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Hennessy Bowie & Co has been practising in Bishopbriggs for some twenty five years, principally in the areas of domestic conveyancing, commercial conveyancing, commercial leasing, executries and matters relating to care for the elderly,

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Buying cheaper than renting?

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It is sixteen percent more expensive to rent a home in the UK than to buy one, according to new research by the Halifax. The banking group highlights falls in house prices and associated costs, together with a big increase in rents, as being behind the findings.

Average monthly costs

Looking specifically at figures for December 2012, the Halifax reveals that the average monthly cost of buying a three-bedroom property is £621, compared to an average monthly rent of £741 for the same sort of property.  This is a saving of £120 per month.

The gap between the two has apparently grown over the past year. At the end of 2011, the monthly costs associated with home buying were £99 (14%) lower than renting, but over the past year, buying costs have risen by 1%, while the cost of renting has increased by 4%.

Regional differences

It doesn’t matter which part of the UK you live in, says the Halifax, buying a house is cheaper than renting in all regions – although there are some variations.

Buying compares most favourably to renting in London, where it will cost £1,101 per month to buy, compared to £1,294 per month to rent. In Scotland, there is a £34 per month difference between buying (£524) and renting (£558), while in Yorkshire and the Humber there is only a £1 per month difference (£482 against £483).

How long has this been going on?

In 2008 average home buying costs (£935) were 30% (or £217) higher than the average monthly rent paid (£719), but since then buying has actually been cheaper than renting, says the Halifax. 

It puts the change in affordability of buying relative to renting down to a 34% decline in home buying costs over the past four years. The majority of this fall occurred in 2009, when both house prices and mortgage rates dropped dramatically.

In contrast, the average monthly cost of renting has risen by 14% (£89) over the past three years - up from £652 in December 2009 to £741 in December 2012.

House buying now more attractive

According to Martin Ellis, housing economist at Halifax, this has greatly improved the financial attractiveness of buying a home. 

This could perhaps account for new research by first direct, which reveals that 3.6% of UK adults, equivalent to over 1.5 million people, said their biggest financial regret of 2012 was not moving or buying a home for the first time.  

Among 25 - 34 year olds, over 8% (almost 600,000 people) said that this was their biggest financial regret.

Hennessy Bowie & Co has been practising in Bishopbriggs for some twenty five years, principally in the areas of domestic conveyancing, commercial conveyancing, commercial leasing, executries and matters relating to care for the elderly.

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