Buying is best

Posted: 15 Nov 2007 10:53:43 GMT

New research suggests that Britons are better off financially over a 25-year period if they buy rather than rent a home.

New research suggests that Britons are better off financially over a 25-year period if they buy rather than rent a home.

Abbey has published its UK Rent Versus Buy Index, which shows that homeowner will benefit to the tune of £5,811.

However, the gap between buyers and renters is closing, with the same index showing a gap of £24,000 just 12 months ago.

Rising house prices and high interest rates are being blamed for the narrowing gap but Abbey says that homeowners are always better off after the 25-year period is over.

"A number of factors have come together to cause rent over 25 years and a mortgage for the same period to converge across the UK. But while on a month-to-month basis in some areas it is cheaper to rent rather than buy, at the end of the 25 years a homeowner actually has a house whereas a renter has nothing," said Nici Audhlam-Gardiner from the firm.

"In addition, homeowners benefit from any further house price rises as the value of their equity increases over time," she continued.

The index revealed regional variations, with people in Northern Ireland, Wales and the north-west generally better off renting at present.

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