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.