First time buyers are better off in terms of cost than those who rent in Scotland
First time buyers in Scotland are now £31,000 better off than those who rent a home meaning that owning is cheaper than renting for the ninth year in a row.
The analysis from the Bank of Scotland shows that the average monthly costs when buying a home are now 17% cheaper than renting a typical three bedroom house at £503 compared to £606.
This can save first time buyers £1,240 per year and £31,000 over the term of an average mortgage and the 17% gap between buying and renting is the largest compared to the Uk average of 10%.
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. Meanwhile, the average monthly rent increased by £33.
‘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,’ said Graham Blair, mortgage director at the Bank of Scotland.
‘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,’ he added.
The research show that the number of first time buyers in Scotland continues to rise, reaching
35,500 in 2017 compared to 31,600 in 2016, the highest level since 2006 when it was 39,100.
Having reached a low of 16,700 in 2011, the number of home buyers getting on to the first rung of the property ladder has more than doubled, up 113% to its current level.
It means that first time buyers now account for half of all house purchases made with a mortgage in 2017. This has grown from 36% since 2007.