A report by Abbey shows that the savings made over 25 years by owning rather than renting a house has fallen a massive 75%. Last year's report showed the calculation as having a saving of £24,000 over the term, whereas this year's has reduced that saving to just £5,811, or little over £230 per year.
The report presumes the buyer to be taking out a standard rate mortgage for 90% of the property value and includes maintenance of the property.
This example gave an average cost over the 25 years of £437,925 against £443,736 for renting the same property. The report did not take into account and house price changes, which over the long term may help house buyers to make further profits.
The other benefit is that after 25 years the home owner will own the property outright and have only maintenance to pay, whereas the renter still continues to pay rent.
Is it better to rent or buy?
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