First-time buyers are saving more than  £800 a year as the gap between buying and renting has stretched by 8 per cent during the pandemic, according to data from Halifax.

Monthly rental costs have risen by 10 per cent to £821  in the past year, while monthly buying costs have only increased by 1 per cent to £753  during the same period, according to the Halifax Buying vs Renting Review.

This difference was only 1 per cent in 2019, which dropped sharply from the previous year, when the monthly difference between buying versus renting was 10 per cent.

The report is based on the housing costs associated with a mortgage on a three-bed home, compared to the average monthly rent of the same property type.

While the average first-time buyer deposit amount has gone up by £11,677  since the start of the pandemic last March to £58,986, and the average mortgage payment has increased, low interest rates have meant mortgage payments have risen less sharply rental payments, the study said.

Halifax mortgages director Andrew Asaam says: “Lockdown restrictions may have held back renters planning to buy a property during the past year with its practical challenges, and while the stamp duty holiday race has helped drive record levels of  mortgage approvals, the cost of renting has crept up in the same period.“

The biggest savings to be are in the capital where homeowners saved 4,822 a year on average.

Homeowners in the South East made the next biggest savings of £2,597 a year, followed by East Anglia at £2,019, and Scotland at £2010, compared to neighbours who rent.

The slimmest gap between buying and renting is in Northern Ireland, where buyers are £397 a year better off, followed by East Midlands at £897, and Yorkshire and the Humber where buyers end up saving £961 a year, compared to those who rent.

Asaam adds: “Raising a deposit is still the biggest challenge for those looking to get on to the property ladder”, adding that “the average first home deposit has gone up by another £11,000 since the start of the pandemic”.

Assam says: “We know that first-time buyers will benefit from steps that make finding a deposit more of a reality and the new  Help to Buy Mortgage Guarantee  scheme could be a gamechanger for those saving hard to take the first step and often paying rent at the same time.”

Over the past decade, average monthly buying costs have increased by 31 per cent, while the cost of renting has gone up by 36 per cent during that time, said the report.

The starkest contrast was when the gap reached 17 per cent in  2015 – £123per month – and the tightest in 2019. This was primarily driven by increased average mortgage payments and the rise in the deposit amount, the study said.