Buying a Home in the UK Reportedly Cheaper than Renting

on Sep 18, 2012
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Although there is a growing demand for rental properties in the United Kingdom, recent data show that owning a home might turn out to be in fact cheaper. On 18 September 2012, The Independent reported that according to research by Halifax, the cost of buying a home was almost a fifth lower than the costs associated with renting.

As noted in The Independent’s article, the monthly cost related to home buying was £78 lower than renting, with buying costs dropping by three percent over the past year and renting costs rising by five percent. The Independent quotes Martin Ellis, housing economist at Halifax, who noted that the observed improvement in terms of buying costs was due to a combination of lower mortgage rates on the one hand and declining house prices on the other. Market conditions for renters on the other hand have deteriorated as rents have risen in the past two years.

The Independent reports that as compared to renting, buying is most affordable in London, where the average homebuyer pays 14 percent a month less than the typical renter, or a £177 difference. The difference between buying and renting is reported to be the smallest in the East Midlands.
Recently, Bloomberg also reported that the average cost for renting a home in the UK surpassed £800 a month for the first time in August, with the average rental amount increasing by 2.1 percent from a month earlier. The Independent quotes a recent Rightmove (LON:RMV ) survey which showed that 56 percent of renters considered themselves “trapped” in the rent cycle and were unable to buy a home with the most common reason being the raising of a sufficient deposit.

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