It is now 14 per cent cheaper to buy a property than rent it, according to the Halifax.
Falling mortgage interest rates and the record low Bank of England base rate mean that the costs associated with owning a home are now 14% less than renting it.
The average monthly costs associated with buying a three bedroom house in the UK stood at £608 in March 2011; 14% (£98) lower than the average monthly rent paid on the same property type of £706.
This contrasts strongly with the situation three years ago when the average costs of buying were significantly higher than the typical rent because interest rates were much higher before the credit crunch.
“Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing homeowners’ disposable income.”, says Suren Thiru, housing economist at Halifax.
However mortgages are still difficult to obtain and interest rates may start to rise later this year, as Suren Thiru warns:
“The current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many.”
That buying property is favoured over renting is also bourne out by other news that Brits are showing an increased confidence in the housing market.
The vast majority (84%) of those questioned in a survey by The Worldwide Property Group said that it is now the right time to invest in property.