Tenants are now better off than homeowners across half the country and more financial experts are saying rent, and sell your property.
The advantage of buying a home rather than renting for 25 years has tumbled by 75 per cent according to experts at the high-street bank Abbey, and tenants are now better off than homeowners in half the UK's regions – suggesting a rent-and-sell strategy could make sense for many British homeowners.
The idea that a homeowner should rent, and sell any existing properties, has gained credence over the last 12 months. Mortgage payers have been hit by successive interest rate rises, making renting an attractive option, while property values have soared – but are now forecast to fall, making this an ideal time to sell up.
Abbey's expert analysis calculates the cost of home ownership based on someone taking out an average 25-year repayment mortgage and assumes essential home maintenance costs. It also looks at projected rental costs over the same time period.
Rent better in six UK regions
The bank's research, as quoted on financial advice website thisismoney.co.uk, suggested someone choosing to rent (and sell an existing property) in Yorkshire and the Humber, the Midlands, Greater London, the North-West, Wales and Northern Ireland would actually save money if they rented for the full 25 years.
The UK average was that buyers were £5,811 better off than tenants on average, down from an advantage of £24,000 in 2006 and an all-time high of £135,000 in 2001 – which definitely wasn't a good year to rent, and sell your property.
Future trends could strengthen rent-and-sell argument
If current trends continue, people will be far better off to rent, and sell any existing properties, to judge by this survey alone.
Abbey's research did not take into account any future house price inflation, which would benefit homeowners – but neither did it factor in any falls in the house price market, which could make the rent-and-sell argument even stronger, but might see anyone delaying lose out.
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