Escape the rent trap

Buying your own home rather than renting can save you more than £100 a month, reveals a new report

Each year, Halifax releases its Buying vs Renting Review, which aims to discover which is the most cost-effective option

– renting a home or paying a mortgage and all the associated costs of owning a home. This year’s report shows that those who choose to buy will be better off by the largest amount since 2017, saving £114 a month on average.

The report found that across the UK as a whole, annual homeownership costs were £1,378 cheaper than renting in 2021, although this varied depending on area. The smallest difference was found in Northern Ireland, where buyers were just £205 better off at the end of the year than renters, while Londoners were a massive £4,181 (20%) better off buying than renting. In the South East, the saving was £3,146 (20%), followed by £2,081 in the North West (22%) and £2,034 (17%) in the South West. For buyers in Scotland, the saving was also a massive 22%, although in monetary terms it was slightly lower at £1,817 thanks to lower house prices.

The figures are based on the housing costs associated with buying a three bedroom home, compared to the average monthly rent for the same property. For buyers, it takes into account mortgage payments, household maintenance, repairs and insurance costs, as well as the income lost by putting your savings down as a deposit (although it doesn’t factor in any capital gains in the value of the home). The resulting difference can vary widely from year to year, depending on how these costs, and average rents, change. Having narrowed in each of the past three years, the gap is now at its widest since 2017, and is over £1,200 greater than its historical low in 2019 (when buying meant a tiny £116 annual saving). However, the current difference (£1,378) is not as great as in 2015, when annual ownership costs were £1,476 less than those for renting.

The study also looked at deposit costs, and found that, as a proportion of house price, deposits rose only marginally from 24% in 2020 to 25% in 2021. In cash terms, however, thanks to rising house prices, that meant buyers finding £5,334 extra, with the average deposit reaching £62,415. This too varies vastly by region – Londoners put down an average 33% deposit of £173,021, while in the North, the average is a 21% deposit of £31,995.

Esther Djikstra, Mortgages Director at Halifax, said, “Over the past year, we have seen record numbers of buyers entering the market, moving to bigger properties and taking advantage of the Stamp Duty holiday. However, historic lows for interest rates have kept mortgage costs down, compared to rents. For the second year running, buyers in Scotland see the greatest proportional difference in costs compared to renters and are joined this year by those in the North West of England, where rents are over a fifth more than buying costs.

“Still, before homebuyers can benefit from lower monthly costs, a deposit needs to be put together, still the greatest challenge for many first time buyers. The £62,000 average deposit we see in our data may be an unimaginable sum to potential first time buyers, but it’s much higher than many need to get a foot on the housing ladder. Deposits from 5% are available and, based on the average house price, mean putting down a £12,500 deposit – significantly less than the average.”

Take a look at the following properties we have selected, where you can get on to the housing ladder with a lower-thanaverage deposit, and save money every month over renting.

Table 1: UK average monthly buying costs and rental payments (Source: Halifax, Birmingham Midshires and ONS)

Average monthly buying costs Average monthly rental payment % Difference

Dec-09 £578 £561 3% Dec-10 £576 £605 -5% £ Difference monthly

£17 -£29

£ Annual savings

£206 -£354

Dec-11 £573 £653 -12% -£80

-£960 Dec-12 £588 £661 -11% -£73 -£877 Dec-13 £582 £692 -16% -£110 -£1,321 Dec-14 £614 £720 -15% -£106 -£1,278 Dec-15 £621 £744 -17% -£123 -£1,476 Dec-16 £646 £759 -15% -£113 -£1,358 Dec-17 £640 £754 -15% -£114 -£1,369 Dec-18 £679 £759 -11% -£80 -£959 Dec-19 £737 £747 -1% -£10 -£116 Dec-20 £745 £821 -9% -£77 -£922 Dec-21 £759 £874 -13% -£115 -£1,378

