According to results from the latest UK rent versus buy index from Abbey, rising house prices and Base Rates mean that £5,000 could be saved by buying as opposed to renting over a 25-year period.
One year ago the difference was over £24,000, indicating that the difference had dropped by 76 per cent in 12 months. The research surveyed the average cost to a buyer who has a mortgage for 25 years compared to a person renting across the UK and found that the average cost of renting was £443,736, while to buy a home over the same period was £437,925 – a saving of £5,811, or 1.3 per cent. Last year the results showed that home owners were better off than renters by an average of 6 per cent.
Nici Audhlam-Gardiner, head of mortgages at Abbey, said: “While on a month-to-month basis in some areas it is cheaper to rent rather than buy, at the end of the 25 years a home owner actually has a house whereas a renter has nothing. In addition, home owners benefit from any further house price rises as the value of their equity increases over time.”
Kevin Paterson, group marketing director at the Enterprise Group, said: “This is interesting but doesn’t really serve a purpose as people want to own their own home.”
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