Renting "costs more than a mortgage"

06-Apr-2005

Aspiring homebuyers could save money by getting a foot on the property ladder than renting, a new survey has claimed.

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According to Abbey's annual study into the difference in cost between renting a home and owning a property, homeowners can be as much as 16 per cent better off than aspiring first time buyers still living in rented accommodation.

While finding a deposit can be a major hurdle to aspiring first time buyers, who often prefer to rent well into their 20s while saving up and finding a mortgage that they can afford.

However, based on assumptions about interest and inflation rates in the future, Abbey's research has revealed that over 25 years, it could be almost £50,000 cheaper to buy a house than to rent.

Aspiring first time buyers are therefore being advised to shop around when finding a mortgage for a property, as some can be more effective than saving up while renting.

One option for buyers being touted by those in the industry is for first time buyers to club together and look into the option of joint ownership, finding a mortgage with friends rather than going out on a limb.

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The survey also found that rising house prices have hampered the aspirations of many first time buyers by keeping them off the property ladder, but those that have already got a foothold have been able to benefit from the increasing prices.

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