Table 2: Average monthly buying and rental costs by region, December 2021

North Yorkshire & the Humber

Average monthly buying costs Average monthly rental costs

% Difference

£ Monthly difference

£ Annual savings £494 £576 -14% -£83 -£993

£561 £617 -9% -£56 -£675 North West £617 £791 -22% -£173 -£2,081 East Midlands £660 £731 -10% -£71 -£850 West Midlands £654 £778 -16% -£124 -£1,490

East Anglia Wales £758 £858 -12% -£100 -£1,198 £596 £703 -15% -£108 -£1,292

South West

£804 £973 -17% -£169 -£2,034 South East £1,025 £1,287 -20% -£262 -£3,146 Greater London £1,355 £1,703 -20% -£348 -£4,181 Northern Ireland £476 £493 -3% -£17 -£205 Scotland £548 £699 -22% -£151 -£1,817 UK £759 £874 -13% -£115 -£1,378

HARLINGTON, BEDS

Station Road

FROM £89,000*

Station Road is a new development by settle of one and two bedroom apartments moments from Harlington station in Central Bedfordshire. Most apartments come with a balcony or terrace, and all have allocated parking – one space for the smaller apartments and two spaces for the larger ones.

Traditionally built and nished with care, the apartments are available through shared ownership and feature light, spacious open-plan interiors. The kitchens come with appliances including a fridge-freezer and washer-dryer, and the bathrooms are contemporary and elegant, with white sanitaryware.

Harlington has everything you’ll need day to day, including a general store with post of ce, a hairdressing salon, medical centre and two traditional pubs serving home-cooked food.

settlesales.co.uk/stationroad

CASE STUDY

The source of most sibling arguments is that one keeps copying the other – but it all ended happily ever after for two sisters from Tamworth. When Beth Taylor visited her sister Shannon’s new home at Redrow Midland’s King’s Park in Worcester, she was immediately lled with new-home envy. Being a low-maintenance new build, yet full of characterful charm, high ceilings and wider doorways, it seemed like the perfect property – and in true sibling style, Beth wanted the same.

Beth said, “When I rst went to visit Shannon’s home, The Kenilworth, I could see why she’d fallen in love. I couldn’t believe the quality of the home – I had huge sibling jealously!” Beth began saving for a deposit and in 2017, she’d brought her rst Redrow home, an apartment, at Pennine Grange in Tamworth. “I was so happy when I moved into my apartment, it was perfect for my rst home,” she said.

In true sibling fashion, not long after Beth moved in, competition set in. With a growing family, Shannon was keen to upgrade to a larger property, and purchased her second Redrow home, the four bedroom Marlow, at Amington Garden Village on Mercian Way. Shannon said, “Of course – I had to one-up Beth! We loved living at Kings Park but needed a larger home.” In February 2020, Beth moved on to the very same development, a few minutes’ walk away from her sister.

A few years later, Beth met her partner Sam, from Long Eaton, and they started to think about moving in together. Living 30 minutes apart, they were keen to meet in the middle and nd a home near to their families. Beth said, “I knew my dream home was a Ludlow, and so I started looking at the Redrow developments in the East Midlands. Foxbridge Manor, in Castle Donington, felt like home the second we arrived, and the location was perfect.

“Although we don’t live just down the road from each other anymore, Shannon and I still see each other all the time. She’s even thinking about moving here and purchasing her third Redrow property – that would be six Redrow’s between us!”

Amington Fairway, Amington Green and now Eagle Gate at Amington offer a choice of two, three, four and ve bedroom properties in Amington Garden Village.

redrow.co.uk

CASE STUDY

A Gloucestershire couple have taken their rst steps on to the property ladder at a development in Twigworth, called Twigworth Green, with the help of Bromford’s shared ownership scheme, enabling them to secure a better future for their daughter.

After previously renting in Cirencester and Gloucester, Ryan Featherstone, 34, and his ancé Fern Goddard, 36, made the move to their rst home to provide their two-year-old daughter, Darcie, with a safe and secure future, after she was diagnosed with a life-limiting condition.

