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New research from Bank of Scotland has revealed that first-time buyers in Scotland save £31,000 on average when buying their own home instead of renting.
According to the research, the average monthly costs associated with buying a three-bedroom house stood at £503 in December 2017 - £103 lower than what it typically costs to rent the same sized property (£606). This can save first-time buyers £1,240 per year.
Buying a house is more affordable than renting across the whole of the UK, but the gap in Scotland between buying and renting is now one of the largest and stands at 17%, compared to a UK average of 10%.
The monthly cost of purchasing a home for first-time buyers has now been cheaper than renting for the ninth year in a row, says Bank of Scotland. During this time, the costs associated with buying a property decreased by £253 per month. Meanwhile, the average monthly rent increased by £33.
“Considering the financial benefits of home-ownership and a sustained period of low interest rates, it’s no surprise that buying a property continues to be cheaper than renting, particularly in Scotland, where first-time buyers now make up half of the housing market,” commented Graham Blair, mortgage director at Bank of Scotland.
“Although these monthly costs don’t include all the up-front fees associated with buying a home, the low average monthly cost of buying, when compared to renting, will no doubt help those looking to take their first step on the property ladder,” he added.
Despite the widely-reported difficulties experienced by first-time buyers in getting on the property ladder, the numbers managing to take that all-important first step appear to be rising.
Recent research by Halifax found that 359,000 people bought their first home in the UK in 2017, which is a rise of 6% compared to the previous 12 months.
Researchers at Halifax found that although the average price of a typical first home has grown by 21% (or £37,377) from £174,703 to £212,079, first-time buyer levels have almost returned to those last seen in 2007, when 359,900 took their first step on to the property ladder.
This is an increase of 87% compared to an all-time low of 192,300 in 2008 and is now just 11% below the most recent peak of 402,800 in 2006.
First-time buyers apparently now account for half of all house purchases, with a mortgage, an increase from 36% a decade ago.
“A flow of new buyers into home ownership is vital for the overall wellbeing of the UK housing market,” explained Russell Galley, Managing Director, Halifax. “This ten-year high in the number of first-time buyers shows continued healthy movement in this key area despite a shortage of homes and the ongoing challenge of saving enough of a deposit.”
For expert legal advice on buying or selling property in Scotland, whether you are a first-time buyer or experienced home-mover, then contact our specialist property and conveyancing solicitors today.
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