People should buy rather than rent property

It is still cheaper in the long term to get a mortgage and buy a property, rather than rent, a new report has indicated.

Abbey's latest UK Rent Versus Buy Index shows that a person who took out a mortgage and bought a property would save £5,811 over 25 years when compared to someone who rented during the time.

In particular, the report highlighted that people in east Scotland and the north of England would do well to get a mortgage and buy, rather than rent. In these regions, homeowners make savings of 21 and 18 per cent respectively by opting to buy.

However, the report did indicate that the difference in cost between renting and buying was closing, as rising interest rates made mortgages more expensive.

"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," explained Nici Audhlam-Gardiner, head of mortgages at Abbey.

"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 prices rises as the value of their equity increases over time."

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