Scottish first-time buyers are now £31,000 betteroff than renters

17 February 2018

First-time buyers in Scotland save £31,000 on average when buying their own home instead of renting, according to research from Bank of Scotland.  

The average monthly costs associated with buying a three-bedroom house stood at £5032 in December 2017 - £103 lower than what it typically costs to rent the same sized property (£6063). This can save first-time buyers £1,240 per year.  

There is now a 17% gap between buying and renting, which is the largest (alongside South West England) when compared to the UK average of 10%. (Table 1) 

The monthly cost of purchasing a home for first-time buyers has now been cheaper than renting for the ninth year in a row. During this time, the costs associated with buying a property decreased by £253 per month. Meanwhile, the average monthly rent increased by £33.   

Buying is more affordable than renting across the whole of the UK 

Buying a house is more affordable than renting across the whole of the UK, with the most significant difference in both Scotland and South West England (17% cheaper). 

Londoners save the most money per year compared to renters with the typical first-time buyer paying £183 (12%) a month less than the average renter (£1,363 against £1,545 rent); an annual saving of £2,191. Meanwhile, the difference in Yorkshire and Humber is just £49 (£488 against £537 rent), an annual saving of £589. (Table 2) 

Graham Blair, mortgage director at Bank of Scotland, said: 

“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.  

“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.”  

Number of first-time buyers continues to rise 

The number of first-time buyers in Scotland reached 35,5004 in 2017, compared to 31,600 in 2016 – the highest level since 2006 (39,100). 

Having reached a low of 16,700 in 2011, the number of homebuyers getting on to the first rung of the property ladder has more than doubled (113%) to its current level.  

First-time buyers now account for half (50%) of all house purchases made with a mortgage in 2017. This has grown from 36% since 2007.