The Cost Of Buying vs. Owning A Property In The UK

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The cost of buying vs owning a property – Homeowners facing costs of £18,000 a year as annual increase outstrips the cost of buying

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The Rise In Homeownership Cost

House prices are on the up but the latest research by the estate agent comparison site, GetAgent.co.uk, has found that the issue of affordability isn’t just increasing when it comes to purchasing a property, the cost of homeownership itself has also climbed and by a greater margin.

GetAgent first analysed the cost of buying in the current market based on the cost of stamp duty, the average mortgage deposit at 15% of a property’s value, the average valuation and surveys costs and the average conveyancing fee of £860.

The research shows that based on the current average house price of £284,029, homebuyers in England are facing an average cost of buying totalling £46,366. This is 9.9% higher than just a year ago - an increase of £4,158.

The North West has seen the largest increase in the cost of buying in the last year at 13.6%, although the North East (13.4%), Yorkshire and the Humber (11.1%) and South West (10.5%) have also seen a notable increase.

GetAgent then analysed the annual cost of homeownership once the initial hurdle of a purchase has been achieved based on the average mortgage repayment, the cost of council tax, the average energy bill, the cost of water and sewage and a maintenance budget at 1% of a property’s value.

The figures show that the cost of owning a property currently sits at an average of £18,203 per year. This has increased by £1,836 since last year and so while the cost of owning a home may be lower than the initial cost of buying, it has seen a larger annual jump at 11.2%.

This cost has increased the most in Yorkshire and the Humber, where owning a home is now 17.3% more expensive than it was a year ago. The North West has also seen one of the largest increases at 14.8%, as has the West Midlands (12.2%), South West (12.2%) and East Midlands (11.4%).

Booming House Prices

Founder and CEO of GetAgent.co.uk, Colby Short, commented:

“We all know how hard it is to secure that first foot on the property ladder. With  as a result of the Stamp Duty holiday, this task is now even more difficult, with an increase of nearly £4200 pounds from last year.

However, what we often fail to consider when buying a new home is the ongoing costs of actually owning one. While mortgage rates are currently favourable, an increase is inevitable. Many will face far higher monthly repayments if they aren’t benefiting from a fixed rate.

Then there’s the increasing costs of council tax and utilities, as well as the money required to maintain a home. The sum of these factors equate to a pretty hefty cost of more than £18,000 a year on the average home. That’s an increase of nearly £2000 in the last year alone.”

The Cost Of BUYING A Property

Location AveHP - June 2020 Cost of buying - June 2020 AveHP - June 2021 Cost of buying - June 2021 change (£) Change (%)
England £250,739 £42,208 £284,029 £46,366 £4,158 9.9%
North West £168,769 £28,251 £200,222 £32,093 £3,842 13.6%
North East £129,666 £21,603 £149,521 £24,488 £2,885 13.4%
Yorkshire and The Humber £167,941 £28,110 £194,518 £31,238 £3,128 11.1%
South West £259,382 £43,936 £294,906 £48,541 £4,605 10.5%
East of England £291,772 £50,414 £327,017 £54,963 £4,549 9.0%
West Midlands Region £201,330 £33,786 £231,429 £36,774 £2,988 8.8%
East Midlands £198,494 £33,304 £226,846 £36,087 £2,783 8.4%
South East £322,024 £56,465 £355,948 £60,750 £4,285 7.6%
London £479,969 £88,054 £510,299 £91,620 £3,566 4.0%

Cost of buying based on the cost of stamp duty (Gov.uk), average mortgage deposit (BSA), valuation survey fee (Which) and conveyancing fee (Which) applied to the average house price (Gov.uk) in each region at each point in time

The Cost Of OWNING A Property

Location AveHP - June 2020 Cost of ownership - June 2020 AveHP - June 2021 Cost of ownership - June 2021 Change (£) Change (%)
England £250,739 £16,367 £284,029 £18,203 £1,836 11.2%
Yorkshire and The Humber £167,941 £11,407 £194,518 £13,382 £1,975 17.3%
North West £168,769 £11,351 £200,222 £13,027 £1,676 14.8%
West Midlands Region £201,330 £12,814 £231,429 £14,381 £1,567 12.2%
South West £259,382 £15,907 £294,906 £17,768 £1,861 11.7%
East Midlands £198,494 £12,372 £226,846 £13,786 £1,414 11.4%
North East £129,666 £9,999 £149,521 £11,128 £1,129 11.3%
East of England £291,772 £17,201 £327,017 £18,995 £1,795 10.4%