Despite rising mortgage rates, the average homeowner still saves £498 a year compared to if they were renting a similar property.

This could come as a surprise if you’ve had your eye on mortgage rates recently, as they’ve risen substantially over the past year. However, rent has long been on the increase as well, rising by 4.4% in the year to January 2023, according to data from the Office for National Statistics (ONS), with many landlords passing on steeper mortgage costs to their tenants.

According to Halifax, the average cost of owning a three-bed home in the UK is now £971 per month for a first time buyer, whereas rent for an equivalent property is 4% higher at £1,013.

According to the data, provided by Halifax, the biggest difference between renting and buying is in London, where renters pay nearly £3,000 more each year than those who own their homes. In percentage terms, the greatest gap between owners and renters can be found in Scotland, where the former typically pays £727 a month compared to the latter’s £918 – a 21% difference.

Meanwhile, the East of England was the only part of the UK where it worked out cheaper to rent overall, by a difference of £90 a month, or £1,078 a year.

While considerable, £500 is far from the highest the gap has ever been, and is actually one of the lowest differences between renting and owning in any year over the past decade. For example, for the six years from 2013, the gap exceeded £1,000, peaking at £1,567 in 2016. However, it then shot down to £238 in 2019, the smallest gap in a decade.

The gap has been fairly volatile since then, rising to £923 in 2020, £1,300 in 2021, and now back down to £498.

A full breakdown is provided in the table below:

 Year Homeowner’s avg. monthly cost* Renter’s avg. monthly cost Monthly saving for homeowners Annual saving for homeowners
 2012 £614 £661 £48 £572
 2013 £581 £692 £111 £1,327
 2014 £607 £720 £113 £1,361
 2015 £616 £744 £128 £1,539
 2016 £629 £759 £131 £1,567
 2017 £629 £754 £125 £1,501
 2018 £669 £759 £90 £1,084
 2019 £727 £747 £20 £238
 2020 £744 £821 £77 £923
 2021 £766 £874 £108 £1,300
 2022 £971 £1,013 £42 £498


Source: Halifax, Birmingham Midshires and ONS *Mortgage prices based on Halifax 12mth rolling data calculated to January 2023

Kim Kinnaird, Mortgages Director at Halifax said: “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.”

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Should I buy a property if I’m currently renting?

That’s a decision only you can make. While the numbers on paper are advantageous for homeowners, and there are certainly benefits that come with ownership, you don’t necessarily need to push yourself to buy a home if you’re comfortable renting.

For example, the benefits of renting include having greater flexibility over where you live, and the freedom to move around without having to sell up (you will need to give your landlord notice, however). You are also usually not responsible for the costs of repairs and maintenance in your property when renting. You can read more about the pros and cons of renting versus buying in our article Renting or buying – which is right for you? and about whether now is a good time to buy in our guide Should I buy a property now or wait?

Some people only rent because they cannot save up enough to put down a deposit on a home – a frustrating situation to be in when Halifax’s data shows that the average renter can make the same repayments as the average homeowner. If you are in this position, you could consider seeking mortgage advice to see what options are available to you.

Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage. If you’re looking for somewhere to start, you can speak to a Rest Less Mortgages advisor and get high quality advice on residential, retirement interest-only, equity release and buy-to-let mortgages.

Can I remortgage to save money?

If you’re a homeowner and coming to the end of a fixed rate or other mortgage deal, or you’re already on a standard variable rate, then now could be a good time to think about remortgaging if you want to keep your outgoings down.

Mortgage rates have risen substantially over the past year, following a series of increases in the Bank of England base rate. So, if you spot an attractive mortgage deal, now could be a good time to grab it. Read more in our article Five good reasons to remortgage right now.

If you’re looking for mortgage advice, you can speak to a Rest Less Mortgages advisor and get high quality advice on residential, retirement interest-only, equity release and buy-to-let mortgages.

The remortgage process typically takes around six to eight weeks, but can take longer for non-standard cases, so it’s well worth getting started sooner rather than later if your mortgage deal is due to finish soon. Alternatively, if you know when your current deal finishes, set up a free reminder and we’ll let you know when it’s time to search for a better deal.

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