Rents now higher than mortgage payments across the UK
Posted 23 December 2015 by
Keith OsborneIf you're renting a property in the UK, there is a strong chance your monthly expenditure would be lower if you were able to buy a home. That's the conclusion of new research from a leading bank which has revealed that average monthly rents are now more than the average monthly mortgage repayment in every region of the UK.
According to the research by Santander Mortgages, would-be buyers could save over £2,000 a year if they were able to buy their own home.
The research from Santander has revealed that 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. This means that homeowners could save an average of £190 a month by buying rather than renting, equivalent to £2,300 a year.
Prospective first-time buyers in the South West would make the biggest monthly savings by making the switch from renting to property ownership as the average monthly rents in the region exceed mortgage payments by over £192.
First-time buyers in London, where rental prices are 56% higher than the UK average, would be an average of £179 better off per month with a mortgage rather than paying rent. 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.
The research found the average house price across the UK is now £212,610. This means that a buyer with a 21% deposit – the average deposit size for a UK first-time buyer – would require £44,648 in order to get on to the property ladder.
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.”