Owning your own home is cheaper than renting, by an average of £200,000, according to a new study by Barclays. It shows that over 50 years the typical cost of purchasing, maintaining and making mortgage payments on a home amounts to £429,000 compared with £623,000 in rent.
Chris Endsor, Chief Executive of Miller Homes, said: “This research supports the genuine message we have been giving prospective purchasers – buying your own home is still a very viable proposition and, when compared with the cost of renting, makes solid financial sense too.”
The research showed that whilst renting was initially cheaper, over time home owners soon began to reap the benefits of being an owner occupier, including long term financial security.
Chris added: “Taking the first step onto the property ladder can often seem like a huge financial commitment and the need for large deposits has had a detrimental effect in recent years. Miller Homes is committed to helping buyers with a range of purchase incentives and the recent launch of NewBuy across our developments in England has seen a return to mortgages where a smaller deposit is required.”
NewBuy has been designed to help overcome the large deposit gap for many potential homebuyers by enabling them to purchase a new build property with only a small deposit of 5-10 per cent. Lenders participating in the scheme will then provide a 90-95 per cent loan to value mortgage for those who meet their qualifying criteria.
Although location is a key factor in the purchase of a home, the age and style of a property will have a financial impact too. Energy bills are on the rise whether you are a tenant or property owner and half the heat lost in a typical home is through walls and the roof. More than 80 per cent of home energy used is for heating and hot water.
However, new homes are built to the latest environmental standards and are six times more energy efficient than older-style properties, making them an attractive option for home ownership. In addition to impacting on day to day running costs, owning a newly-built property can also provide purchasers with peace of mind in relation to the financial sustainability of their investment.
“New homes are typically very efficient with the latest low energy, high output heating systems, windows and insulation fitted to ensure they remain efficient and cost effective,” said Chris. “This delivers further cost saving benefits for home owners as they can maximise their investment whilst reaping the rewards on a monthly basis.”