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First-time Buyer

It’s cheaper to buy a home than rent one across the UK

Paloma Kubiak
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Paloma Kubiak

Average rent is more than the average mortgage repayment in nearly every region, but you still need a deposit to buy.

Average first-time buyers could save over £2,250 a year once on the property ladder compared to renting, according to Santander.

The lender found that aspiring first-time buyers would have lower monthly outgoings if they bought a property rather than rented one. And that holds true for all regions of the UK, where average monthly rental prices are now higher than average mortgage repayments.

Make a saving

The average monthly rent in the UK is currently £912 per household, compared to monthly repayments of £723 for the average first-time buyer household. Homeowners could save an average of £189 a month or £2,268 a year compared to renters.

Miguel Sard, managing director of mortgages at Santander UK, said: “Many first-time buyers understandably focus on the challenge of saving for a deposit and wonder how they will afford a property. However, it is often assumed that when you purchase a property you will be under greater financial pressure and our research shows the reverse is true.

“Of course, buying a property is a major financial investment with upfront costs to consider, but long-term, the financial benefits can be significant. 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.”

Prospective first-time buyers in London are set to make the biggest monthly savings by making the switch from renting to property ownership, as average rents exceed mortgage payments by over £289 a month or £3,468 a year.

First-time buyers in Northern Ireland would see themselves £178 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 £43.