Renters spend £1 million more over a lifetime than homeowners

Wednesday, 20th June 2018, 9:45 am
Updated Wednesday, 20th June 2018, 11:00 am

Renting for a lifetime costs around £1 million more than purchasing your own home, according to research by housebuilder Strata.Research that compares the cost of owning a home in the UK to average monthly rental payments over a 60-year period, proves that buying is significantly cheaper over the course of a lifetime.According to the Land Registry, the average first time buyer house costs £212,079, with a 16 per cent deposit. With an estimated £4,800 of purchase fees, and assuming buyers rent for an initial nine-year period, they will spend around £430,000.Meanwhile, lifetime renters will spend £909 a month on average on a home, which when adjusted for inflation, would reach a total of £1.6 million over a 60-year period.That equates to a difference of over £1.1 million, with lifetime renters spending 280 per cent more.Figures across the UK vary dramatically, with differences in London reaching almost £2 million while the North East is at the lowest end of the scale with a variance of just over £720,000.Lifetime renters in the North West will suffer the greatest indifference, spending 314 per cent more than buyers in the same region.The data was collected based on the assumptions that rental costs begin post university at the age of 21 and continue until the age of 81 – the average life expectancy for the UK.Buyer figures are based on renting from the age of 21 until 30 – the average age of someone in the UK buying their first home, and then obtaining a 25-year mortgage on a property worth just over £200,000.The purchase figures also consider the outright costs incurred when buying, such as lender’s valuations, structural surveys and solicitor’s fees.Buying a home in today’s market may seems like an almost impossible task for many first-time buyers, with the average price of a house sold in Sheffield around £187,000. However, it seems there are still some bargains to be had.Average rents across the UK rose by 2.0 per cent in May 2018 when compared to May 2017; the average monthly rent is now £919.