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Buying more expensive than renting – for now

Tuesday 13th June 2006

For the first time, owning a property over a 25-year period is more expensive than renting in some areas of the country, according to Abbeys annual Rent vs Buy report.

The bank found that while, overall, homeowners are still better off than renters by an average £24,372 (six per cent), house price inflation of four or five per cent over the past year has tipped the balance towards tenants in some parts of the UK, and they are actually getting a better deal.

In Wales for example, private tenants would save £27,416, or eight per cent, on the cost of buying property, while in south-west England they would save £21,009, or five per cent, of the cost of buying.

Indeed previous Abbey Rent vs Buy reports show that the gap between buying and renting has been narrowing each year.

Sue Hayes, director of Abbeys product marketing said: "In the short-term, a private tenant might be up to £1,000 a year better off than someone who had bought a property in areas such as Wales and the south-west.

"However, in the long-term, paying rent is simply lining landlords pockets and tenants wouldnt even have a property to show for it."

In other areas of the country buying a house still remains the most cost effective option, Abbeys report shows.

In the east of Scotland those who buy property save an average £81,157, or 20 per cent, on the cost of renting over a 25-year period, while in the west of Scotland they save £69,779, also 20 per cent, on the cost of renting.


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