Renting is cheaper than buying in most of the UK, but not in London, according to new data from Halifax.
New data from the country’s biggest mortgage lender shows that the average monthly cost to first-time buyers to own a home in the capital is now £2,241, slightly less than the monthly cost of renting.
London was one of only three UK regions where renting remained the costlier option, alongside the South West and Scotland. In some regions, renting was well over £100 cheaper.
The cost of buying a home has surged as mortgage rates rocketed within the last 18 months, while home prices have dipped but not crashed.
The average house price for a first-time buyer in London is now £559,263 according to Halifax, down from £586,756 a year earlier. Londoners are having to stump up massive deposits in order to get a mortgage on those homes, with the average first-time buyers deposit coming to £190,830, or 34% of the home price.
Kim Kinnaird, mortgages director at Halifax, said: “Our latest analysis shows that, in nearly all regions across the UK, first-time buyers are better off renting than owning a similar home. In fact, the only regions where it’s cheaper to own rather than rent, are the South West, London and Scotland.
“We know home ownership can offer long term financial and living stability and that's why we believe it’s an important step to take. Our customers want to create a secure future, so it's a big priority for us to help people get there. However, elevated borrowing costs, alongside a lack of available homes to buy, is pushing ownership further out of reach for would-be first-time buyers in many parts of the country.
“This is why we’re major participants and big supporters of the Government’s affordable home ownership schemes, such as shared ownership and the mortgage guarantee scheme and we're committed to helping first-time buyers fulfil their dreams of having a place to call their own.”
