Scottish renters are paying up to £102 (16%) more each month than those who own their own homes, according to the latest Bank of Scotland Buying vs. Renting Review.
The research looks at the housing costs1 associated with a mortgage on a three-bed home, compared to the average monthly rent of the same property type [table 1].
Across the UK, the gap between owners and renters is greatest in London, where homeowners save 18% on average (£3,727 annually), followed by the South East (17%), South West and Scotland (both 16%). Buyers across all UK regions save upwards of 10% when compared to renters in the same area, with the exception of Yorkshire and The Humber, where homeowners save just 3% on average, of £235 per year.
Tara Foley, Managing Director, Bank of Scotland, said: “With an average saving of more than £1,000 a year versus renting, buying your own home is more cost effective in Scotland than the majority of UK regions, where savings vary from £235 in Yorkshire to £3,727 in London.”
“Although the overall gap between home buying and renting across the UK as a whole is at its smallest margin for 10 years, this masks some significant variations where homeowners are making considerable savings on the amount they are paying out each month.”
For the whole of the UK, homeowners are saving 3% on average (£227 annually), with the gap reducing from 17% year-on-year since 2015, when buyers were saving an average of £1476 per year or £123 per month.
This has reversed from 2009, when it was buying that was more expensive, and renters saved on average £209 per year, or £17 per month.
Tara Foley continued:“Although the overall gap between home buying and renting across the UK as a whole is at its smallest margin for 10 years, this masks some significant variations where homeowners are making considerable savings on the amount they are paying out each month.”
Over the last 10 years, with house prices increasing, average monthly buying costs have also increased by 26% (£150), driven by an increase in the average mortgage payment and a rise in the amount of the average deposit. The cost of renting has increased by 33% (£186) over the past 10 years to £747.