Buying a home 'still cheaper than renting'
News Category: Industry News
Published: 14-Nov-2007
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Buying a home is still cheaper than renting, although only by a nose.
That's the conclusion of the UK Rent Versus Buy Index from Abbey, which found that the savings made by homeowners on a 25-year fixed-rate mortgage compared to renters was getting smaller.
The figure this year was £5,811, down by 76 per cent from the £24,000 figure recorded last year.
Abbey's head of mortgages, Nici Audhlam-Gardiner 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."
He added that mortgage lenders ought to develop new ways of people to be able to own their own home.
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