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Why owning a home is still cheaper than renting

Now more than ever, people are considering whether to buy a home or continue renting. However, with housing costs rising, it can be challenging to determine which option is more cost-effective in the long term. To help answer this question, the Halifax Owning vs Renting Review analysed the costs associated with homeownership and renting in the UK. The review concluded that, on average, owning a home is still cheaper than renting.

This blog will look at how the review's findings compare housing costs for first-time buyers and renters and the potential benefits and drawbacks of homeownership.

How the Analysis Compares Housing Costs for First-Time Buyers and Renters

The Halifax Owning vs Renting Review considered the initial costs of purchasing a home and the ongoing costs associated with homeownership. Initial costs include the deposit, stamp duty, and other home-buying fees. Ongoing costs include mortgage payments, property taxes, insurance, and maintenance. The review also looked at homeownership's potential benefits and drawbacks, such as depreciation and maintenance costs.

The review found that, on average, owning a home is still cheaper than renting. This is due to several factors, such as home value depreciation, steady monthly payments for homeowners, and financial savings. In addition, homeowners can save money through tax deductions, equity buildup, and appreciation of their homes over time. These savings add up over time and can make homeownership a more cost-effective option than renting in the long term.

While there are many benefits to homeownership, there are also some drawbacks that should be considered. First, purchasing a home is a significant financial commitment, which can be difficult for first-time buyers to afford. Homeowners are also responsible for any repairs or maintenance to their property, which can be expensive. Finally, homeowners are taking on a financial risk when they purchase a home, as there is no guarantee that their home will appreciate in value over time.

Halifax mortgages director Kim Kinnaird comments: "Our latest analysis shows that becoming a homeowner can bring significant savings for people. Nationally, homeowners are almost £500 better off than renters each year. These benefits are felt most keenly in London, where homeowners are saving nearly £3,000 annually compared to those renting similar properties – a significant figure. In fact, the only region where it is cheaper to rent than own is the East of England, where renters are holding onto £90 each month, compared to owners.

"Of course, 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."


Overall, the Halifax Owning vs Renting Review found that owning a home is still cheaper than renting, with the most significant percentage gap in Scotland, where homeowners pay £727 per month, compared to the rental bill of £918 – a 21% saving for those on the property ladder.

While this has decreased in recent years, primarily due to the mortgage rate increases after the mini-budget, it is still a considerable saving. In general, the benefit of owning your own home outweighs renting.

Buying your first home can be an exciting but daunting experience, so it's essential to make sure you get the best mortgage advice before making any decisions. There are numerous mortgage options, so it's vital to understand the difference between fixed and variable rates and get independent advice on the best deal for your needs. Additionally, help schemes are available for first-time buyers, which can make purchasing a property more accessible. With the proper guidance, finding the best mortgage advice can be manageable - so feel free to speak to one of our friendly and experienced Greenshoots Financial team.

How do I find out more?

Contact our friendly brokers, who will discuss your situation and discuss the right options for you.

Call: 01506 537111


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