The dramatic fall in mortgage rates that the UK has experienced over the last three years means that it is now cheaper to buy a home than it is to rent, according to research from Britain's biggest lender, Halifax.

The Telgraph reported that an average three bedroom home costs £608 per month in mortgage payments compared to £709 in rent.

This is compared to March 2008, when it cost £1060 to pay the mortgage and just £761 to rent.

Mortgage rates have, in fact, fallen by over 2 per cent of the value of the home since 2008, from 5.82 per cent to 3.59 per cent today.

Susen Thiru, housing economist at Halifax, said: "Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing homeowners' disposable income.

"Although the current trade-off between buying and renting is expected to narrow when interest rates start to narrow again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many."

Yet despite the low mortgage rates, high-street lenders continue to impose rigid and strict lending criteria, which may be linked, in part to a higher rate of national unemployment.

And it seems that this strict lending criteria is getting worse, with Halifax, RBS and Coventry Building Society all placing new 'criteria' on their interest-only mortgages.