Scottish first-time buyers now £31,000 better off than renters

First-time buyers in Scotland save £31,000 on average when buying their own home instead of renting, according to research from Bank of Scotland.

The average monthly costs associated with buying a three-bedroom house stood at £503 in December 2017 - £103 lower than what it typically costs to rent the same sized property (£606). This can save first-time buyers £1,240 per year.

There is now a 17 per cent gap between buying and renting, which is the largest (alongside South West England) when compared to the UK average of 10 per cent.

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.

Buying a house is more affordable than renting across the whole of the UK, with the most significant difference in both Scotland and South West England (17 per cent cheaper).

Londoners save the most money per year compared to renters with the typical first-time buyer paying £183 (12 per cent) 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 (£488 against £537 rent), an annual saving of £589.

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.”

The number of first-time buyers in Scotland reached 35,500 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 per cent) to its current level.

First-time buyers now account for half (50 per cent) of all house purchases made with a mortgage in 2017. This has grown from 36 per cent since 2007.