FIRST-TIME buyers in Scotland are more than £850 a year better off than people who rent properties as low interest rates continue to make life more affordable for property owners.

The average monthly cost of the purchase of a typical three- bedroom house, including mortgage costs, was £522 in the final month of last year., the bank’s Buying Versus Renting Review says. The figure is £71 lower than the typical monthly rent of £593 on the same property type.

This 12 per cent difference is the largest across the country, compared to the UK average difference of seven per cent as rents continue to rise while affordable mortgage deals remain on the market due to the continued record low Bank of England rates of 0.25 per cent.

The figures are contained in latest analysis of both markets by the Bank of Scotland.

Graham Blair, mortgage director at the Bank of Scotland, said: “This is the eighth year in a row that first-time buyers in Scotland are better off buying a property rather than renting.

“Over this period of time, buying costs haven’t fluctuated much, resulting in the annual saving increasing from £458 to £860.

“While it is also the more financially attractive option across the UK to buy rather than rent, it’s more affordable in Scotland.

“Buying here is 12 per cent cheaper than renting, compared to the UK’s seven per cent cheaper.”

However, the bank’s research had good news for renters as it found the gap between buying and renting north of the Border narrowed by £49 per month at the end of last year. In December 2015, the monthly cost for buyers was £121 lower than renting.

The bank said buying a house is more affordable than renting in all 12 UK regions it has delineated, with the difference being the biggest in Scotland. The bank said the size of a deposit required to buy a house for the first time is often a “substantial hurdle to overcome” for most first-time buyers.

The average deposit put down for a three-bedroom first-buyer home in Scotland is £21,297. In London, by contrast, the average deposit is £110,927, the highest.

This compares to deposits in Northern Ireland averaging for the same property at £15,830 or the £51,082 in the south-east of England. The figures also showed that the number of first-time buyers in Scotland reached 23,000 in 2016, staying above the 20,000 mark for the third year in succession. First-time home buyers getting on to the first rung of the property ladder have grown by 87 per cent since 2009 to its current level.

However, first-time buyer numbers still remain 21 per cent below the immediate pre-economic crisis peak. First-time buyers accounted for 49 per cent of all house purchases made with a mortgage in 2016. This share has grown from 35 per cent at the start of the housing downturn in 2007.Mr Blair added: “The size of deposit that is often required can represent a substantial hurdle to overcome.”

He said saving for a deposit was an important part of the planning for people trying to get onto the housing ladder.

Howver, before realising the potential financial advantages of home ownership.

“Whilst deposits can raise the upfront cost of buying, it is also an important form of long-term savings for homeowners and, coupled with rising prices, it contributes towards higher housing wealth.”

The costs for first-time buyers in Scotland, the bank said, have been cheaper than renting since 2009.

The average monthly rental payments have increased by only £30 since December 2008.

However, buying a property has changed from being £184 more expensive each month to being £38 cheaper.