The average monthly rent in the UK is £912 per household, compared to monthly repayments of £723 for the average first-time buyer. This means that homeowners could save an average of £189 a month or £2,268 a year compared to renters.
Londoners could make the biggest saving, as the average monthly rent is £289 higher than monthly mortgage payments, or £3,468 a year. The smallest differential between rent and mortgage payments is in the East of England at just £43 per month
The research found that in order to get on the property ladder, 38% would consider moving back in with their parents while saving for a deposit and 21% would give up alcohol to raise the funds.
Although selling shares in a property is theoretical, 22% said they would consider doing this, with the buyer/s of the shares gaining a potential capital return when the property is sold.
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.”
Historically, renting has appeared cheaper, especially in areas like London and the South East, where property prices have consistently been high. But since 2010, where the economy saw a re-set, the UK has seen inflation fall and with it mortgage rates have come down significantly, meanwhile rents have steadily crept up.
Source: Mortgage Finance Gazette