It’s been long-assumed that renting a property in the UK is cheaper than buying one, and while the initial costs may indeed be cheaper, new figures from Santander show that in every area of the United Kingdom, it is now cheaper for potential first-time buyers to buy a property rather than rent, when looking at monthly outgoings.
According to the data from Santander, homeowners across the UK could save around £2,268 a year if they were able to purchase a property rather than rent one. The figures show that currently, the average monthly rent in the UK is around £912 per household, whereas the average monthly mortgage repayment is around £723 for first-time-buyers. This means that first-time buyers could save around £189 a month (£2,268 a year) when compared to renters.
While the monthly outgoings may be cheaper for those buying a property, the biggest problem many first-time buyers have is saving for the cost of a deposit, with the average first-time buyer deposit currently standing at around £52,000.
Miguel Sard, managing director of mortgages at Santander UK said that many first-time buyers are understandably focused on the challenge of saving for a deposit, a goal which many feel is always out of reach. He added that many first-time buyers believe that buying a property often leads to greater financial pressure, when in fact, the new research suggests the opposite is true.
Santander has suggested that many first-time buyers have opted for some alternative methods for saving for a deposit, with some 22% considering selling shares in the property, which offers a potential capital when the property is sold in the future. 38% of first-time buyers would consider moving back in with their parents in order to save the money needed for a deposit, while 21% said that they would give up alcohol in order to save the cash needed.
The report highlighted that it has historically always appeared cheaper to rent property, especially in the South East and London where property prices are astronomically high, but the report says that since 2010, inflation levels in the UK have fallen, and with it so have mortgage payments for many homeowners on the standard rate mortgages. In comparison, rents have risen steadily over this time, especially with the changes to legislation putting more pressure on landlords’ finances.
According to Santander’s data, potential first-time buyers in London are set to make the biggest savings by buying a property rather than renting as the average cost of renting in the UK capital now exceeds mortgage payments by £289 a month, or £3,468 a year. In comparison, first-time buyers in Wales would be around £60 a month better off by buying a property, with average rents in Wales coming in at around £596 a month, and mortgages payments around £535 a month.
If you’re looking to buy a property in Cardiff, get in touch today. As Cardiff’s largest estate agent, we have hundreds of properties available to buy in many beautiful locations. To find out more, call our offices today on 02920 454555, email: email@example.com, or pop into our offices in Roath or Cardiff Bay.