It's often drilled into us that home ownership is the most sensible, stable and spending savvy property aspiration to have. But now the findings of new research could slowly be turning this idea on its head, revealing that remaining a tenant for life could actually pay in the property stakes.
The real cost of home ownership?: How much?! First-time buyers will need this staggering sum to buy a home in years to come
Speaking to 2,000 UK homeowners and rental tenants and analysing monthly housing expenses data from the Office of National Statistics, the research from Ocean Finance revealed that the cost of home maintenance, decoration and buildings insurance and more mean that homeowners are actually footing a larger property bill over a lifetime when compared to tenants.
Comparing the cost of renting over 25 years and the cost of homeownership over 25 years, they found that those with a mortgage could end up paying an average of £77,241.61 more than renters over this term.
Looking at the biggest percentage savings made by tenants the following five areas topped the ranking:
(Below figures show the cost of renting versus the cost of owning a home)
Commenting on the findings Ian Williams, Director of Communications at Ocean Finance, said:
'With the financial gap between renting and buying becoming closer than ever in terms of monthly payments, and ‘Generation Rent’ seemingly further away from entering the property market than ever before, many are facing a difficult decision when it comes to financial planning for their housing future.
'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.'
'What is clear from the research is that more care and attention is needed before entering into a mortgage agreement,' Ian adds. 'And to better plan for unexpected costs and minimise the chance of regretting your financial obligations to a single property.'
Examining some of the costs that prove the biggest financial burden faced by homeowners – aside from the cost of a mortgage itself – the research found that average UK homeowner will spend £2,805.83 on buildings insurance over 25 years, as well as a further £9,500 on maintenance costs outside of insurance cover.
The average homeowner will dip into their savings to the tune of £1,068.43 on annual basis in a bid to refresh their home decor. 75 per cent of those questioned also revealed that they have suffered at least one major house maintenance issue each year and have forked out an average of £380 in order to remedy it.
While the above expenditure will definitely ring true for many homeowners, there's also no denying that there are numerous pay offs for making the transition from tenant to homeowner.
These include – but aren't limited to – not having to deal with the upheaval or short tenancy agreements, being able to make extensive interior changes to your property and taking ownership of repairs rather than chasing landlords/estate agents to complete them.
Moving on?: 10 things you can do to guarantee a quick house sale – and beat a flagging property market!
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