An average homeowner is £352,500 better off than someone renting over the course of 30 years, new figures show.
Research form the Intermediary Mortgage Lenders Association (IMLA) shows homeowners pay £133,700 less for their mortgage than renters do to their landlords and get an extra £218,000 on top in the value of the home itself once their debt is cleared.
IMLA executive director Kate Davies said: "The long-term benefits of being a homeowner are not just confined to the property value and the potential for house prices to increase – homeowners also potentially save hundreds of thousands of pounds compared to their private renter counterparts."
The IMLA’s report found private renters can expect to pay out £451,600 over the next 30 years
But people stuck renting for life could pay far more.
Separate research from www.thomas-sanderson.co.uk showed that the average renter would pay £636,633 to their landlords over 50 years - three times the current average house price of £216,096 according to Nationwide.
By contrast, a homeowner on a 25-year repayment mortgage would pay £317,900 if interest rates remain at current levels - then nothing more.
For renting to be cheaper, mortgage rates would need to soar to 11.5% or higher and stay there for the entire life of a loan.
Richard Petrie, from Thomas Sanderson, said: “People often assume that renting is somewhat cheaper than buying a house, and in some cases this is true, however, when you look at the average cost over 50 years, it’s clear to see that renting really is ‘throwing money away’ as it almost always results in being more expensive."
The problem is that mortgage rules mean that - even though renting is more expensive than a mortgage - many people don't qualify for a large enough loan to buy a home for themselves.
“Despite the financial benefits of buying a house, there has been a marked decline in homeownership amongst younger people," Davies said.
"This is not only due to the rise in house prices relative to income. Reduced mortgage availability after the financial crisis, and the need for buyers to find higher deposits, caused a sharp fall in the number of first-time buyers.
"People who have been renting privately and comfortably making their monthly payments are struggling to obtain a mortgage with the same or even lower monthly payments, while the near-disappearance of interest-only as a route to managing affordability has cut the number of options for first-time buyers.”
In repsonse, IMLA has called on the Government to commission a new analysis to find out if the current mortgage rules are making things worse for renters by stopping them becoming first-time buyers.
