Buying over £1800 cheaper than renting

22 March 2022

  • Annual homeownership costs were £1,817 cheaper than renting in 2021
  • Cost gap greatest in Scotland and the North West of England (22%)
  • Gap has grown by £1,236 since 2011


Scottish first-time buyers could have saved around £1,800 last year on housing costs compared to renters in equivalent properties, Bank of Scotland has found.

The Bank of Scotland Buying vs Renting Review is based on the housing costs associated with a mortgage on a three-bed home, compared to the average monthly rent of the same property type.

In the last year, monthly rental costs grew by just 2% to £699, while buying costs grew by 5% to £548, a monthly saving for homeowners of just over £151, or £1,817 annually.

The annual cost gap between buying and renting is now £1,236 (213%) greater than 10 years ago (see Table 1). However, the current annual difference (£1,817) is not as great as in 2020, when annual ownership costs were £1,927 less than those for renting.

Since 2011 the average annual saving for homebuyers is £1,405; an estimated total of £35,125 over the life of a 25-year mortgage. (See Editors’ Notes).

Proportionately, buyers in Scotland and the North West of England benefit from the biggest difference (22%). In absolute terms, the gap between annual rent and ownership was greatest in London, where renting is £4,181 more costly. The smallest gap is in Northern Ireland, where renting is just £17 per month (3%) higher than ownership. (£205 per year) (See Table 2).

Graham Blair, Mortgages Director, Bank of Scotland, said: “Over the last year, we have seen record numbers of buyers entering the market, moving to bigger properties and taking advantage of the Stamp Duty holiday. However, historic lows for interest rates have kept mortgage costs down, compared to rents.

“For the second year running, Scottish buyers see the biggest proportional difference in costs compared to renters. Still, before homebuyers can benefit from lower monthly costs, a deposit needs to be put together, still the greatest challenge for many first-time buyers. The £35,000 average deposit we see in our data may be an unimaginable sum to potential first-time buyers, but it’s much higher than many need to get a foot on their housing ladder. Deposits from 5% are available and, based on the average house price, would mean putting down a £6,800 deposit - significantly less than the average.”

The average deposit for Scottish first-time buyers, as a proportion of house price, fell marginally from 21% in 2020 to 20% in 2021. However, in cost terms, the rise of £2,299 to £34,975, was up 7%. (See Table 3 in full press release.)