30. Januar 2012 
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Buying is 6% cheaper than renting
Buying a home in Scotland is 6% cheaper than renting, according to research by Bank of Scotland. The typical monthly cost of buying a three bedroom house in Scotland was £510 in December 2011: 6% (or £30) lower than the average monthly rent of £540 paid on the same property type. The current cost of buying in Scotland, at £510 per month, is 15% lower than the UK average (£600).
This represents a significant turnaround compared with three years ago when the average cost of buying was 47% higher than the average rent paid.
Home buying costs have fallen by more than a quarter (£330) since 2008, driven by a decline in the average monthly mortgage payment of 37% (£250) due to the marked fall in mortgage rates and house prices. The mortgage rate for a new borrower has been reduced to an average of 3.63% in 2011 from 5.75% in 2008, while the average house price has dropped by 17% over the same period.
Over the past year, buying costs have dropped by 6% whilst the typical cost of renting has risen by 1%, continuing the trends seen in 2010.
Scotland is one of the most cost-effective parts of the UK for buying relative to renting
Buying a home was more cost-effective than renting in eleven out of the twelve UK regions in December 2011. In contrast, buying was more costly than renting in all regions in December 2008, demonstrating the considerable turnaround over the last three years. Despite having higher absolute costs, across the UK, buying is currently most affordable relative to renting in London with the average borrower in the capital paying 10.2% less per month than the typical private tenant. Scotland is the fourth most cost-effective part of the UK for buying relative to renting in percentage terms. At the other end of the spectrum, Wales is the only region where renting remains cheaper than buying.
Home Buyers: the inside track
The number of buyers entering the market has continued to decline despite the improvement in the affordability of buying compared with renting since 2008. Bank of Scotland estimates that there were around 43,000 home purchases with a mortgage in 2011: the lowest annual total since 1974 and 10% lower than in 2010. Much of this decline can be attributed to the increase in the size of the deposit required, with the size of the average deposit put down having risen significantly over the past decade. In addition, higher costs related to moving home such as stamp duty and estate agents fees have also added to the overall cost of home buying.
Nitesh Patel, housing economist at Bank of Scotland, commented:
„The affordability gains for buyers in Scotland relative to renters in the last three years have been significant, albeit less than the improvement in buyer affordability across the UK. The average mortgage payment has fallen over recent years as a result of falling house prices and mortgage rates.
“Nonetheless, despite the improvement in the relative affordability of buying a home, the number of purchasers has continued to fall due to the ongoing challenges in raising a deposit and the considerable uncertainty over the prospects for the economy, which have severely constrained housing demand."
This represents a significant turnaround compared with three years ago when the average cost of buying was 47% higher than the average rent paid.
Home buying costs have fallen by more than a quarter (£330) since 2008, driven by a decline in the average monthly mortgage payment of 37% (£250) due to the marked fall in mortgage rates and house prices. The mortgage rate for a new borrower has been reduced to an average of 3.63% in 2011 from 5.75% in 2008, while the average house price has dropped by 17% over the same period.
Over the past year, buying costs have dropped by 6% whilst the typical cost of renting has risen by 1%, continuing the trends seen in 2010.
Scotland is one of the most cost-effective parts of the UK for buying relative to renting
Buying a home was more cost-effective than renting in eleven out of the twelve UK regions in December 2011. In contrast, buying was more costly than renting in all regions in December 2008, demonstrating the considerable turnaround over the last three years. Despite having higher absolute costs, across the UK, buying is currently most affordable relative to renting in London with the average borrower in the capital paying 10.2% less per month than the typical private tenant. Scotland is the fourth most cost-effective part of the UK for buying relative to renting in percentage terms. At the other end of the spectrum, Wales is the only region where renting remains cheaper than buying.
Home Buyers: the inside track
The number of buyers entering the market has continued to decline despite the improvement in the affordability of buying compared with renting since 2008. Bank of Scotland estimates that there were around 43,000 home purchases with a mortgage in 2011: the lowest annual total since 1974 and 10% lower than in 2010. Much of this decline can be attributed to the increase in the size of the deposit required, with the size of the average deposit put down having risen significantly over the past decade. In addition, higher costs related to moving home such as stamp duty and estate agents fees have also added to the overall cost of home buying.
Nitesh Patel, housing economist at Bank of Scotland, commented:
„The affordability gains for buyers in Scotland relative to renters in the last three years have been significant, albeit less than the improvement in buyer affordability across the UK. The average mortgage payment has fallen over recent years as a result of falling house prices and mortgage rates.
“Nonetheless, despite the improvement in the relative affordability of buying a home, the number of purchasers has continued to fall due to the ongoing challenges in raising a deposit and the considerable uncertainty over the prospects for the economy, which have severely constrained housing demand."
