According to Halifax, the average monthly cost for a first-time buyer with a mortgage on a three-bed home was £971. A renter would pay £1,013 per month on the same property.
This would make the homeowner a saving of £500 per year, but in 2016 – when the gap between renting and owning was its peak – the difference would have been £1,567 annually.
Scotland has the most significant gap between owners and renters, with those who pay rent forking out an average of £918 per month, compared to £727 for homeowners. It’s a saving of 21% for those on the property ladder.
Meanwhile, there is one place where being a homeowner with a mortgage is more expensive than paying rent. In the East of England, homeowners now pay £90 more each month, on average, than those renting.
Kim Kinnaird, mortgages director at Halifax said: “Our latest analysis shows that becoming a homeowner can bring significant savings for people.
“Nationally, homeowners are almost £500 better off than renters each year. These benefits are felt most keenly in London, where homeowners are saving nearly £3,000 annually compared to those renting similar properties – a significant figure.
“In fact, the only region where it is cheaper to rent than own is the East of England, where renters are holding onto £90 each month, compared to owners.
“Of course, making the move from renting to home ownership can be difficult for many, as raising a sufficient deposit and then finding the right property can be challenging.
“While a predicted fall in house prices this year will be welcome news for those looking to buy their first home, it doesn’t change the fact that getting on the property ladder remains expensive – a problem that is compounded when rents are high, impacting the ability to save.”
UK average monthly homeowning and rent costs by region (source Halifax)
| Region | Average monthly homeowning cost* | Average monthly rent payment | Monthly savings for owners | Monthly savings for owners | Annual savings for owners |
| Scotland | £727 | £918 | 21% | £191 | £2,295 |
| South West | £1,029 | £1,237 | 17% | £208 | £2,492 |
| North West | £778 | £922 | 16% | £145 | £1,737 |
| Wales | £735 | £872 | 16% | £137 | £1,647 |
| Greater London | £1,828 | £2,074 | 12% | £246 | £2,950 |
| West Midlands | £839 | £951 | 12% | £112 | £1,342 |
| Yorkshire & the Humber | £720 | £802 | 10% | £82 | £980 |
| South East | £1,345 | £1,474 | 9% | £129 | £1,550 |
| East Midlands | £843 | £931 | 9% | £88 | £1,059 |
| North East | £628 | £685 | 8% | £57 | £686 |
| Northern Ireland | £596 | £620 | 4% | £24 | £288 |
| East of England | £1,212 | £1,122 | -8% | -£90 | -£1,078 |
| UK | £971 | £1,013 | 4% | £42 | £498 |
Sources: Halifax, Birmingham Midshires and ONS. *Mortgage prices based on Halifax 12mth rolling data calculated to January 2023
