The cost of a first-time buyer owning a home in the UK is now on average £110 per month lower than renting, or £1,316 per year (14%), according to research by Halifax.

The average monthly mortgage costs associated with owning a three bedroom house for a typical first-time buyer in the UK stood at £677 in June 2014; £110 lower than the average monthly rent paid on the same property type at £787. Five years ago, the average cost of buying was £37 a month more (£734 v. £697) than the typical rent paid.

The significant fall in the monthly cost associated with buying compared to renting has been driven by the decline in the average mortgage rate since 2009. The mortgage rate for a first-time buyer has fallen to an average of 3.09% from 4.92% in June 2009, helping to reduce the average monthly mortgage payment by £57 (8%).

The lower costs of owning compared with renting, together with lower mortgage rates and an improving economy may have contributed to a 29% increase in the number of buyers getting on the housing ladder for the first time. In 12 months to June 2014 there were 301,300 house purchases made by first-time buyers, compared to 233,400 a year ago; and almost double compared to five years earlier (155,700). First-time buyers now account for 45% of all house purchases, compared to 38% in 2009.

“Buying costs have been remarkably stable for much of the past five years making home ownership a more attractive option,” commented Craig McKinlay, Mortgage Director, Halifax.

“With greater availability of mortgages that require smaller deposits, the property ladder has also become even more accessible for those who can afford the monthly costs of owning but had previously not been able to save the necessary deposit,” he added.

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