The cost of buying a home for first-time buyers is now more than £100 a month lower than renting, according to latest figures from Halifax.

It isn't all good news for would-be home owners, though, as the figures also show that many young people are being thwarted from buying as the average deposit in July was £27,127, equivalent to 20% of the average property price.

However, the average deposit required in July 2008 was £28,751, so things have got a little easier in the last three years.

Based on average monthly running costs associated with living in a two-bedroom flat, Halifax says a first-time buyer could expect to pay £567 on a mortgage - and £677 to rent it.

That's a gap of £110 in favour of the buyer, and follows the fall in the average mortgage rate to a current 3.84%.

By contrast, in summer 2008, the average cost of buying was in fact 29% (£212) more than the average rent paid, and the average mortgage rate was 5.91%.

Homes have also got significantly cheaper since mid-2008, with the average house price down 14% to £124,378.

Because of the need for such large deposits, the number of first-time buyers has actually plunged since 2008; there were just 84,000 in the first half of this year, some 23% fewer than in the same period in 2008.

Halifax says the cost of buying would be broadly in line with the cost of renting if the Bank of England base rate rose by 1.5% above its current historic low of 0.5%. This would put average monthly mortgage costs at £681, slightly above average rents.

Halifax housing economist Suren Thiru said: "The recent decline in the cost of buying for first-time buyers compared to renting has been substantial and reflects the drop in both mortgage rates and house prices since 2008, as well as a marked increase in average rent paid over the past year.

"However, while these affordability gains are welcome, conditions in the housing market for those looking to get onto the property ladder remain challenging.

"Difficulties in raising a deposit and current economic uncertainty are likely to mean that a number of first-time buyers entering the market will remain subdued in the near term."

Stuart Law, chief executive of property investment firm Assetz, added: "An improvement in affordability is good news for first-time buyers, with lower house prices and mortgage repayments making home ownership more accessible for those who are able to raise a deposit."