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Renting encroaching on cheap mortgages

Date: Wed, 22 Jun 2005

The falling cost of renting could be undermining the cheap mortgage market.

A survey from Abbey shows that the average homebuyer will pay £37,650 (11 per cent) less over 25 years than those who rent property, however, last year the saving equalled 16 per cent - £49,797.

Rising property prices and increasing interest rates could be helping to increase renters' long term fortunes.

"Buying a property has become harder for many people in recent years with average property prices doubling since the millennium. Despite this, buying still remains cheaper in the long run compared with renting," said Gary Hockey-Morley, Abbey's director of mortgages.

"Clearly, one of the main attractions for buyers is the freedom that comes from having your own property and the ability to renovate, decorate and personalise your own home as you want."

Mr Hockey-Morley added that the most obvious benefit of owning rather than renting is for investment purposes and means that a homeowner may have more options in the long-term.

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