Tenants are in a better position to weather the current financial storm than homeowners, new analysis from MoneyExpert.com has revealed.
As homeowners come to the end of their fixed-rate mortgage
s they are finding themselves faced with price hikes as they struggle to get decent remortgage deals
. In the last week alone, three major lenders have increased their rates, including Bradford & Bingley and First Direct.
However, mortgage rate hikes are not the only reason for tenants being better off in times of tight credit. According to the research, the average homeowner spends almost £100 more on commodities and services per week than the average tenant. The figures show that homeowners spend an average of £216 a week compared with the average tenant's £133.
And, although mortgage payments
cost significantly more than a tenants rent, spending on other areas was also up for homeowners. For example, a homeowner spends an average of £30 a week on transport compared to a tenants £14.60.
The findings coincide with recent statistics of the cost of living and the Chancellor of the Exchequer struggling to reign in inflation. And things could get worse according to MoneyExpert.com, which commented on how Britain is currently suffering the fastest increase in the cost of fuel and food since the 1970s.
Sean Gardner, director of MoneyExpert.com, said: "Much has been made of the dilapidated mortgage market and the effects of inflation, and it is true that homeowners are likely to suffer a real change in their standard of living as costs rise.
"But tenants are less exposed to these factors – they don't have to remortgage; they won't suffer equity losses as house prices drop; and their capita expenditure on basic commodities is lower than those of home owners, too," he added, before concluding:
"This may explain why the housing market is struggling to recover – people realise that renting is cheaper now and aren't prepared to run the risk of being on the property ladder."
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