In December 2012, the average monthly costs associated with buying a three-bedroom home stood at £621, compared to the typical monthly rent of £741 on the same property type.
Over the course of a year, these savings stack up to an impressive £1,440.
And it's not just recently that it's become cheaper to buy than rent – this has been the case since 2009 as house prices and mortgage rates have edged down. In contrast, the average monthly cost of renting has risen by 14% (£89) since then.
But do homeowners always get a better deal than tenants? We take a look at whether this is true in case of the following scenarios.
1. Cost of the deposit
The main barrier to buying a property continues to be raising a deposit. And it's no wonder when, according to Halifax, the average first-time buyer deposit last year was a hefty £27,984.
At a typical six week’s rent, the deposit for rented accommodation is far less. The National Landlords Association pegs the average rental deposit at £1,105 – a ‘saving’ of nearly £27,000.
2. Monthly repayments
If you manage to get enough of a deposit together, the good news is you'll be able to take advantage of tumbling mortgage rates – in fact, they are now at their lowest ever levels. Rents, on the other hand, are going up.
The very best mortgage deals are still reserved for those with a large deposit, but those with smaller sums can benefit too.
If you have a deposit of 40% of the property value, you can enjoy mortgage rates as low as 1.89% with Chelsea Building Society's two-year fixed rate mortgage. But watch out for the £1,695 fee.
Alternatively, Yorkshire Building Society offers a two-year fixed rate mortgage at 1.94%, again for those with a 40% deposit. It has a £1,495 fee.
Those with a smaller 10% deposit can take advantage of Chelsea Building Society's two-year fixed rate deal at 3.69% with a fee of £1,695.
With figures from Halifax pegging the average January house price at £162,932, if you had a 40% deposit, your monthly mortgage repayments would come to £409 with Chelsea's 1.89% two-year deal repaid over 25 years. Compare this to January's average rent of £746 a month, according to the National Landlords Association, and you'll see how the savings stack up.
Even with a 10% deposit, your mortgage repayments would be £749 a month with Chelsea's 3.69% deal over 25 years. Although this is £3 more a month than the average rental payment, don't forget that with a mortgage, you'll have something for show for it at the end of it – rather than effectively throwing money down the drain
What's more, a mortgage offers a lot more stability. If you're renting, there's no guarantee your rent won't rise – although if your tenancy is for a fixed term, your landlord can't up the rent during that term. Your tenancy also can't be terminated during the fixed term unless you've broken your side of the agreement. Outside the fixed term, your landlord can give you two months' notice to leave.
So long as they are meeting their mortgage repayments (look at a fixed rate deal if you need security), homeowners don't need to worry about being kicked out of their property.
3. Household bills
Renters also get a worse deal when it comes to household bills. After all, it's not officially your home so you're likely to be stuck with the energy supplier chosen by your landlord. That means you could be paying over the odds for your gas and electricity bills.
In comparison, homeowners will have the freedom to switch to a better deal whenever they see fit. Our research shows that customers could reduce their annual energy bill by 22% if they switched to the best deal, a saving of £282 per household.
4. Maintenance costs
But while renting means you'll have no control over your gas and electricity supplier, it also means you won't need to worry about maintenance costs. If the boiler breaks down or the washing machine packs up, it will be your landlord's responsibility to pay the costs associated with fixing it. Of course, if you seriously damage the property, your landlord can hold back some of your deposit when you move out.
Homeowners, meanwhile, will have to pay for maintenance costs out of their own pocket.
5. Home insurance costs
Similarly, when it comes to buildings insurance, it's the landlord's responsibility to pay for it as they own the property. As a renter, all you'll need to worry about is contents insurance.
But if you've bought the property, you'll have to pay for both contents insurance and buildings insurance – though you can save by shopping around for the best deal. Note that if you own a leasehold flat, the landlord who owns the freehold may have buildings insurance – but you'll probably pay the premiums through your service charge.
6. Home improvements
Renters won't be able to make any changes to their home without permission from their landlord – and even then, home improvements will be minimal; a splash of paint at most.
Homeowners, on the other hand, can do what they want with their property. And while the initial costs of these improvements can be expensive, they can also add value to your home – which you'll benefit from when you sell up.
Research by HSBC revealed a loft conversion was the best way to improve a property's value, adding on average £16,152. A room extension adds £15,665 on average and a conservatory £9,420.
According to the government’s most recent English Housing Survey, 49% of people who own their own home are under-occupying. So if you fancy making a little extra cash and have a furnished spare room, you can rent it out to a lodger.
Websites such as MondaytoFriday.com list people who need a room just during the week, so you get your home back at the weekends. According to the website, rooms range in price from between £250 and £800 a month. Remember you can also earn the first £4,250 in rental income each tax-free under the government’s Rent a Room scheme. Put this towards the cost of your mortgage or rent and you'll be quids in.
Rent a Room applies whether you're a homeowner or a tenant, but homeowners are likely to find it easier. If you're renting, you'll need to get your landlord's permission first and unless you have an excellent relationship with them, this could prove difficult.
It's a close call, but with four wins out of seven, it seems homeowners really do have a better deal compared to renters. Although the upfront costs of buying a property (deposit, mortgage fees, stamp duty, valuation and solicitor fees) are higher than renting, you stand to gain more in the long run.
Not only can you save £1,440 a year, but you could also make a tidy profit when you come to sell your home – research by Halifax shows that over the past 10 years, the standard average house price has risen by a whopping 32.4%.
Take a look at our top tips for buying a house here.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.