Home owners £1200 better off a year than those who rent

The mortgage rate for new borrowers has fallen from 5.75% on average in 2008
to 3.63% last year.

Lenders have been offering some of their cheapest ever deals due to the Bank
of Englands historic low 0.5% base rate, while average house prices have
dropped by 11% over the same period.

As well as calculating the mortgage payments of the average new borrower,
researchers also included household maintenance, repairs and insurance in
home buying costs.

However, would-be buyers still face the hurdle of raising a deposit and are
also likely to face a tougher time raising a mortgage this year, with
lenders expected to tighten their borrowing criteria amid the weak economic
backdrop.

Typical rents have been pushed up as those who would like to buy have been
left trapped in the rental system and concerns have been raised that
transactions could hit a record low this year.

Martin Ellis, housing economist at Halifax, said: The affordability gains
for buyers relative to renters in the last three years have been
significant.

The average mortgage payment has fallen dramatically over recent years as a
result of falling house prices and mortgage rates.

At the same time, rents have risen due to strong demand for rented
accommodation.

Nonetheless, despite the improvement in the relative affordability of buying
a home, the number of purchasers has continued to fall due to the ongoing
challenges in raising a deposit and the considerable uncertainty over the
prospects for the UK economy, which have severely constrained housing
demand.

Over the past year, buying costs have fallen by 5% whereas rental costs have
risen by 5% over the same period.

In December 2010, buying a home was just under pound;50 a month cheaper than
renting, and the year before that it was just under pound;20 cheaper, showing the
gap has widened.

The average monthly buying and rental costs by region

North Buying: pound;449, Renting: pound;488, Difference: -8.0%.

Yorkshire and Humberside Buying: pound;462, Renting: pound;488, Difference: -5.3%.

North West Buying: pound;483, Renting: pound;525, Difference -8.0%.

East Midlands Buying: pound;482, Renting: pound;506, Difference: -4.7%.

West Midlands Buying: pound;529, Renting: pound;539, Difference: -1.9%.

East Anglia Buying: pound;579, Renting: pound;612, Difference: -5.4%.

Wales Buying: pound;479, Renting: pound;474, Difference 1.1%.

South West Buying: pound;685, Renting: pound;710, Difference -3.5%.

South East Buying: pound;811, Renting: pound;858, Difference -5.4%.

Greater London Buying: pound;1,089, Renting: pound;1,212, Difference: -10.2%.

Northern Ireland Buying: pound;396, Renting: pound;413, Difference: -3.9%.

Scotland Buying: pound;510, Renting: pound;540, Difference: -5.5%.

The average monthly buying and rental costs since 2008

December 2008 Buying: pound;928, Renting: pound;721, Difference: 29%.

December 2009 Buying: pound;638, Renting: pound;654, Difference: -2%.

December 2010 Buying: pound;634, Renting: pound;682, Difference: -7%.

December 2011 Buying: pound;600, Renting: pound;716, Difference: -16%.