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24.06.2024

Renting now cheaper than owning amid high UK mortgage cost

Nadia Khan DipPFS Cert CII (MP)

Nadia Khan DipPFS Cert CII (MP)

Wren Sterling

Financial Adviser, Mortgage Adviser, Will & Estate Planner, Investment & Wealth Manager, Pension Adviser

Renting is proving to be a more cost-effective option for first-time buyers in the UK amidst high mortgage costs. The monthly cost of owning a home has reached £1,231, leading many to consider renting as a more affordable alternative.

In certain regions like the East of England, renters are enjoying annual savings of up to £2,325 compared to first-time buyers. This trend is attributed to higher mortgage rates and limited housing availability, which are pushing up property prices.

Notably, regions such as the South East, East Midlands, and Yorkshire & the Humber are witnessing significant yearly savings for renters, with owning a home costing more in these areas. However, the South West, London, and Scotland remain as the only regions where owning a first home is cheaper than renting, with the South West leading in annual savings of £1,663 for homeowners.

Overall, the monthly cost of owning a home for first-time buyers stands at £1,231, marking a minimal £27 difference compared to renting an equivalent property. This narrow gap between home ownership and renting is the smallest recorded since 2019.

An analysis comparing housing costs associated with mortgages and average monthly rents of three-bed properties revealed a 24% increase in rental costs to £1,258 and a 27% increase in home-owning costs to £1,231 in 2023. Looking back a decade, home-owning costs for first-time buyers have surged by 113%, while rental costs have risen by 82%.

Mortgage Advice
Mortgage
buy or rent
family home

Nadia Khan DipPFS Cert CII (MP)

Nadia Khan DipPFS Cert CII (MP)

Wren Sterling

Financial Adviser, Mortgage Adviser, Will & Estate Planner, Investment & Wealth Manager, Pension Adviser

I am an Independent Financial and Mortgage Adviser and have worked in Financial Services for over 12 years. During my career I gained experience in assisting both individual and corporate clients.…

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