Average rental prices are now higher than average mortgage repayments in every region of the UK, according to research from Santander Mortgages.
According to Santander the average rent in the UK now stands at £912 per household, compared to monthly mortgage repayments of £723 for the average first-time buyer.
This equates to savings of £189 a month, or £2,268 a year for the typical first-time buyer.
The survey found the biggest savings to be made are in London, where the average rent is now £289 more a month than that average mortgage repayment.
Other regions where there are significant savings to be made include Northern Ireland, where first-time buyers typically see savings of £178 a month; the North West (savings of £152 a month) and Scotland (savings of £134 a month).
The smallest differential is in the East of England, where average rents are just £43 higher per month.
Historically renting has appeared cheaper in London and the South East, where property prices have been consistently high.
But in recent years prices have stalled in these regions, while rents have continued to creep upwards. At the same time mortgage rates have remained at close to historic lows since the financial crash.
Santander’s managing director of mortgages Miguel Sard says: “Many first-time buyers understandably focus on the challenge of saving for a deposit. It is often assumed that when they purchase a property they will be under greater financial pressure, but our research shows the reverse is true.”
Santander points out that the average first-time buyer now needs a deposit of £51,905 though.
More than a third of potential first-time buyers surveyed said they would consider moving back in with their parents to help them save. One in five (22 per cent) said they would consider alternative means of raising finance, such as selling shares in their property.
Mortgage broker Trussle’s chief executive Ishaan Malhi says: “It can be extremely difficult for anyone renting to get on the property ladder, especially in London where the average person spends virtually half of their net earnings on rent.
“This research shows owning a home is cheaper than renting across the UK, which shows how important it is for the government and the industry to do more to help people get on the property ladder as soon as they can.”
