Listen up, renters: if you are yet to own your own home, did you know you could be saving over £1,000 a year? According to Zoopla, owning your own home is a far better financial option than renting and that’s without even taking into account possible rises in value.
Zoopla reckons that renting a home is now less expensive in only six of the country’s 50 largest cities and towns.
The property website has estimated that people who have rented a two-bedroom flat pay an average of £8,258 a year. This is £1,098 more than the price of servicing a 5% interest-only mortgage loan on a similar property, currently valued at £7,160.
Buying a home is most cost-effective in Reading, where renting costs 34% more than having your own home. Other cities where people are better off buying than renting are York, Peterborough, Aberdeen and Hull, The Independent reports. At the other end of the table is Swansea, where people spend 11% less on renting than owning a home. In London, renting also seems to be more advantageous than buying, since it’s 9.5% cheaper. Bournemouth, Bedford and Middlesbrough complete the list of the top five locations where renting beats buying.
Despite the recovery of the country’s first-time buyer market in the past year, demand for rental property is still high, Zoopla’s Lawrence Hall said. People who want to have their own home are biding their time, fuelling demand in the private rented sector and pushing rents up as a result. But still, buying is the wiser and the most cost-effective option, especially in the northern parts of the country where home values are more affordable and increasing at a slower pace than in the south, Hall added.
If you’re a home owner, have you noticed any significant savings since your renting days?