Halifax has run its annual review on buying versus renting and has found that those who buy a home save around £132 per month for choosing to buy instead of renting. The review took a close look at the costs of purchasing a three bedroom home versus the costs of renting the same property in various regions of the UK.
It found that with the average home valued at about £157,000, in almost all cases buying actually saved families about 20% every month making it the cheaper option even if it does not appear to be upfront. Overall, the survey found that the average savings adds up to be about £132 per month which is the largest difference that has been found since Halifax first started conducting the review in 2008.
The average cost for renting a three bedroom home was found to be about £732 while the average mortgage was about £600 per month. This difference can account to £1500 of savings per year which is almost a full month’s salary for the average worker in the UK. Therefore, the extra cash is substantial enough to make families that are renting stand up and take note.
The review also found that many renters are just paying money to a landlord without accounting for repairs or services meaning that they are only paying for the roof over their heads, just like a mortgage payment would.
Homeowners that are able to get cheaper mortgages are oftentimes reducing the debt on their home so that they can pass it onto their children as an inheritance or use it later in life to help fund their retirement plans. Either way, owning a home also allows for financial security in the later years and will prove to be an investment unlike renting where nothing is gained long term.