolling data calculated to December 2023, December 2022 etc. Annual figures are subject to slight differences due to rounding. 

 

Regional and national difference 

However, the monthly cost of owning a first home compared to the equivalent rental cost, was higher in nine out 12 UK regions or nations last year. 

Renters are making the biggest savings compared to first-time buyers in the East of England, where they are an average £2,325 better off each year.

Renting in the South East (£1,859), East Midlands (£1,741) and Yorkshire & the Humber (£1,731) also saw significant yearly savings when compared to owning a first home. 

The South West, London and Scotland are the only regions or nations where owning a first home is cheaper than renting. The largest annual savings are in the South West (owners £1,663 better off­). 

Kim Kinnaird, Mortgages Director, Halifax said:

Our latest analysis shows that, in nearly all regions across the UK, first-time buyers are better off renting than owning a similar home. In fact, the only regions where it’s cheaper to own rather than rent, are the South West, London and Scotland. 

“We know home ownership can offer long term financial and living stability and that’s why we believe it’s an important step to take. Our customers want to create a secure future, so it’s a big priority for us to help people get there. However, elevated borrowing costs, alongside a lack of available homes to buy, is pushing ownership further out of reach for would-be first-time buyers in many parts of the country. This is why we’re major participants and big supporters of the Government’s affordable home ownership schemes, such as shared ownership and the mortgage guarantee scheme and we’re committed to helping first-time buyers fulfil their dreams of having a place to call their own.”

Table 2: UK average monthly home-owning and rent costs by region 

RegionAverage monthly home-owning cost*Average monthly rent paymentMonthly difference between home-owning and renting %Monthly difference between home-owning and renting £Annual difference between home-owning and renting £
North East£827£801-3%-£26-£312
Yorkshire & the Humber£954£809-18%-£144-£1,731
North West£1,030£907-14%-£123-£1,475
East Midlands£1,081£936-15%-£145-£1,741
West Midlands£1,118£1,056-6%-£62-£744
East of England£1,546£1,353-14%-£194-£2,325
Wales£953£864-10%-£89-£1,069
South West£1,298£1,43710%£139£1,663
South East£1,705£1,551-10%-£155-£1,859
Greater London£2,241£2,2531%£12£148
Northern Ireland£779£692-13%-£88-£1,051
Scotland£953£9884%£35£424
UK£1,231£1,2582%£27£319

Sources: Halifax, Birmingham Midshires and ONS.  *Mortgage prices based on Halifax 12mth rolling data calculated to December 2023

Annual figures are subject to slight differences due to rounding. 

Table 3: First-time buyer average house price, mortgage advance and deposit, 2022, 2023

 20222023
RegionAverage house priceAverage mortgageAverage depositAverage deposit(% of house price)Average house priceAverage mortgageAverage depositAverage deposit(% of house price)
North East£174,862£141,275£33,58719%£173,824£138,959£34,86520%
Yorkshire & Humberside£201,249£159,826£41,42321%£202,820£158,999£43,82122%
North West£217,938£173,585£44,35320%£217,831£170,610£47,22222%
East Midlands£237,980£186,098£51,88222%£233,890£180,433£53,45723%
West Midlands£237,386£185,081£52,30522%£241,109£186,435£54,67423%
East of England£355,549£268,840£86,70924%£346,484£256,745£89,73926%
Wales£199,823£164,090£35,73318%£196,995£158,973£38,02119%
South West£300,571£225,267£75,30425%£288,935£214,027£74,90826%
South East£393,735£296,394£97,34125%£381,466£283,485£97,98126%
Greater London£586,756£397,563£189,19332%£559,263£368,433£190,83034%
Northern Ireland£163,955£130,650£33,30420%£166,394£128,468£37,92623%
Scotland£197,986£163,863£34,12217%£196,998£158,599£38,39919%
UK£279,260£214,405£64,85523%£270,602£204,573£66,02924%
Sources: Halifax, 12 month rolling to December 2022, 2023, UK Finance

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