Property ladder gets steeper

Jun 13 2006 By Helen Logan Evening Gazette

Some figures released this week must have proved worrying reading for people squeezed out of the property-owning classes.

For according to new research, people who opt to buy their own home rather than rent can save an average of £25,000 over 25 years.

High street bank Abbey's study says the cost of buying and maintaining a property over 25 years adds up to £379,341, while renting for the same period costs around £403,713.

Often the first step on the property ladder - whether renting or buying - is a flat and the news here is even worse.

According to the report, the difference between buying and renting across the UK is greatest for a two-bed flat, which costs around £60,000 or 19pc less to buy and maintain than to rent.

There are some advantages when it comes to leasing a home.

For people wanting to live in a four-bed detached home would actually save £36,523 or 7pc by renting the property rather than buying it.

But this is cold comfort for first-time buyers as it is unlikely they would be able to move into this size of property unless they decided to pool their resources with other friends or family.

Sue Hayes, director of Abbey's product marketing, said: "First-time buyers might find it difficult to get on the property ladder, but they are better off in the market than out."

I am sure most people who are renting already knew that it is not cost-effective - in most cases when compared to buying.

Young people I know feel that renting is just "throwing money down the drain." and they would dearly love to be able to afford to buy their own home.

But this is a distant dream as they have come out of university owing thousands in students loans in spite of having taken part-time jobs while they studied.

On top of that, the amount they need to save for a 5pc deposit gets bigger as house prices increase.

No wonder the average age of a first-time buyer is now around the mid-30s mark.

My first house - a three bedroom terrace - cost £18,500 in 1987. I got £36,000 for it in 1999. It sold again a few months ago for £85,000 - but wages have not kept up at the same rate to plug the affordability gap.