A property expert says first-time buyers in Oxfordshire are coming back to the market — but only those with a massive 25 per cent deposit stored away.

A combination of lower interest rates and falling property prices have sparked renewed interest, especially as rents have stayed high, according to Giles Lawton of Oxford-based estate agents Savills.

He said: “We have found, particularly since Christmas, that first-time buyers and those renting who have a reasonable deposit of more than 25 per cent are looking very actively in the market.

“Their money on deposit in the bank is yielding a very low return and their mortgage quotations are less than they expect.

“Rents are relatively high and they are seeing the asking prices of the houses for sale have fallen.”

The news came after it was revealed that people buying a home in Oxford are better off than renting.

A report by website Property finder.com showed those buying a two-bedroomed house in the city will find they are £49 a month better off, on average, than those renting a similar property.

In South Oxfordshire, the difference is far higher, at £177, while the Vale of White Horse is £14 cheaper. Renting is cheaper in the Cherwell area by £102 and in West Oxfordshire by £6.

Frank Webster, of rental specialists Finders Keepers, which has branches across the county, said: “The survey does not represent the true cost of buying, and could be misleading to consumers.

“Comparing an interest only mortgage, which is not the best long term mortgage option for first-time buyers, with rents without factoring in expenses such as repairs, block management charges for leasehold apartments and insurance — all costs that homeowners have to pay — artificially skews the figures.

“In a rental property, if the boiler breaks down and has to be replaced the £2,500 plus bill goes to the landlord, not the tenant.

“Buying and renting complement each other.

“Many of our tenants are looking to buy, later this year or next year taking advantage of more realistic prices, providing the banks start lending.

“In the meantime, renting provides the temporary certainty that for six or 12 months only it is the rent and bills they have to pay.

“At the end of that tenancy you can walk away without any more commitment.

“With people facing job insecurity, renting allows them to be more flexible and mobile in the job market without the mortgage noose around their neck.”

The survey analysed sales prices and rents of 110,000 two-bedroomed properties currently on the market in the UK.

The average purchase price of a property in the county is £226,147, according to the latest Land Registry figures.

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