Buying is £124 a month cheaper than renting
It is £124 a month cheaper on average to own a typical three-bedroom home in the UK than it is to rent, according to Halifax.
The average monthly cost of home ownership was £645 in December 2013 (based on a mortgage of 73% of the average three-bedroom property value) - 16% lower than the typical monthly rent of £769 charged for the same property type.
Halifax said the relationship between the cost of owning and renting is being driven by average monthly rents increasing by over £100 since 2009, while ownership costs have remained almost the same over the period.
The gap between the two costs in December 2013 was the biggest it had been since 2009, when there was a difference of just £6 (in 2009 it cost £646 a month on average to own, and £652 to rent).
A year earlier, things were completely different. In 2008, the monthly ownership cost was 31% higher than the cost of renting.
However, the cost of buying versus renting is very much dependent on location. For example, in London it's £188 a month cheaper to buy than to rent, but in the West Midlands and East Anglia, it's only £6 a month cheaper to buy.
Craig McKinlay, mortgage director at Halifax, said: "There has been a substantial improvement in the affordability of owning compared to renting in recent years. Buying will continue to be a more financially attractive option as the cost of owning a home remains stable.
"With greater availability of mortgages that require smaller deposits, the property ladder has also become even more accessible for those who can afford the monthly costs of owning but had previously not been able to save the necessary deposit."
While the buying costs included in the Halifax research include mortgage payments, the deposit, maintenance and insurance, they exclude stamp duty, valuation and legal fees - which make up a significant chunk of a homebuyer's costs.
A catch-all phrase that can range from assessing the price of a property or vehicle before offering it for sale or the net worth of assets in an investment portfolio to the prices of shares on a stock exchange.
A hugely unpopular tax paid on property and share purchases. Stamp duty on property is levied at 1% for purchases over £125,000 (£250,000 for first-time buyers) which then moves up at a tiered rate. For property between £125k and £250k you pay 1%, then 3% from £250k up to £500k and then 4% from £500k to £1m and then 5% for properties over £1m. But unlike income tax, which is “tiered” and different rates kick in at different levels, stamp duty is a “slab” tax where you pay the rate on the whole purchase price of the property. On shares, stamp duty is charged at a flat rate of 0.5% on all share purchases. Figures correct as of May 2011.