The gap between buying and renting narrows

The cost of buying a home for first-time buyers is £670 a year lower than renting, according to new research by Halifax.

The average monthly costs associated with buying a three-bedroom house in the UK for a first-time buyer was £666 in June 2015, 8% (£56) lower than the typical monthly rent paid on the same property type (£722 a month).

This is in contrast to June 2009, during the financial crisis, when the average cost of buying was 16% (or £1,154 per year) more than the average rent paid.
Even though the average price paid by first-time buyers for a three-bedroom house is 25% higher than six years ago, the monthly costs of owning has come down as the average mortgage rate has fallen to 2.91% from 4.92%. Average rents have grown by 23% in the same period.

In the past year, with the price of a typical first-time buyer home rising by 8%, the difference between the cost of owning versus the cost of renting has narrowed from £85 in 2014 to £56 in 2015 – a fall of 34%. This is partly as a result of average monthly mortgage costs rising by £40 while average monthly rents have only increased by £8.
First-time buyers in London will have, in cash terms, experienced the largest benefit from buying rather than renting a home in the last year. The average monthly cost of £1,338 for those who have bought in London in 2015 compares to an average monthly rental price of £1,419; a saving of £81 a month (£973 over the year) or 6%.

The second largest difference is found in the South West where first-time buyers were paying 9% less a month (£67 a month or £808 annually) than the typical private tenant in the region.

Craig McKinlay, mortgage director, Halifax said: "Looking at monthly costs, the combination of lower mortgage rates and declining rental value over the past six years has made it cheaper to buy than to rent. While numbers of first-time buyers getting on to the housing ladder in the first six months of both 2014 and 2015 has been over 135,000 – almost double the lows seen in 2009 – the issue of building more new homes in the right places needs to be addressed if we are to see sustainable growth.”
https://www.landlordtoday.co.uk/breaking-news/2015/8/the-gap-between-buying-and-renting-narrows