14 Nov

Renting and buying cost gap narrows

Renting and buying cost gap narrows

Buying a home remains a cheaper option than renting, but the gap between them has narrowed, new research shows.

According to figures from Abbey, the cost of buying a home over a 25-year period is £437,952.

This compares with a cost of £437,736 for renting - a difference of £5,811.

Last year, Abbey said, buying a property was £24,000 cheaper - representing a significant narrowing of the gap.

Abbey attributed the trend to rising interest rates and house prices, which are pushing up the cost of buying.

However, because buyers are left with an asset after 25 years, paying a mortage remains the wisest option financially, Nici Audhlam-Gardiner, head of mortgages at Abbey, said.

"A number of factors have come together to cause rent over 25 years and a mortgage for the same period to converge across the UK. But while on a month-to-month basis in some areas it is cheaper to rent rather than buy, at the end of the 25 years a homeowner actually has a house whereas a renter has nothing,

"In addition, homeowners benefit from any further house price rises as the value of their equity increases over time."

She added: "So despite the convergence, we believe that people are still better off owning a property."


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