Buying a house in the UK is more financially attractive than renting as house prices continue to fall, according to research from Halifax.
The cost of buying a home in Britain has become £1,440 ($2,234, €1,671) per year, or £120 a month, cheaper than renting, thanks to price drops and record-low interest rates. The average monthly costs associated with buying a three-bedroom house was £621 in December compared with a typical monthly rent of £741 on a similar property, claimed the survey.
In December 2011, buying was £99 a month cheaper than renting, while buying a home was £217 a month more expensive than renting in December 2008.
Further, the gap between the cost of owning a home and renting a property is widening year-on-year, according to the research.
The rental sector has been experiencing increased demand and rising prices as more prospective home buyers preferred renting due to the tight deposit requirements by lenders.
Buying costs have declined by 34 percent over the past four years, while average monthly rents rose by 14 percent, according to the Halifax study.
"Concerns over job security and raising a deposit are the main obstacles to people buying their own home. However, it is worth noting that once home buyers are on the first rung of the ladder, their monthly costs are notably lower," said Martin Ellis, housing economist at Halifax.
The recent declines in house prices and record-low interest rates as a result of the Bank of England's Funding for Lending Scheme are helping first-time buyers to get on to the property ladder.
In London, buying is most affordable compared with renting, with a monthly difference of £193. In Yorkshire and the Humber buying is just £1 a month cheaper than renting, Halifax said.
On 15 February, a survey by LSL Property Services found that home rental costs in the UK declined in January for the third straight month as the increased availability of mortgages eased competition in the sector.