The mortgage arm of Santander has claimed today that owning a home is cheaper than renting in all areas of the UK and that first time buyers shouldn’t be put off by the challenges of saving up a deposit because of the costs gap of owning rather than renting a property.
Santander reckons first time buyers in the UK can on average save £2,250 a year by owning a property, and £3,648 in London.
“Many first time buyers understandably focus on the challenge of saving for a deposit and wonder how they will afford a property,” Miguel Sard (right), Managing Director of mortgages at Santander UK says.
“However, it is often assumed that when you purchase a property you will be under greater financial pressure and our research shows the reverse is true.”
But Kevin Roberts of Legal & General Mortgage Club (below) has been quick to point out today that the almost impossible task faced by many first time buyers to save up a deposit means many are unable to access the annual ‘savings’ to be made from owning versus renting that Santander is so keen to tout.
“For many aspiring homeowners, saving for this initial deposit is easier said than done, with many having to rely on the Bank of Mum and Dad,” he says.
“One of the challenges many would-be homeowners face is putting enough money aside for a deposit, whilst balancing other monthly outgoings such as rent, bills, and recreational spending.
“With over 40% of income spent on rent, this is ultimately leading to some borrowers who may appear perfectly lendable to on paper, remaining in the private rental sector.”