Buying a property is almost £200,000 cheaper than renting over the course of a lifetime, a new study has revealed.
A further £100,000 can be accounted for in certain circumstances too. Frustrated renters will not be pleased to know that paying a mortgage and home running costs are significantly cheaper than renting over a lifetime.
Research from Barclaycard shows that over 50 years, maintaining a home and making mortgage repayments amounts to £429,000, compared to £623,000 spent on renting over the same period.
Making steps on the housing ladder has become increasingly difficult for a number of renters who have been forced to remain in the private rented sector since the housing market crash of 2008.
The high cost of living, combined with soaring rental rates and the demand for high deposits, has left potential homeowners trapped and unable to make a move.
“The cost of stepping on or moving up the housing ladder can be a big barrier for many, but the long term benefits hugely exceed the initial expense,” said Andy Gray, head of mortgages at Barclays.
“Not only will you save money by becoming an owner-occupier, but you will also own a substantial asset once your mortgage is paid off, providing financial security for your old age.”
The average mortgage lasts for 25 years and by the end of this term the homeowner owns the property outright. As this is not the case for renting, it pushes up the price dramatically.
“Those who choose to rent permanently will have to pay their landlord out of their pension income, while owner-occupiers will enjoy minimal housing costs,” added Mr Gray.
Renters in London could save £396,049 over 50 years if they purchased a home, compared to those in the South West where renters could only save £38,632 in comparison.
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