Ryan, who works at City Plumbing, said, “Darcie was born with HLHS, which is a heart defect meaning only one side of her heart grew in the womb. Buying our rst home is all about her, and securing a future for her. We quickly came to the decision we wanted a new build property, as this enabled us to get on the property ladder via shared ownership.” Ryan added: “We plan to continue to save and buy more shares as and when we can, to ultimately own the property fully in the future.

“I would de nitely recommend shared ownership to anyone in similar circumstances as ourselves. Coming home to our own property and seeing what we have accomplished to get to this point is such a great feeling. We love the area and the fact we can come home and relax, knowing a future is secured for us.”

The quiet village of Twigworth proved to be a perfect location for Ryan and Fern, as Darcie’s nursery and a handful of primary schools are nearby, plus it has easy access to Gloucester, Tewkesbury and the motorway. The young family purchased a semi-detached, three bedroom Bromford home off-plan. Ryan said, “Darcie now has her own space as she grows up, and the downstairs bathroom is a real bonus with potty training. The enclosed garden gives us security when she is playing outside too, so the whole house and layout really suits our needs. I work from home so the ability to have an of ce has been more than ideal. The lounge is our favourite room, as it already has a cosy, warm feeling.”

Fern, who works at Tesco, added, “After reading a story on Facebook about the area and prospects at Twigworth Green, we were hooked and knew this would be the right place for us. The development is still in its early stages, but there is already a residents’ Facebook group that brings us all together! The purchase has been smooth, seamless and a good experience from start to nish and we would de nitely recommend Bromford to friends and family.”

bromford.co.uk/sharedownership

EAST LONDON

Beam Park

FROM £62,500*

Beam Park is a purpose-built, modern community being shaped near the banks of the Thames, where Rainham and Dagenham meet, offering eco-friendly one, two and three bedroom homes through shared ownership.

Designed to meet the GLA’s London Sustainable Design & Construction policy and achieve a 35% reduction in CO2 emissions, L&Q’s homes help residents to lower their eco-footprints and reduce their energy bills. The properties are tted with a highly ef cient water system that prevents water loss, while greater levels of insulation are achieved through double glazing and doors that meet high insulation standards.

All apartment blocks are tted with solar PV panels, and brown roofs will be positioned across the development, creating an environment for local ecology to thrive. Beam Park also has 17 acres of open space.

lqhomes.com/beampark

*Based on a 25% share of the full market value of £250,000

BECKENHAM, BROMLEY

The Gables

FROM £475,000

Over the past 12 months, prices in the London Borough of Bromley have risen by 10.9%, the highest increase of any London borough. With this in mind, Shanly Homes is delighted to announce the launch of The Gables, in Beckenham.

Set along a leafy avenue, The Gables is a collection of 24 one and two bedroom apartments with exterior designs that re ect the large Victorian townhouses nearby, and contemporary open-plan interior layouts. Modern kitchens come complete with stone worktops and a range of appliances including an integrated microwave and fridge-freezer, while main bedrooms have tted wardrobes.

Three railway stations and a tram stop are all within a 12-minute walk. Also nearby are the 93 hectares of picturesque parkland at Beckenham Place Park and the amenities of Beckenham high street, including an Odeon Cinema and a range of restaurants.

shanlyhomes.com

EALING

Ealing Bond

FROM £113,750*

Ealing Bond by Octavia is a collection of contemporary one, two and three bedroom apartments in leafy West Ealing, each bene ting from a spacious open-plan living area, modern fully tted kitchen and quality internal speci cations. Most have a private balcony. Externally, podium gardens create an oasis of relaxation in the capital.

