Renting a home rather than taking out a mortgage is more expensive over the long term, it has been claimed.
People who take out a mortgage to buy a home save money in the long-term, Abbey has found.
The financial services firm estimates in a new report that, over a typical 25-year term, home loans holders pay out £10,500 less in property costs than they would if they had rented over that period. Abbey also said that this disparity had increased by almost £5,000 over recent months, signifying that housing is becoming more affordable in the UK.
This is because property prices have begun to fall in the wake of the credit crunch: most recent statistics from Britain's largest lender, Halifax, puts this decline at a rate of 2.5 per cent for the past month. According to the Abbey study, this trend is so strong that it has overridden currently tightening lending criteria - which has been recently imposed by mortgage firms due to the financial crisis - in improving housing affordability.
Commenting on the research, Phil Cliff at Abbey Mortgages said: "The housing market has changed. Despite increased mortgage rates, falling house prices as well as increased rent in comparative terms mean that a person is better off, in terms of the payment cost, by getting on the property ladder in all but three of the UK's regions."
