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Abbey rallies first-time buyers: cheaper to buy than rent

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by Gill Montia

Abbey has been working out accommodation costs for potential first-time buyers currently in the rental sector and has discovered that for those living outside London, it is now cheaper to buy rather than rent.

The good news is only for those who have managed to save a 25% deposit but nonetheless means that over than 1.6 million potential first-time buyers could save an average £624 over the next 12 months, if they take the plunge and buy a home.

The typical first-time buyer flat or terraced home has plunged in value by 9% over the past 12 months, falling to an average £90,000.

Some of the biggest savings between buying and renting are to be found in the North West where the average terraced house costs just under £70,000, according to Abbey.

In this case, a first-time buyer with a 25% deposit could save £88 per month, with mortgage repayments of around £286 a month, compared to the average rent of just under £374.

In Wales the saving extends to £90 a month, based on a terraced house costing around £80,000 and with a 25% deposit.

Abbey’s director of mortgages, Nici Audhlam-Gardiner, says the research shows there is hope for potential first-time buyers as long as they save for a deposit.

She adds: “We remain committed to helping first-time buyers get a foot onto the property ladder and the new Homebuyer Plus range of mortgages, with free legal costs of purchase and free valuation, available in both fixed and tracker deals, is yet another example of this.”

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News posted: October 11, 2009

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