According to a new report from Abbey Mortgages, First-time buyers could be better off buying a property than renting.

According to the report 1.61 million people said they were looking to buy in areas other than London. With average monthly rent coming in £434 for these regions, and average mortgage payments on a property with a 25% deposit coming in at £382, anyone buying could see themselves making a £52 saving each month.

New research has revealed that buying a house is cheaper than renting in every region in the country apart from the capital, where renting is still a cheaper option.

The report suggests that renters outside the capital could save a collective £1bn over the next 12 months if they bought a property now, rather than spending their money on renting – appealing if you can afford the deposit.

Savings made by buying a property differ around the country, with buyers in Wales set to save £90.91 a month, while those in the North West would save £87.43 and renters in Yorkshire & Humberside could save £77.06 if they bought. The opposite can be said of people looking to buy in London, who would see £466.19 added to their outgoings a month.

While typical first-time buyer flats and terraced houses have seen a decrease in value of 9% over the past 12 months, according to Abbey Mortgages, mortgage lending has become tighter, and first-time buyers still need to find huge deposits in order to secure the best mortgage deals.

But with huge deposits needed to secure a mortgage, is it really that easy for first-timers to get their foot on the first rung of the property ladder?

According to Abbey, the average price for a typical first-time buyer property outside of London is £92,861. With most lenders requiring at least a 25% deposit, borrowers would need to stump up a whopping £23,215 to reap the rewards of buying – a sum many first-time buyers would struggle to find.

“Our latest research shows there is hope for first-time buyers. It’s now cheaper in all bar one of the regions to buy rather than rent, [which] shows that saving for that all important deposit is so worthwhile,” says director of Abbey Mortgages, Nici Audhlam-Gardiner.

With recent house price reports revealing that property prices are starting to rise again, the end of the stamp duty holiday in sight, and a lack of affordable mortgages available for first-time buyers, it may be time to look at alternatives.

Buy with friends
This could be the answer, if you can’t afford to buy on your own, buy with friends. You’ll be able to borrow more and buy a better property. But, while buying with friends provides a great opportunity to get on the property ladder, there are important factors to consider.

Generally when people become co-owners of a property they opt to be what is known as “tenants in common”. This means that each person has shares in the property. Such an agreement should take into consideration how much money each person has put into the property – both in terms of deposit and how much they pay off the mortgage each month.

Everyone is jointly responsible for the whole mortgage, so each person needs to make sure that if anything happens in their lives – such as long-term illness or job loss – they have a back-up plan to ensure their share of the mortgage is paid. There are insurance policies that can help with this.

It’s worth considering drawing up a legal agreement before the purchase is complete to cover all eventualities, such as if someone decides to move out or falls on hard times.

Buying off-plan
You can usually bag a discount if you decide to buy off-plan. Developers often sell part of their development before the building work is complete, to generate sales in order to complete the rest of the development.

If you buy off-plan you could be looking at as much as a 20% discount on the asking price. You’re basically agreeing to buy a property on the basis of plans, drawings and virtual tours, which may sound risky, but it’s common practice with many larger property developers.

Generally you’ll be asked for a down-payment of between £500 and £1,000 to reserve the plot. Exchange is usually 28 days later when you need to provide a 5-10% deposit, and then final payment will be on completion of the build – usually six to 18 months later, so there’s plenty of time to sort out your mortgage.

Bank of mum and dad
The Council of Mortgage Lenders (CML) put the average first-time buyer house price at £123,000 in July 2009. Raising a deposit is the biggest obstacle when it comes to buying a first home.

The minimum deposit required for a property costing this much would be at least 10% (£12,300) or up to 25% (£30,750) to obtain some of the best rates. So it comes as no surprise that some First Time Buyers, revealed that they would be turning to the “bank of Mum and Dad” to help finance their deposit.

Other ways parents can help out with the purchase of a property is by acting as a guarantor to the mortgage company, or even entering into a joint mortgage. It’s worth taking advice on any of these suggestions as there are tax implications.

Shared ownership
In essence participants of the scheme buy a share of a property through a mortgage and pay for the rest through a capped-rate rent paid to a housing association. The size of the share varies but usually starts at 25%. Obviously the higher the share, the less rent there is to pay. The plan is that over time, you incrementally increase your share (known as “staircasing”) until you – and your mortgage provider – own the property outright.

Homebuy Direct is the latest scheme to be launched where buyers are offered an equity loan of up to 30% of the purchase price, co-funded by the Government and the developer. HomeBuy Direct is aimed at first-time buyers where households earn less than £60,000 per year.  

To apply for a scheme, find out if whether you are eligible to buy a shared-ownership property, or to seek further information visit Homebuy.org.uk.