As home buying hopefuls are kept off the property ladder by tight lending criteria and high level deposits the news comes that staying in a lifetime rental situation will cost them dearly.  It has been determined by Barclays researchers that it is cheaper to own a home than to face a lifetime of renting.  Home ownership the research determined is £200,000 cheaper.  The research points out that this cost difference is a conservative estimate that does not consider high inflation or resale value.

The research shows that if a household purchased a home valued at £160,000 and paid the average mortgage costs and maintenance costs then it would have an overall cost total of £429,000 for 50 years.  A rental household would pay £623,000 in rental fees over that same time period. 

Andy Gray, head of mortgages at Barclays, said, “The cost of stepping on or moving up the housing ladder can be a big barrier for many, but the long-term benefits hugely exceed the initial expense. Not only will you save money by becoming an owner-occupier, but you will also own a substantial asset once your mortgage is paid off, providing financial security for your old age.”

Another research study conducted by the Joseph Rowntree Foundation showed that there are fewer home owners expected in the future under the age of 30 with the number falling from 2.4 million to 1.3 million by 2020. Many hopeful homeowners are expected to be kept off the property ladder for a lifetime.  Those without the source of equity to help fund their retirement expenses in the future will find it more difficult to remove themselves from the workforce and enjoy their retirement years.