For the past decade, buying a home in the UK has been more affordable than renting one, when only considering the monthly costs. The renting versus buying gap fluctuated during the period and in 2016, it reached its highest value of 131 British pounds. In 2022, the monthly costs for a first-time buyer were 971 British pounds, compared to 1,013 British pounds for renters.
Rental growth vs house price growth
Housing costs in the UK have been on an uprise, with both renting and buying a home increasingly out of reach. Though the monthly costs of buying have consistently been lower in the past decade, house price growth has been much stronger than rental growth since the beginning of the pandemic. Additionally, buyers have been affected by the aggressive mortgage rate hikes, making acquiring their first home even less affordable.
Barriers to home ownership
Buying a home is not straightforward. For younger (18-40) potential first-time buyers, there are a number of barriers. Approximately one in three first-time buyers point out that raising a deposit was the main obstacle. Other reasons stopping buyers were not being able to take out a mortgage on their current income and poor credit ratings. Unsurprisingly, the highest share of people who buy a home with a mortgage was in the age group of 45 to 55-year olds.
Average monthly costs of buying a home versus renting an apartment in the United Kingdom (UK) from 2012 to 2022
(in GBP)
Payments refer to the average for buying and renting a three bedroom house. Mortgage prices are based on Halifax 12-month rolling data calculated to January of each year.
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Lloyds Banking Group. (March 15, 2023). Average monthly costs of buying a home versus renting an apartment in the United Kingdom (UK) from 2012 to 2022 (in GBP) [Graph]. In Statista. Retrieved July 22, 2024, from https://www.statista.com/statistics/463920/halifax-average-first-time-buyer-monthly-costs-of-buying-renting-property/
Lloyds Banking Group. "Average monthly costs of buying a home versus renting an apartment in the United Kingdom (UK) from 2012 to 2022 (in GBP)." Chart. March 15, 2023. Statista. Accessed July 22, 2024. https://www.statista.com/statistics/463920/halifax-average-first-time-buyer-monthly-costs-of-buying-renting-property/
Lloyds Banking Group. (2023). Average monthly costs of buying a home versus renting an apartment in the United Kingdom (UK) from 2012 to 2022 (in GBP). Statista. Statista Inc.. Accessed: July 22, 2024. https://www.statista.com/statistics/463920/halifax-average-first-time-buyer-monthly-costs-of-buying-renting-property/
Lloyds Banking Group. "Average Monthly Costs of Buying a Home versus Renting An Apartment in The United Kingdom (Uk) from 2012 to 2022 (in Gbp)." Statista, Statista Inc., 15 Mar 2023, https://www.statista.com/statistics/463920/halifax-average-first-time-buyer-monthly-costs-of-buying-renting-property/
Lloyds Banking Group, Average monthly costs of buying a home versus renting an apartment in the United Kingdom (UK) from 2012 to 2022 (in GBP) Statista, https://www.statista.com/statistics/463920/halifax-average-first-time-buyer-monthly-costs-of-buying-renting-property/ (last visited July 22, 2024)
Average monthly costs of buying a home versus renting an apartment in the United Kingdom (UK) from 2012 to 2022 (in GBP) [Graph], Lloyds Banking Group, March 15, 2023. [Online]. Available: https://www.statista.com/statistics/463920/halifax-average-first-time-buyer-monthly-costs-of-buying-renting-property/