'Save thousands' by buying, not renting

London: "Savings average at £113,244 over 25 years"

People could save thousands of pounds by buying their own home rather than living in rented accommodation, a bank has said.

Abbey National estimates that on average, over a 25-year period, it is £101,679 or 30% cheaper to buy a property in the UK than to rent one.

But the group said the saving had fallen since 2001, when it cost 57% less to buy than rent.

This was put down to steep increases in property prices, and a large number of buy-to-let properties leading to slightly reduced rents.

Average buy/rent savings

Two-bed flat £121,815

Three-bed terrace £86,003

Four-bed detached £96,074

Source: Abbey National

According to Abbey National, the average rent on a two-bedroom flat in the UK is £528 a month.

Over 25 years and allowing for inflation of 4%, this would cost a total of £263,785.

But to buy the same property, which has an average price of £73,583, would cost £426 a month in mortgage repayments with interest charged at 6% and a 10% deposit.

Once maintenance costs have been factored in, buying the property would have saved someone a total of £121,815 over 25 years.

They would also own the flat outright and have benefited from any increase in house prices.

Regional differences

Consumers could save £96,074 by buying rather than renting a four-bedroom detached house for the same period.

And they would be £86,003 better off if they had paid a mortgage on a three-bedroom terraced house instead of renting it.

The biggest savings could be made in the north-west, according to Abbey National, where someone could save themselves an average of £151,500 by buying a property, followed savings of more than £133,000 in east Scotland.

The lowest savings were in the south-west, where buying rather than renting would make someone £60,121 better off.

Despite property in London being more expensive than in any other region of the UK, a homeowner could save an average of £113,244 over 25 years by buying rather than renting in the capital.