The apartments are within a short walking distance of West Ealing station, and the area has underground, Crossrail and National Rail connections that put the whole of the capital within easy reach. Once the Elizabeth Line is completed, Bond Street will be just a 13-minute tube journey away. This shared ownership development is only available to applicants who live or work in the borough of Ealing.

sharetobuy.com/properties/165486

HARROW

The Elms

FROM £86,875*

The Elms is a development of one and two bedroom shared ownership apartments by Octavia located on Elmgrove Road. The apartments have well-proportioned living areas and contemporary kitchens with integrated appliances, including a dishwasher. The modern and stylish bathrooms have a mirrored wall cabinet for handy storage and the main bedroom comes with a tted wardrobe. All homes have private outdoor space in the form of a balcony or terrace.

Conveniently located just a short walk from the shopping centres, cafes and restaurants of Harrow on the Hill, the development is also within walking distance of both Harrow-on-the-Hill and Harrow & Wealdstone stations, offering quick connections into London Euston, Baker Street or Marylebone stations.

Priority will be given to applicants who live or work in the London Borough of Harrow.

sharetobuy.com/properties/156106

*Based on a 25% share of the full market value of £347,500

WARWICK

Beauchamp Park

FROM £127,500*

L&Q has launched a range of new shared ownership homes in the heart of the idyllic Warwickshire countryside at Beauchamp Park, a major new residential neighbourhood at Gallows Hill in Warwick. Set across a 20.9-hectare site, Beauchamp Park will deliver 450 homes, new public open space, footpaths, cycleways and children’s play areas.

Apartments, terraced and semi-detached houses are available in a variety of layouts, with a high-quality speci cation and a choice of three colour palettes.

Beauchamp Park features views over Warwick Castle from Gallows Hill and there’s a wide selection of parks and open spaces nearby, while Warwick station is less than a mile away with services to Birmingham Moor Street in 30 minutes and London Marylebone in 90 minutes. Birmingham airport is a half-hour drive.

lqhomes.com/beauchamppark

*Based on a 35% share of the full market value of £365,000

THAMESMEAD, SE2

Southmere

FROM £305,000*

Peabody is offering a collection of spacious one, two and three bedroom apartments at its agship site at Southmere in Thamesmead, south London, overlooking the iconic Southmere Lake. Part of the rst major phase in Peabody’s ambitious regeneration scheme, delivering over 500 new homes, the properties in Thamesmead will bene t from access to a new public square, a civic building including library, a tness studio and cafe, with more commercial buildings and community spaces to follow.

The nearby station, Abbey Wood, is served by Southeastern and Thameslink, but when Crossrail arrives, the commute into London will be even quicker, with Canary Wharf just 11 minutes away. The collection, which launched in February, includes market sale homes (with all those under £600,000 available using London Help to Buy), as well as shared ownership.

peabodysales.co.uk/developments/southmere

SLOUGH

Aspire

FROM £300,000

Those looking for a high-speci cation, energy-ef cient home with exceptional growth potential will nd they don’t need to compromise at Aspire, Click Living’s new development of one, two and three bedroom apartments in Slough, Berkshire. According to SevenCapital, property prices in Slough are expected to rise by 19% by 2025, while current prices there are around 61% per cent lower on average.

Every apartment has private outdoor space with a terrace, balcony or garden, and a spectacular roof terrace provides panoramic views of Windsor Castle. Every apartment has an air source heat pump and is EPC A/B. It’s a nine-minute walk to Slough station, from where trains take 14 minutes to London Paddington, while Heathrow is 13 minutes by car. Slough is bene ting from a £3.5bn town centre investment, including a stadium and ice arena, and Crossrail is set to arrive this year.

clickaspire.co.uk

BURNHAM, BUCKS

Burnham Court

FROM £277,500

Burnham Court, by Chancery Homes, comprises 58 new contemporary homes in one of Buckinghamshire’s best-connected villages. Situated in the village of Burnham, Burnham Court is already 75% sold, with the last few one and two bedroom apartments still available to purchase through the Help to Buy scheme.

The apartments, with open-plan living spaces, high-quality nishes and off-street parking, are a short walk from the village high street and Burnham station, which runs a 36-minute service into London Paddington. National Nature Reserve Burnham Beeches, an area of outstanding beauty, is easily accessed by foot.

chanceryhomes.co.uk