Although buying a home is cheaper than renting, especially the South East, some potential first-time buyers are holding off from getting on the property ladder.

According to Halifax, falling house prices and rock bottom interest rates ensured that the average monthly costs associated with buying a three-bedroom house in the UK in March was £608 - about £98 lower than the average monthly rent paid on the same property type of £706.

Three years ago, the average cost of buying was 43 per cent more than the typical rent paid on the same property.

The significant fall in the monthly cost associated with buying compared to renting has been driven by the decline in the average mortgage rate since 2008.

The mortgage rate for a new borrower has fallen to an average 3.59 per cent, against 5.82 per cent in March 2008, cutting monthly mortgage payments by 39 per cent.

Suren Thiru, of Halifax, said: "As such, the fall in the cost of buying a property compared to average rents has been significant. The marked decline in mortgage costs has improved affordability for those able to enter the market, and eased the pressure on existing homeowners' disposable income.

"Although the current trade-off between buying and renting is expected to narrow when rates rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure many will still prefer to buy."