Owning a home now cheaper than renting in UK

If you rent your property then
you will be £1,400 worse off than someone who owns their home, according to a
new study.

Falling house prices, cheaper
mortgages and increases in rents now mean that it is significantly cheaper to
own than to rent your home.  Keep
reading to learn more.

Falls in mortgage rates and rise in demand for rental property have
increased gap

The research from Halifax found
that it is now almost £1,400 per year more expensive to rent a house than it is
to buy.  Mortgage rates dropped
from an average of 5.75 per cent in 2008 to 3.63 per cent in 2011, while house
prices have fallen by 11 per cent over the same period.  These factors have reduced the costs of
home ownership.

The Daily Mail reports that ‘recent mortgage deals mean you can
typically pay £600 a month for a three-bedroom house – £116 cheaper than the
average rent of £716.’

The gap between the cost of
renting and buying increased significantly in 2011 and is expected to rise
further in 2012 as people continue to struggle to get onto the housing
ladder.  There has also been a
strong demand for rented property which has pushed up the cost for tenants.

Martin Ellis, housing economist
for Halifax, believes that affordability for buyers has increased more than
that for renters.  He said: “The
affordability gains for buyers relative to renters in the last three years have
been significant.  The average
mortgage payment has fallen dramatically over recent years as a result of
falling house prices and mortgage rates.

“At the same time, rents have
risen due to strong demand for rented accommodation.”

The Mail reports that ‘Wales is the only area of the UK where it is
cheaper to remain a tenant, with owning a home costing £5 a month more than
renting.’