New research has shown that young people will have to pay far more for being priced out of the housing market.
A report, published by Barclays, finds that a lifetime of renting, will cost a young couple an extra £200,000 compared to buying a property. The calculations show that for those who buy a property worth about £160,000, the national average, the cost of buying the property, paying the mortgage and maintaining the home will total £429,000 over 50 years whereas, over the same period of time, tenants will have to pay £623,000 in rent.
Andy Gray, head of mortgages at Barclays, said that, while the cost of getting onto the property ladder can act as a deterrent, the long term benefits show that it is worth it in the long run. Owner occupiers save money and have an asset once the mortgage is paid off, providing security in old age, while those renting will have to use money from their pension income to pay their rent.
The chances that young couples have of getting onto the property ladder appear to be receding according to a separate survey, from the Joseph Rowntree Foundation, which forecast that the number of owner occupiers below the age of 30 will fall from the current position of 2.4m to 1.3m by 2020 with more people than ever having to resort to renting. The cost of a house coming to market has risen to £246,235, which is 13% down in real terms since the beginning of the financial crisis. However, any advantage has been offset by wage freezes, the higher cost of living and stricter mortgage borrowing criteria.
https://www.theguardian.com/money/2012/jun/18/home-ownership-cheaper-renti...