Owning a house with a mortgage costs homeowners £77,000 more than renting over a 25-year mortgage period
New analysis of official government data suggests that owning a home is significantly more expensive than renting.
The research was conducted by lenders Ocean Finance, who analysed monthly housing expenses data from the Office for National Statistics and surveyed 2,000 homeowners and tenants in the UK.
They found that homeowners with a mortgage spend on average £77,242 more than renters over the course of 25 years, meaning tenants pay approximately 43% less on housing costs.
Ocean Finance noted that the savings from tenants come from the additional costs associated with homeownership that go beyond those such as deposits, solicitor fees, and surveys.
This include the costs accumulated throughout the duration of the mortgage. For example, homeowners spend £9,500 on average maintaining the property, £2,806 on buildings insurance, and £1,068 on decorating their home.
This is despite the fact that tenants move property more often than homeowners – approximately once every 2 years compared to once every 10 years for those that own their home – with the costs of moving having little impact on the money saved by renting.
Tenants also save substantially by not having to pay for the maintenance and buildings insurance of their rental home, which are both covered by their landlord.
Additionally, Ocean Finance found that 10% of new homeowners regretted their purchase and entering a mortgage because of the spiralling costs of maintenance.
Younger homeowners are more likely to do so, with 35% of 18 to 34-year olds regretting their decision to buy their home rather than rent.
Ian Williams, Director of Communications at Ocean Finance, noted that “While there are hefty savings to be made by staying in a rental agreement rather than stepping onto the property ladder, the money saved would need to be invested wisely to match the equity gained on a mortgage over 25 years.”
According to Halifax, mortgage affordability has improved since 2009.