First-time buyers in Scotland save £31,000 over the course of a typical mortgage when buying their own home instead of renting, a report has revealed.
There is now a 17 per cent gap here between buying and renting, which is the largest – alongside south-west England – when compared with the UK average of 10 per cent.
Typically, a buyer north of the Border saves £103 a month compared with someone who is renting their home. Monthly costs for a home owner run to an average of £503, compared with £606 for a tenant, according to research from the Bank of Scotland. Over the course of a typical 25-year mortgage, the savings run to a total of £31,000.
Meanwhile, the figures showed that the monthly cost of purchasing a home for first-time buyers has now been cheaper than renting for the ninth year in a row. During this time, the costs associated with buying a property decreased by £253 a month, while the average monthly rent increased by £33.
Graham Blair, mortgage director at Bank of Scotland, said: “Considering the financial benefits of home-ownership and a sustained period of low interest rates, it’s no surprise that buying a property continues to be cheaper than renting, particularly in Scotland, where first-time buyers now make up half of the housing market.”
He added: “Although these monthly costs don’t include all the upfront fees associated with buying a home, the low average monthly cost of buying, when compared to renting, will no doubt help those looking to take their first step on the property ladder.”
The report found that buying a house is more affordable than renting in all regions of the UK.
Although the percentage difference is highest in Scotland and south-west England, Londoners save the most money per year compared with renters, with the typical first-time buyer paying £183 a month less than the average renter – £1,363 against £1,545 rent – an annual saving of £2,191.
Meanwhile, the difference in Yorkshire and Humber is just £49, an annual saving of £589.
The study found that the number of first-time buyers in Scotland reached 35,5004 in 2017, compared with 31,600 in 2016 – the highest level since 2006.
Having reached a low of 16,700 in 2011, the number of homebuyers getting on to the property ladder has more than doubled to its current level. First-time buyers accounted for half of all house purchases made with a mortgage in 2017, the report said, up from 36 per cent in 2007.