| Owning a home can create significant long-term savings when compared with renting | Renters in London and Bristol are missing out the most on savings opportunities | Despite challenges, many younger renters are optimistic about owning their first home |
New research1 has found that buying a property can deliver significant long-term savings opportunities compared to renting.
The report showed that, while the upfront costs of buying a property can feel steep, homeowners will soon notice the benefits. By the second year, buyers could already be saving an average of £99 in comparison to renters. The difference becomes even more significant in the long run; after a decade, the gap in wealth creation could reach £12,157 and after 30 years, potential savings can rise to £206,031.
Those who choose to invest their savings could see even greater returns. The gap in wealth creation varies depending on the region. Renters in London could miss out on as much as £540,687 over a 30-year period of ownership, while the figure is even higher in Bristol, at £573,110.
Challenges faced by first-time buyers (FTBs)
Despite the investment opportunities that homeowning can offer, many renters think buying isn’t achievable. Two-thirds (65%) aspire to own a home and 64% acknowledge that it offers better long-term financial security. Yet more than a quarter (27%) do not believe homeownership is within their reach, while just 8% said they actively prefer the flexibility of renting. High property prices continue to be the main obstacle, cited by 61% of renters. Saving for a deposit remains another hurdle (56%), with 32% pointing to income instability as a barrier.
Younger generations are optimistic
Younger renters appear more hopeful; only 11% of 25 to 34-year-olds consider ownership unattainable, and this proportion drops to just 7% among 18 to 24-year-olds. More than half (56%) of tenants say they would buy if monthly mortgage payments were the same price as their rent. In some UK regions, this is becoming increasingly feasible, so FTB confidence may grow in the years ahead.
1MAB, 2025
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for guidance only. Some rules may vary in different parts of the UK.