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Property: Owning a home in Northern Ireland ‘potentially £2,136 a year cheaper than renting'

PA

First-time buyers in Northern Ireland could potentially make an average yearly saving of £2,136 if they were able to get on the housing ladder rather than rent.

The UK-wide study, conducted by Santander Mortgages, weighed up the potential cost of home-owners’ monthly mortgage payments against what they could expect to pay out by renting.

It found that, across the UK, there were potential savings to be made by being on the property ladder. 

But it also discovered that the average first-time buyer deposit needed is over £51,000. In Northern Ireland the average deposit is £30,435 while the average first-time buyer house price is £131,076.

Here, first-time buyers can expect a monthly mortgage repayment of £451 - compared with an average rent of £629 per month.

That would equate to an average saving of £178 per month or £2,136 over the course of one year. 

First-time buyers in London could potentially make the biggest saving by getting on the property ladder, Santander found.

It said the average monthly rent there is £289 higher than monthly mortgage payments - or a potential saving of nearly £3,500 per year.

But this would be based on first-time buyers in London needing to raise a deposit of nearly £135,000, according to the calculations.

Santander found the smallest difference between rent and mortgage payments is in the East of England, at £43 per month - or just over £500 a year.

The research, which used average rents from the Homelet index and Office for National Statistics (ONS) house price figures, made several assumptions about a first-time buyer’s mortgage payments, including that they would have a 24 per cent deposit, a mortgage rate of 2.48 per cent and be paying off what they owe over 25 years.

Miguel Sard, managing director of mortgages at Santander UK, said: “Of course, buying a property is a major financial investment with up-front costs to consider, but long-term the financial benefits can be significant.

“With annual savings averaging well over £2,000, this can really mount up over time and, of course, once the mortgage is paid off, you have a valuable asset to show for it.

“Getting independent advice and looking for competitive rates, is crucial to get the right mortgage to meet potential home-owners individual needs.”

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