Record low mortgage rates are contributing to a market where it is cheaper for first-time buyers to buy rather than rent.
The average monthly cost associated with a first-time buyer buying a three bedroom house was £658 in December, according to figures released by mortgage lender Halifax at the weekend. It compares to an average rent of £720 paid on a similar type of property.
Competition among lenders has pushed mortgage rates to record lows in recent months.
In London, buying over renting saved an average of £1,338 over the year in 2014, representing an eight per cent saving for buyers.
London marked the biggest saving for buyers nationally, with the smallest saving being found in the East Midlands where buying is only one per cent cheaper.
Halifax’s figures do not take into account stamp duty, valuation and legal fees.
“Average home buying costs are significantly lower than average rental costs, providing first-time buyers with a large financial saving if they can get on the housing ladder,” said Craig McKinlay, mortgage director at Halifax.