Homeowners better off than renters by 6%

Abbeys annual Rent vs Buy report shows that homeowners are still better off than renters by an average 24,372, 6%.

However, for the first time, the cost of owning a property over a 25-year period is higher than renting in some areas of the country.

The biggest savings for buyers can be found in east Scotland, with a saving of 81,157, 20%, and west Scotland with a saving of 69,779, 20%.

The biggest savings for private tenants can be found in Wales, 27,416, 8%, and the south west, 21,009, 5%.

However, this does not take into account the fact that people who have bought will own a mortgage-free property at the end of their mortgage term.

Previous Abbey Rent vs Buy reports show that the gap between buying and renting has been narrowing each year.

House price inflation of 4 or 5% over the past year has tipped the balance towards tenants, but homeowners still have the advantage in the end as a homeowner will own the property outright at the end of a mortgage term.

Abbeys report showed that the average cost of buying a property over 25 years is 379,341 compared with 403,713 for renting.

The average saving, 24,372 is approximately equivalent to an average years salary.

The most expensive area to buy is Greater London and the most expensive area to rent is the south east, narrowly beating Greater London.

The cheapest area to buy is west Scotland and the cheapest area to rent is Northern Ireland.

The biggest savings for homeowners are in east and west Scotland, where homeowners are 20% better off than renting.

Sue Hayes, director of Abbeys product marketing, says: In the short term, a private tenant might be up to 1000 a year better off than someone who had bought a property in areas such as Wales and the south west.

However, in the long term, paying rent is simply lining landlords pockets and tenants wouldnt even have a property to show for it.

Aspirations for home-ownership in the UK remain high, which is why mortgage lenders must take a flexible view to affordability.”