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Saving up for a deposit to access a mortgage loan may make more financial sense for Brits in the long run, with new research indicating buying is substantially cheaper than renting.

The average buyer will spend 16 per cent less on mortgage payments and saving for a deposit than if they were renting, according to the Halifax survey.

There has been a significant decline in buying costs over the last two years. In 2008, the monthly costs of owning a home accounted for 47 per cent of disposable income. Last year, this dropped to 29 per cent.

Halifax housing economist Martin Ellis explained that the average cost of owning a home has fallen due to house price declines and lower mortgage rates.

Meanwhile, demand for rented accommodation in the economic downturn has pushed up rents.

"Despite the improvement in relative affordability of buying a home, the number of purchasers has continued to fall due to the ongoing challenges of raising a deposit and the considerable uncertainty over the prospects of the UK economy," he added.