The South West, London and Scotland are now the only regions in the UK where owning a first home is cheaper than renting, Halifax has found.

Research by the lender has revealed that monthly homeowning costs for first-time buyers have risen by 113% in the last decade, with rental costs increasing by 82%.

In Halifax’s latest owning vs renting review, the monthly cost to first-time buyers of owning a home is now £1,231, a figure £27 lower than renting an equivalent property, which is the smallest gap between homeownership and renting recorded since 2019.

The analysis, which is based on the housing costs associated with a mortgage on a three-bed home compared to the monthly rent of the same property type, found that monthly rental costs grew by 24% in 2023 to £1,258, while homeowning costs grew by 27% to £1,231.

However, the monthly cost of owning a first home compared to the equivalent rental cost was higher in nine out of 12 regions in the UK last year.

The East of England is the region where renters are making the biggest savings compared to first-time buyers, where they are saving an average £2,325 a year.

Renting in the South East (£1,859), East Midlands (£1,741) and Yorkshire and the Humber (£1,731) also saw "significant" yearly savings when compared to owning a first home.

Mortgages director at Halifax, Kim Kinnaird, said: "Our latest analysis shows that, in nearly all regions across the UK, first-time buyers are better off renting than owning a similar home. In fact, the only regions where it’s cheaper to own rather than rent, are the South West, London and Scotland.

"We know homeownership can offer long term financial and living stability and that's why we believe it’s an important step to take. Our customers want to create a secure future, so it's a big priority for us to help people get there.

"However, elevated borrowing costs, alongside a lack of available homes to buy, is pushing ownership further out of reach for would-be first-time buyers in many parts of the country. This is why we’re major participants and big supporters of the Government’s affordable home ownership schemes, such as shared ownership and the mortgage guarantee scheme and we're committed to helping first-time buyers fulfil their dreams of having a place to call their own."

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