Renting more expensive than a mortgage across the UK

June 22, 2016 by Brendan O'Neill

Home owners

According to recent studies, the cost of monthly rent is now more expensive than a monthly mortgage payment across the whole of the UK.

The study, conducted by Santander, revealed that even a home owner with a very large mortgage would pay less than a tenant. The average rent for a tenant in the UK is £995 a month, whereas the average monthly mortgage payment is £805 for a first time buyer.

The figures for the mortgage payment have been calculated based on an average deposit of 21%, with the total mortgage being 79%. Over a 12-month period, a tenant pays £2,300 more than a home owner.

However, the study is based on the cost of an average mortgage and average rent across the UK. It doesn’t take into account the further expenditure of a home owner, like the cost of repairs and property maintenance.

Rent appears to be highest in the south west of England, where a mortgage payment is £192 a month lower than the cost of renting. Rent for London tenants is £179 higher than an average mortgage payment.

The comparison between rents and mortgages appears to be a little more even in the east of England, where the cost of rent is just £2 higher than the average mortgage payment. Trying to make the switch from renting to buying is difficult, although Help to Buy schemes can make the transition more affordable.

Mortgage advisers are required to qualify for the CeMAP qualification, so that they are able to offer advice to those who wish to become home owners.