Potential first time buyers outside of London would be better off buying a property than continuing to rent according to new research from Abbey Mortgages.
Abbey says that 1.61 million Britons said that they were looking to buy in areas of the country other than London and based on today’s prices these people would save £624 each or a collective £1 billion over the next 12 months by doing so.
For this group, the average monthly rent comes to £434, while those buying a property with a 25% deposit would currently see a monthly mortgage bill of £382 – an average saving of £52 per month.
Meanwhile, for the 187,000 people looking to get on the property ladder in London, continued high prices in the capital mean that these people will £466.19 worse off each month if they choose to buy as opposed to renting.
Across the country, the research into typical first time buyer flats and terraced properties found that in the last 12 months, average prices have decreased by 9% in the to £92,861. This means a first time buyer will need an average deposit of £23,215 if they want to buy a property with a 25% deposit.
Prospective buyers in Wales are set to make the biggest monthly saving at £90.91, followed by those in the North West £87.43 and Yorkshire £77.06. Buyers in East Anglia will see only a marginal saving of £2.59 each month. The latest research echoes the findings last time the Rent vs. Buy research was undertaken. In December 2008, Abbey Mortgages found buying to be an average of £51 cheaper than renting each month, indicating that falling house prices and low mortgage rates have continued to make housing far more affordable than previously and buying much more attractive.
Nici Audhlam-Gardiner, director of Abbey Mortgages, said: “Our latest research shows there is hope for first time buyers trying to buy their first home. It’s now cheaper in all bar one of the regions to buy rather than rent and shows that saving for that all important deposit is so worthwhile too.