View more on these topics

Homeowners better off than renters, says Abbey

Homeowners are 6% financially better off than renters, reveals Abbeys annual rent vs buy report.

Although homeowners are on average 24,372 better off then renter, 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 and west Scotland – 81,157 and 69,779 respectively – whereas the biggest savings for private tenants can be found in Wales and the South West – 27,416 and 21,009 respectively.

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 of 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.

In comparison, 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 1,000 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.

First-time buyers might find it difficult to get on the property ladder, but they are better off in the market than out.


B&B launches first-time buyers product for professionals

Bradford & Bingley is returning to the lending market for the first time in five years with a new mortgage aimed at the first-time buyer market.The Professional FTB mortgage is aimed at young professionals who are looking to buy their first home but are still under a training contract and studying to pass their professional […]

M-Next shared ownership deal

Mortgage Next has launched a shared ownership discount mortgage funded by Ipswich. The deal is available via members of the Mortgage Next Network and directly authorised brokers registered with Mortgage Next Partners. It consists of a discount of 0.75% off the standard variable rate for three years from completion.

Prudential welcomes Norwich Unions equity release product

Jan Holt, head of sales for Prudential Lifetime Mortgage says Norwich Unions new Equity Release product will benefit the long term prospects for the market.Holt says: Prudential have been saying for some time that the Lifetime Mortgage market needs more providers to be flexible and innovative with their product offerings in order to drive the […]

Investors beware of falling currencies, warns Assetz

Investors buying property overseas should take heed of recent currency exchange rate swings in the United States and Turkey, warns Assetz, and recognise the value of using overseas mortgages. In the United States the value of the US dollar has fallen from $1.75 in April to $1.88 to 1 Sterling, which equates to about a […]


News and expert analysis straight to your inbox

Sign up