Research Shows Renters Spend £1.1m More Than Buyers
According to recent research, renters spend an incredible £1.1m more than buyers in their lifetime. What’s more, of the 17 million people who are currently renting property in the UK, over two thirds have no plans or the capacity to buy a property in their lifetime.
Affordability is a huge issue here in the UK and at present the UK is ahead of only Austria, Denmark and Germany in terms of the proportion of owner-occupier homes in Europe.
In 2017 the average price paid by a first-time buyer was £207,693 – this is 50% higher than in 2017 when the same property would cost on average £138,663. That’s an increase of £1,150 every month.
Direct Line found that 20% of those surveyed didn’t want the financial commitment that comes with owning a property, 20% don’t want the hassle of maintaining a property and just under 20% don’t want to be tied down to one area.
Scotland currently has the highest proportion of renters – with almost 50% currently renting and for many people the cons are rapidly outweighing the pros.
There seems to have been a shift in attitudes towards renting and as a result many people are comfortable with the flexibility that comes with renting rather than owning.
In addition, recent legislative changes mean that landlords have more of a responsibility to ensure the welfare of their tenants with more stringent guidelines to follow.
However, renting for your lifetime will cost you £1m more than owning your own home according to new home builder Strata. The research compares the cost of owning a home in the UK to average monthly rental payments over 60 years, and shows that purchasing is significantly cheaper over the course of a lifetime.
In fact, according to the Land Registry, the average first time buyer spends £212,079 on a new home with a 16% deposit. Purchase fees are £7,900. Over the course of an initial 9 -year period renters will spend £432,000 – factor bills and the figure is much higher.
However, it’s worth noting that it’s difficult to work out the average increase in mortgage costs as many people will upsize, downsize or even experience rate rises making their repayments more expensive than their initial deal. In addition, figures will change dramatically across the UK. For example, in London the cost of renting will be much higher than here in Scotland.
If you would like to purchase your own property but feel it could be out of reach, talk to us at Urban Union. You can reserve a property at Muirton Living for just £99 and prices start at £105,000. What’s more, Help to Buy is available we we are offering a free flooring incentive.