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Buyers beat renters but margin falls

It is around 30 per cent cheaper on average to buy a home than rent, says Abbey National.

However, compared with Abbey&#39s findings for 2001, the average saving to be made from buying rather than renting over 25 years has reduced from 57 per cent.

It gives the example of buying a two-bedroom flat worth £73,583. Total cost of the purchase with a mortgage based on a interest rate of 6 per cent would be £141,970 while the property would cost £263,785 to rent over 25 years. This makes a saving for the borrower of £121,815 – 46 per cent.

There are regional differences, with the biggest average saving in the North-west of England where the buyer can be £151,500 better off over 25 years by buying.

In comparison, the lowest average saving is in the South-west where the difference between buying and renting is £60,121.

Head of mortgage marketing Bridget Walsh says: “Although we have seen an extremely buoyant market in the last year, our research has once again shown the real benefits of buying as opposed to renting.

“For instance, if you consider the average monthly rent on a UK property is £677, this would get an eligible homebuyer who has a relevant deposit a £125,000 loan at our current 4.25 per cent discounted rate mortgage.”

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