THE cost for a first-time buyer of owning a home in Yorkshire is more than £220 a year less expensive than renting, research has found.
The average monthly cost of running a three-bedroom house for someone taking their first step on the Yorkshire property ladder stands at £509, £19 a month – or £228 a year - lower than the typical monthly rent on a similar property, according to Halifax. In Wales and the West Midlands the savings for homeowners are even higher.
Cheap mortgage deals have helped widen the cost gap between buying and renting in recent years. Five years ago, the average cost of owning your first property was about £37 a month more expensive than renting, Halifax said.
Buying has become even cheaper compared with renting over the last year. A year ago, the cost of owning a first-time buyer home was around £93 a month less expensive than renting.
Halifax confirmed that while the typical monthly cost of buying a home has increased by £25 compared with a year ago, typical rental costs have increased at a faster rate and have lifted by £42 a month.
The East Midlands is the only region where potential first-time buyers will still find it cheaper to rent than to buy.
The research assumed that a first-time buyer had a deposit of around 10 per cent, or £15,748. When considering buying costs, it took into account mortgage payments, household maintenance, insurance costs and the income that would be lost through funding a deposit rather than having cash sitting in savings.
The Government’s Help to Buy scheme has helped to improve the availability of low-deposit mortgages. But with speculation mounting over exactly when the Bank of England base rate will start rising from its five-year low of 0.5 per cent, home owners have been warned to think now about how they will cope when the cost of borrowing increases.
Ilkkey-based Patrick McCutcheon, head of residential at Dacre, Son & Hartley, said: “This year I met a charming old Yorkshire farmer who was clearly ‘comfortable’ in his retirement.
“Asking him about his financial success he replied ‘buy property when young and live long’. I can’t disagree with his sentiment but have every sympathy for those trying to break on to the housing ladder whilst paying rent and struggling to save in a low wage inflation period. But if it’s possible, listen and act on the words of my farmer friend.”
Amy Wray, of Applegate Properties in Holmfirth, said the rental market remained “extremely buoyant” because many could not meet the mortgage company’s more stringent criteria.
“Whilst there are schemes in place to help first time buyers, we find many would rather try and save the deposit as the recent recession has reinforced to the younger generation that the future is not always certain.”