Buying a cheaper option for many
The Abbey Rent vs. Buy Report revealed the average cost of buying a property is £379,341, over 25 years, while renting the property would cost in excess of £403,000.
It also revealed the most expensive place to buy was in Greater London, while the most expensive place to rent was the South East. At the other end of the scale, West Scotland was the cheapest area to buy, while Northern Ireland was the least expensive area to rent.
Commenting on the results, Sue Hayes, director of Abbey’s product marketing, said: “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 wouldn’t even have a property to show for it.”
The results showed people in East Scotland could save over £80,000 by buying rather than renting, but indicated buyers should save up as big a deposit as possible to get the best start. It revealed 90 per cent of first-time buyers intended to save for a deposit, but were being held back by low salaries and card and loan repayments.
Responding to the findings, Harry Katz, principal at Norwest Consultants, commented: “On the face of it, it is often true that the rental cost is often dearer than the cost of a mortgage repayment for an equivalent property. However, those who choose to rent often have difficulty raising a sufficient deposit, or their credit rating may not be good. This then disadvantages them as far as interest rates are concerned.”