Consumers find it cheaper to buy a house than rent

21-Jun-2005

Potential first time buyers that have previously been forced to rent due to soaring house prices are paying out thousands of pounds more in the long run.

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The report, which has been carried out by high street bank Abbey, shows that buying an average property over a 25 year period now costs £326,849, while renting one would cost people 11 per cent more at £364,499- and the buyer still has the property to show for it.

Although this is encouraging to those wanting to get onto the first rung of the property ladder, the difference between buying and renting a home is now at its lowest since the group first began doing the research ten years ago.

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Soaring house prices mean that the gap between renting and buying is closing; this year's figures can be compared with buying being 16 per cent or £49,797 cheaper than renting in 2004.

The group said a 12.6 per cent rise in house prices combined with a 0.75 per cent jump in interest rates during the period had made it more difficult for potential buyers to get on the first rung of the property ladder, but the situation is improving.

Gary Hockey-Morley, Abbey's director of mortgages, said: "Buying a property has become harder for many people in recent years with average property prices doubling since the millennium. Despite this, buying still remains cheaper in the long run compared with renting."

London remains the most expensive region in which to rent or buy a property, but it is still 4 per cent or £25,100 cheaper to buy a property there than to rent one over a 25 year period.

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