The monthly cost of owning a home for first-time buyers is currently 4% lower than the cost of renting the equivalent property, new analysis from Halifax has shown.

According to the latest Halifax Owning vs Renting Review, the average monthly mortgage cost for a first-time buyer is £42 lower than the cost for renters.

Halifax’s analysis, which is based on housing costs for first-time buyers with a mortgage on a three-bed home compared to the average monthly rent of the same property type, found that the £971 owners are now paying compares to £1,013 for renters, each month.

While this equates to an estimated £504 saving per year for owners, the gap is down from its peak in 2016, when homeowners were saving £1,567 annually compared to renters.

The UK’s greatest gap between owners and renters, in percentage terms, can be found in Scotland. Those renting in the nation are paying an average £918 per month, compared to £727 for homeowners – a saving of 21% for those on the property ladder.

“Our latest analysis shows that becoming a homeowner can bring significant savings for people,” said mortgages director at Halifax, Kim Kinnaird. “Nationally, homeowners are almost £500 better off than renters each year.”

Kinnaird added: “Of course, making the move from renting to home ownership can be difficult for many, as raising a sufficient deposit and then finding the right property can be challenging.

“While a predicted fall in house prices this year will be welcome news for those looking to buy their first home, it doesn’t change the fact that getting on the property ladder remains expensive – a problem that is compounded when rents are high, impacting the ability to save.”

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