An annual study from Bank of Scotland found that the average monthly costs associated with buying a three-bedroom house stood at £5032 in December 2017 – £103 lower than what it typically costs to rent the same sized property (£6063). This can save first-time buyers £1,240 per year, and £31,000 over a 25-year period.
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 per month while the average monthly rent increased by £33.
The gap between buying and renting in Scotland is now 17%, the largest (alongside South West England) when compared to the UK average of 10%.
The number of first-time buyers in Scotland reached 35,5004 in 2017, compared to 31,600 in 2016 – the highest level since 2006 (39,100).
Having reached a low of 16,700 in 2011, the number of homebuyers getting on to the first rung of the property ladder has more than doubled (113%) to its current level.
First-time buyers now account for half (50%) of all house purchases made with a mortgage in 2017. This has grown from 36% since 2007.
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.
“Although these monthly costs don’t include all the up-front 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.”