Comment: Mind the gap between renting and owning a home
Two reports published recently have revealed the stark differences in monthly outlay between renting and buying a home and how this gap is widening across the UK. The Halifax revealed that it costs £130 a month more to rent than own, a gap that's widened by £52 a month over the past year spurred on by lower owning costs of three per cent while renting has increased by five per cent.
But just four years ago this inequality was turned on its head; in 2008 it was £324 a month cheaper to rent than own a property, the Halifax research shows.
Property website Zoopla also revealed last week another side of the renting versus owning gap, namely how it's more expensive to rent in nine out of ten British towns lead by York (69 per cent more) followed by Milton Keynes (41 per cent), Derby (37 per cent), Birmingham (35 per cent) and Preston (33 per cent).
The Halifax doesn't go into such detail about towns, but it does pinpoint which regions of the UK have the greatest rent-versus-own divide. These are London where it costs £177 a month more to rent followed by Northern Ireland (£49), East Anglia (£49), the North West (£44) and Scotland (£40).
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Zoopla's research also focuses on London, where renting is even more expensive than buying compared to the rest of the country, with average rents running 17 per cent higher on average than servicing a mortgage.
Asking prices for two bedroom flats in London currently stand at £483,069 while the average rent on an equivalent property is £2,362 a month, so owners in London are £4,200 a year better off than renters.
Since 2008, there has been a shortfall of some 100,000 first-time buyers coming to the market each year as poor job prospects, difficult-to-secure loans and ballooning deposits have kept them in rented accommodation.
So, with around half a million extra people needing rented accommodation, this demand is driving up rents all over the UK which, in turn, makes owning less expensive.