Gap between renting and buying narrowing
23 April 2003
The difference in cost between renting and buying property is narrowing, according to the Abbey National.
The building society's annual report shows that, regardless of the house price boom in recent years, it still remains cheaper to buy rather than to rent.
Over 25 years the Abbey National estimates that a saving of £80,250 can be made by opting to buy a house.
However, the report also states that the saving to be made by buying rather than renting has reduced over the last year from 30 per cent to 24 per cent, largely due to high increases in house prices.
Percentage savings between renting and buying also vary depending on the type of property chosen. For example buying an average two bedroom flat can save homeowners 33 per cent, while a four bedroom detached house will save buyers just 13 per cent.
In west Scotland the average saving in cash terms is over £147,902, a whopping 47 per cent saving over 25 years.
However, in the southwest the average saving is just five per cent between renting and buying, due to the much greater jump in house prices there.
Guy Aldwinckle, Head of Mortgage Marketing, Abbey National commented, 'What's clear from this research is that homebuyers are still saving considerable sums of money in the long term when compared with renting.'
He added, 'There are still very few areas where there's not much difference between renting and buying in the long term.'
'Even though house prices have continued to rise, mortgage rates are at their lowest for over 40 years, meaning there are some really good mortgage deals available to help make it easier for buyers to buy their first home.'